Mike McGlone: Bitcoin Still Isn't In A Great Place

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Bloomberg crypto strategist Mike McGlone doesn’t believe that the worst days of bitcoin are behind it, and he says the world’s number one digital currency by market cap is likely to run into trouble again like it did in 2022.

Mike McGlone on the Future of BTC

That year was arguably the worst on record for bitcoin, with the asset losing as much as 70 percent of its value. The currency rose to a new all-time high in November of 2021 ($68,000), though a year later, it was in the mid-$16K range.

In a recent report called “Still, Don’t Fight the Fed,” McGlone said bitcoin is likely to experience further dips in the coming months due to fears surrounding a recession in the U.S. His document explains:

June may show more of the first half of the year bias for rising risk assets and bitcoin in a worst-is-over scenario, or it could roll over into a US recession. Our bias is the latter, notably as markets appear to have priced in an optimistic outcome from the long and variable lags of aggressive central-bank rate hikes, which are still rising.

McGlone says the recent price bumps the world’s leading digital asset has experienced shouldn’t fool traders into thinking the gloom and doom is over. He is warning everyone that further headwinds are likely to arise, and that traders need to be prepared in the coming weeks. He said:

The potential for the rising Nasdaq 100 Stock Index to lift all boats may be ephemeral. The graphic of 100-week moving averages shows downtrends for the stock index and bitcoin. It’s a question of the worst being over or respecting the trend, notably as prices have bounced. Our downward perspective is guided by the lessons of liquidity pumps that reverse and are still dumping, as indicated by federal funds futures in one year (FF13). As a result, it may take a decline in equities for rates to fall.

Will Things Go Down Further?

In May, McGlone claimed that the stock market was likely to fall in ways nobody was anticipating. He also said there are several altcoins out there that are going to be experiencing major corrections soon. He stated:

My base case is going to 3,000. bitcoin is going to go down, [and] I don’t know how far. It might make a new low. Cryptos will go down hard. We’re going to purge some of these 24,000 cryptos. Get rid of some. They’re just silly… Bitcoin’s high of about $30,000 in 2023 vs. the 100-week mean around $33,000 may show the pre-eminent, 24/7, globally traded risk indicator feeling gravity from the comfort zone around $7,000 before the unprecedented 2020-21 liquidity boost. That the widely expected US recession has not yet started may pressure risk assets accordingly.