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Bloomberg’s Mike McGlone warns of a potential 60% price decline for Bitcoin, citing negative liquidity and global rate increases amid recession signals.

According to Mike McGlone, senior macro strategist at Bloomberg Intelligence, Bitcoin (BTC) may be about to see a 60% price decline.

Bitcoin

According to McGlone, the primary indication for Bitcoin is the persistence of negative liquidity and the rise in global rates “despite recession signals.” The expert is still of the opinion that a recession will hit the US by the end of 2023. He states that the $30,000 mark is Bitcoin’s critical obstacle and that the leading cryptocurrency has “risks tilted towards $10,000.”

According to McGlone, pressure from a stock market collapse associated with a recession would pose the greatest risk to the cryptocurrency industry as a whole.

“Crypto weakening in the third quarter might indicate a recession leaning or a glitch in the rebound. Given that nearly all risk assets gained in 2023 and carried over into the quarter, we lean towards the latter. Despite signals of contraction in the US and Europe as well as China’s property crisis, most central banks are continuing to tighten, which might have deflationary effects.

The relative underperformance of the Bloomberg Galaxy Crypto Index (BGCI) could be explained by factual shifts for an asset class that was raised on zero interest rates. Crude peaked in July 2008, but US Treasury yields peaked the week before the crash in 1987. Parallels are evident. Federal Reserve pivots have coincided with bitcoin downturns, which may highlight the characteristics of the cryptocurrency as a leading indicator and what may be required to restore liquidity.

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