Bloomberg analyst warns of potential Bitcoin (BTC) crash to $10,000 as negative liquidity and rising interest rates threaten price.
Over the past 24 hours, Bitcoin has fallen back into its passive trading zone of $27,000 after briefly breaking a two-month high above $28,400. Given the unsavory price trend, a top Bloomberg Intelligence analyst argued that Bitcoin could fall to as low as $10,000 before the end of the year.
In particular, Mike McGlone, Senior Macro Strategist at Bloomberg Intelligence, expressed this sentiment and provided insights into Bitcoin’s current state as the market enters the fourth quarter of the year.
According to McGlone, “The end result for Bitcoin entering Q4 could be that liquidity remains negative, with an impact on price.”
Bitcoin’s decline preceded the #Fed pivots –
The end result for #Bitcoin as we enter Q4 could be that liquidity remains negative, impacting price. As #cryptocurrency comes of age in a zero interest rate world, the #cryptohangover could continue as global interest rates continue to rise,… pic.twitter.com/Nrn8lMaYzo
— Mike McGlone (@mikemcglone11) October 3, 2023
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Bitcoin liquidity is negative
Notably, the negative Bitcoin liquidity indicator suggests that there are more Bitcoin sellers than buyers. The Bloomberg analyst believes that the situation poses a significant threat to the current Bitcoin price.
Additionally, McGlone noted that Bitcoin gained widespread adoption at a time when interest rates were low. As a result, he argued that the crypto market could face a permanent hangover as global interest rates rise. He pointed to the possibility, despite signs of an impending recession.
Additionally, the chart accompanying McGlone’s tweet was intended to illustrate the historical pattern of Fed fund futures prior to liquidity reversals. According to the chart, Bitcoin may need to see a decline to align with Fed Fund futures.
Meanwhile, McGlone emphasized that the US Federal Reserve may not be directly involved in Bitcoin. However, he mentioned that Bitcoin’s status as a 24/7 traded asset and leading indicator could become more important in the financial world.
Bitcoin falls to $10,000
Additionally, the analyst noted that Bitcoin has seen significant gains in 2023 along with other risky assets.
Still, he warned that it could be a “short-covering rally.” Ultimately, McGlone explained that the $30,000 level remains a key resistance point for Bitcoin and is at risk of a possible decline to $10,000.
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Disclaimer: This content is for informational purposes and should not be considered financial advice. The views expressed in this article may contain the personal opinion of the author and do not reflect the opinion of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic assumes no liability for any financial losses.
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