According to analysts at Bloomberg, Bitcoin could quickly bottom out. The latter thinks that BTC would be ready for a new bullish push. So what about it?
Optimistic analysis!
Mike McGlone is an analyst, key commodity strategies by Bloomberg Intelligence. Bloomberg Intelligence is a service for professionals. It provides iadvanced information and data to better understand the markets. For him, the crypto market could collapse finally coming to an end. To support this thesis, he advances several factors. This is what he says:
Bitcoin shows the biggest discount on September 20, since its 200-week moving average could be calculated, at the bottom of this crash in crypto markets.
For him, the recent announcements from the FED are also to be taken into account. As a reminder, the latter follows the rise in its prime interest rates in an effort to curb galloping inflation in the United States. Indeed, the price increase of more than 8% in Uncle Sam’s country.
According to Mc Glone, these increases in interest rates”give a good reason for Bitcoin to resume its march forward:
Our chart shows us the potential for one of the best performing assets in history – aggressive rate hikes by the Federal Reserve – but the question of an end date for that drop remains. At about 4.3%, Federal Treasuries Futures (FF13) have never fallen faster than Bitcoin’s 200-week moving average.
The Federal Treasuries Future is a derivative product based on short-term interest rates set by the FED. It is used by traders and investors to bet or hedge against the fluctuations in short-term interest rates.
Another key contextual feature is the still very strong correlation between the the stock market and cryptos. The latter was seen during the last increase in interest rates by the FED. When the analyst is asked about this correlation, he replies:
Bitcoin is gaining status as a leading risk asset and leading indicator, which is otherwise continuously trading. This is a year in which investors have a poor perception of risk. The crypto could be a valuable clue as to the lowest level the stock market could reach.
So, his reasoning is reversed. He thinks that the bottom of Bitcoin will find the head in the traditional markets. Case to follow!
Bitcoin back at the bottom of its range
While writing these lines, Bitcoin is trading at $19,0030. It is down 4.25% in the last 7 days. He finds himself again at the bottom of a ranging from $18,500 to $21,500. If he resigned in August, this relief will be short-lived.
Bitcoin performance in the last 3 months (source: coinmarketcap.com)
While McGlone’s prediction may be hopeful, the the reality is not so positive at the moment. Many observers are expecting another fall in equity markets, which will drag Bitcoin and crypto assets down with it.
Different observers believe that the American indexes they are just at the beginning of their fall. The poor macroeconomic conditions, the tension on energy prices or even the Russian invasion of Ukraine are fueling the thesis of a longer than expected recession.
Recently, the emergence of comparisons between the performance of the S&P 500 in 2008 and that in 2022. If past performances do not predict future performances, we can see great similarities between these two predictions.
Here is the update #sp500 analog comparing 2008 to 2022, now closely related. pic.twitter.com/0QofHROpFA
— Michael J. Kramer (@MichaelMOTTCM) September 21, 2022
This is the month of September, as expected red for bitcoin. For the past 9 years, the Bitcoin went down in 80% of cases during the month of September. On average, this drop was 10%. Traditionally, October is a positive month since the asset often marks a payback with gains between 10 and 60%. However, the greatest care is needed in the current context…
To learn more about Singapore, the country that loves cryptos, find our article here.
