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Bitcoin (BTC) recorded a gain of over 12% in the last seven days as the flagship cryptocurrency regained $90,000. However, Bloomberg's senior commodity strategist, Mike McGlone, has expressed skepticism about this rebound move, predicting a further bloodbath for BTC.
Bitcoin’s correlation with S&P 500 hints at price slips
In a post on X, McGlone argued that Bitcoin might fall back toward $50,000 in a "typical reversion."
According to patterns that he has been tracking, the flagship coin has a tendency to reverse its gains to the $50,000 level, a 45% drop from current levels. He believes that before a sustained rebound could be seen with BTC, it will reverse toward this zone again.
McGlone linked his prediction to deflationary signals and low volatility in the financial stock market, particularly the S&P 500. According to his analysis, Bitcoin’s price tends to mirror the S&P 500.
He stated that when the S&P 500 is calm or on a decline, BTC often becomes calmer or weaker in price outlook as well.
The commodity strategist highlighted that the S&P 500’s 120-day volatility is currently at 11.3%. He noted that this is very low when compared with recent years, and this low volatility is indicative of market complacency and a possible cool-down.
So, if McGlone is right, risk assets like Bitcoin stand a risk of dropping further in value. He argued that falling commodity prices, declining risk appetite and tightening economic conditions suggest a deflationary trend. In this scenario, Bitcoin could get caught by the effect and see a plunge to around $50,000.
McGlone’s opinion is not an isolated one. Interestingly, a recent poll by Polymarket reveals that 74% of traders on the platform do not expect Bitcoin to rebound to $100,000 soon. These investors remain pessimistic despite the short-term rise of the asset.
Can Bitcoin prove bears wrong?
The negative view held in some quarters of the Bitcoin community could have been triggered by the disappointing performance of the coin. As of Thanksgiving 2024, Bitcoin exchanged hands at $95,737 after experiencing a good rally earlier that month.
However, the asset has failed to replicate the feat this year, contrary to investors’ expectations.
In the last 24 hours, Bitcoin climbed from a low of $90,604.51 to an intraday peak of $92,969.09. As of press time, Bitcoin has slipped slightly and is trading at $92,686.04, which represents a 2.06% increase.
The negative perception is, however, reflected in the trading volume, which is down by 24.98% to $53.91 billion. The coming days will determine if Bitcoin can prove this prediction wrong or not.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team