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Bitcoin to $7,000? Bloomberg's Top Expert Reveals Surprising BTC Analysis

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Mon, 22/05/2023 - 16:10
Bitcoin to $7,000? Bloomberg's Top Expert Reveals Surprising BTC Analysis
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Bitcoin, the benchmark cryptocurrency, is facing potential reversion risks as it struggles to maintain its upward trajectory. Senior macro strategist at Bloomberg Intelligence Mike McGlone recently highlighted the downward trajectory of Bitcoin, emphasizing the risks associated with its current price level.

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At the end of 2019, Bitcoin was valued at approximately $7,000 but experienced a significant liquidity pump, resulting in a surge in value. This historical event, according to McGlone, indicates the potential for a reversion to the mean. With Bitcoin hovering around $27,000 on May 19, there are concerns that the cryptocurrency may face a downward correction.

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BTC to USD by TradingView

The 52-week moving average of BTC showcases a downward trend compared to the upward surge witnessed during the onset of the 2020, says McGlone. Despite bouncing back from a low point in 2022, when it reached around $15,000, Bitcoin's value soared to around $30,000 in April 2023, potentially indicating an overbought market.

The patterns of Bitcoin's booms and busts, largely influenced by liquidity injections or removal, play a significant role in shaping market sentiment. McGlone suggests that respecting the down-sloping 52-week mean is crucial when considering the future direction of Bitcoin.

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Interestingly, despite a bank run, the Federal Reserve has tightened its policies twice. This tenacity by the central bank might signal potential deflationary pressures on risk assets, believes the expert. McGlone notes that both the slumping copper market and cryptocurrencies, with Bitcoin as the leading example, seem to be paying heed to these warnings, contrasting with the resilience displayed by the stock market.

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