Bitcoin’s Future: A Professional Perspective

Cryptonews John Brightwater August 18, 2024

Bitcoin’s Future: A Professional Perspective

In a recent analysis conducted by Mike McGlone, a senior commodity strategist at Bloomberg, a cautionary warning has been issued regarding the potential future trajectory of Bitcoin. According to McGlone, the lackluster performance of the leading cryptocurrency since March may indicate a broader trend of risk asset reversion.

Furthermore, the underperformance of Bitcoin has followed similar trends in both the stock market and the commodities sector. This confluence of lackluster performance across various asset classes has prompted McGlone to cast doubt on the sustained bullish momentum of Bitcoin.

Adding to the air of skepticism, earlier this year, McGlone had predicted that gold could surpass Bitcoin in performance due to macroeconomic factors. Despite this forecast appearing to misalign with reality, gold recently achieved a new all-time high, further casting a shadow on Bitcoin’s lackluster performance.

Moreover, Bitcoin’s recent struggle to recover from a significant price plunge has raised concerns regarding its future trajectory. McGlone also highlighted the enduring effects of the so-called “Bitcoin hangover,” which he attributes to various factors such as the unique combination of U.S. ETF launches and a supply cut in the first quarter that led to the cryptocurrency’s record highs.

The recent reclamation of the $60,000 level by Bitcoin may provide a glimmer of hope, but it is important to note that it still falls short of reaching its previous record high achieved in March. McGlone expressed that Bitcoin, born out of the financial crisis and quantitative easing, has exerted a significant influence on this year’s highs for most risk assets and may continue to do so as they potentially revert back down.

A key technical indicator, the upward-sloping 200-day moving average, was previously highlighted by McGlone as being breached by Bitcoin. This breach implies that risk assets, including Bitcoin, might be on the cusp of a downward shift.

At the time of writing, Bitcoin is trading at $59,611 on the Bitstamp exchange, with the upcoming rate cut by the Fed expected to inject bullish optimism. However, it remains uncertain whether this action will be sufficient to sway market sentiment back in favor of the bulls. In light of current market sentiment, traders are speculating that the Fed will proceed with a rate cut that is smaller than initially anticipated.

In conclusion, McGlone’s sober analysis of Bitcoin’s performance and its potential implications for risk assets offers a balanced perspective amid the current market turbulence. It is crucial for investors and market participants to remain cautiously observant of these developments in order to make informed decisions in the ever-evolving landscape of digital assets and financial markets.