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In his latest report titled “Crypto Outlook, June 2023,” senior macro strategist at Bloomberg Intelligence Mike McGlone suggests that the worst may not be over for Bitcoin. McGlone argues that based on current trends, various causes and the Federal Reserve’s bias, the outlook for BTC appears bearish.
According to McGlone, the month of June may reveal whether the first half’s bias for rising risk assets, including Bitcoin, will continue, or if it will lead to a U.S. recession. The strategist leans toward the latter scenario, citing the market’s optimistic outlook resulting from aggressive central bank rate hikes, which are ongoing.
Highlighting the arguments for further price decline on BTC, the strategist points out that the cryptocurrency traded around $7,000 at the end of 2019 before experiencing a significant liquidity pump, which raises concerns about potential reversion risks. As of June 1, Bitcoin’s value stands at approximately $27,000, highlighting the downward trajectory of its 52-week moving average compared to the initial upward trend observed at the onset of the pandemic.
The expert suggests that the main cryptocurrency’s recent price fluctuations, with a low of around $15,000 in 2022 and a high of about $30,000 in April, align with historical patterns of booms and busts driven by liquidity.
Moreover, McGlone expresses doubt about the ability of Bitcoin to withstand a contraction of the U.S. economy, as the cryptocurrency is relatively young and considered a high-risk asset. He believes that during an economic recession, risk assets, including crypto, tend to become more affordable.