Bloomberg Senior Macro Strategist Mike McGlone has warned that Bitcoin could be further down, despite BlackRock’s recent filing for a Bitcoin Exchange Traded Fund (ETF) boosting the price of BTC.
In the latest monthly report shared on Friday, McGlone highlighted the potential challenges bitcoin could face, including a possible bear market in stocks and the watchful eye of central banks.
He emphasized that the launch of a Bitcoin ETF in the US will not protect the cryptocurrency from the aforementioned risks. According to him, although the appearance of a physical bitcoin ETF in the United States is considered imminent, he warned that BlackRock’s application, which accelerated the process, may not lead to an actual launch in 2023.
“We believe physical US Bitcoin ETFs are only a matter of time. BlackRock’s filing to set up such a fund appears to have accelerated that process, but the launch may not happen until 2023.,” McGlone said, repeating moods to Eric Balchunas, senior ETF analyst at Bloomberg.
McGlone also predicted that the US economy could be headed for a recession in the coming months, further complicating the outlook for Bitcoin. Noting the relationship between risk asset performance, negative liquidity and economic contraction, the specialist suggested that Bitcoin is likely to gravitate towards the $20,000 support level rather than the $40,000 resistance level.
“Our chart shows that Bitcoin is lagging the recent gains of the Nasdaq 100 stock index, which may have peaked. One-year federal funds futures (FF13) show little potential for additional liquidity fuel,” he said.
McGlone’s analysis comes days after the Fed announced a pause in rate hikes, ending a streak of 10 consecutive hikes within a shortened 15-month period. The Federal Reserve responded to the decline in inflation by providing relief to investors. As a result, the markets experienced a significant upswing, causing Bitcoin to once again regain the $30,000 mark.
Nevertheless, despite the decision, Fed Chairman Jeremy Powell signaled that they may resume their aggressive anti-inflationary policies, saying, “Inflationary pressures remain high and the process of returning inflation to 2% has a long way to go.”
According to McGlone, despite the Fed’s decision to hold off on rate hikes, the “liquidity pull” is likely to continue, with most central banks continuing to tighten in June, creating more headwinds for risk assets. Despite McGlone’s warnings, some experts are convinced that the bottom has already been reached for Bitcoin and a bull market is on course.
Popular crypto analyst Ali Martinez suggested on Friday that the price is likely to push towards $35,000, citing the lack of significant barriers ahead.
“Bitcoin is set for a clean streak, with major supply barriers only emerging near the $35,000 mark! Conversely, he tweeted that critical support levels for BTC are in the $29,260-$30,200 and $26,500-$27,400 range,” he tweeted.
Bitcoin is trading at $30,385 at press time, down 2.74% in the last 24 hours. In the last week, the top cryptocurrency rose by an impressive 15.23%