In the cryptocurrency world, Bloomberg analyst Mike McGlone raises cautionary flags about the future of Bitcoin, warning that the cryptocurrency may be facing a significant “800-pound gorilla” downside risk. He highlights a significant downside risk that the cryptocurrency is currently facing.
McGlone’s Warning Regarding Bitcoin and Rising Interest Rates
In a recent interview on macroeconomic trends, senior macro strategist Mike McGlone from Bloomberg Intelligence expressed his concerns about the current state of Bitcoin.
McGlone highlighted that Bitcoin’s low-interest rates had given rise to a new era characterized by increasing interest rates—a factor that could significantly impact its future trajectory.
McGlone even suggests that Bitcoin is currently experiencing a “reversion” process, which is influenced by the Federal Reserve’s tightening of monetary policy. This shift holds potential consequences for the value of Bitcoin.
When interest rates rise, it can have consequences in various assets. For instance, riskier investments like Bitcoin may experience a decline in value. This happens because investors seek safer alternatives with more attractive returns, such as government bonds. According to McGlone’s analysis, this could potentially result in Bitcoin losing over 5% of its current value.
Moreover, McGlone draws a comparison between Bitcoin’s trajectory and that of traditional assets. He specifically highlights the excessive price surge that Bitcoin has recently experienced. Additionally, he points out the resemblance to Amazon’s stock and other high-risk assets, suggesting a potential shift in Bitcoin’s future behavior.
Analyst McGlone Reveals Bitcoin’s Possible Price Trajectory
Mike McGlone expressed his concerns regarding the downside risk of Bitcoin. Additionally, he outlined potential price targets for the cryptocurrency in the upcoming months.
McGlone suggested that breaking below the $25,250 support level in Bitcoin may trigger a deeper bearish trend. This could potentially push the price down to $24,170 or lower.
McGlone pointed out the potential upside of a sustained break above the $31,000 resistance level. Such a breakthrough could pave the way for an optimistic trend, possibly pushing the value to new all-time highs beyond $35,000 throughout the year.
