According to Mike McGlone, the key resistance point for the first cryptocurrency is $25 000

​Bloomberg analyst allows the possibility of a further decline in the bitcoin rate

03.03.2023 - 12:45

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2 min

Bloomberg Intelligence senior macro strategist Mike McGlone says one catalyst could drive Bitcoin (BTC) to the downside.

In a new crypto analysis, McGlone says if the Federal Reserve continues to raise interest rates to lower inflation despite the risk of a recession it could put downward pressure on risk assets like Bitcoin.

“Fed tightening despite the risk of recession could be a primary headwind for most risk assets, notably cryptos. Buy-and-hold investors may warrant some protective insurance for the potential that the bear market isn’t over.”

McGlone also questions whether crypto and equities could dip lower than they have during the bear markets of 2022.

“What If Crypto, Equity Haven’t Yet Seen Their Lows? Crypto and equity prices have bounced, which may leave them vulnerable to resuming 2022 downward trajectories. The stock market can be one of the world’s most powerful forces when it declines, and Fed tightening amid elevated recession risks are solid headwinds.”

McGlone says $25,000 is a key price level for Bitcoin and March may quickly indicate whether crypto will remain resilient despite the Fed’s tightening monetary policy.

“Risk vs. reward could be tilting toward responsive, tactically focused sellers, with around $25,000 in Bitcoin marking pivotal resistance. Cryptos needs to show sustainable strength amid concern that the 2022 risk-asset lows might not be bottoms.

The federal funds rate a year ago was zero and is still rising, and markets appear to be underestimating the long and variable lags of monetary policy, which seems ample reason to be defensive. Our inclination is straightforward: Risk assets need to prove resilience at the start of March, as the federal funds rate was zero a year ago and is approaching 5%.”

Bitcoin is trading for $23,408 at time of writing.

This material is taken from the website https://dailyhodl.com.

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