senior macro strategist at Bloomberg Mike McGlonebelieves that a catalyst could drive the Bitcoin price down drastically.
CryptocurrencyMcGlone, who has released a new analysis of the economy, said if the Federal Reserve continues to raise interest rates to reduce inflation despite the risk of recession. bitcoin He thinks that it may create downward pressure on risky assets such as
“Fed continued tightening despite recession risk could be a primary hurdle for most risky assets, especially cryptos. Buy-and-hold investors can guarantee some protective insurance in case the bear market doesn’t end.”
Mike McGlone He also questions whether crypto and equities can drop to lower levels than they did in the bear markets of 2022.
“What if crypto and stocks haven’t hit their lows yet? Crypto and stock prices have bounced, which could leave them vulnerable to continuing their 2022 downward trajectory. The stock market can be one of the strongest forces in the world when it’s down, and the Fed’s tightening amid rising recession risks are solid headwinds.”
Critical Level for Bitcoin $25,000
Koinfinans.com As we reported, McGlone thinks $25,000 is a critical price level for Bitcoin and that March could quickly show whether the crypto will remain resilient despite the Fed tightening its monetary policy.
“Risk versus reward may be heading towards responsive, tactically oriented sellers, with BTC around $25,000 marking a crucial resistance. Cryptos need to show sustained strength amid concerns that 2022 risk asset lows may not be bottoms.
The fed funds rate was zero a year ago and is still rising, and markets seem to be underestimating the long and volatile delays of monetary policy, which seems reason enough to be defensive. Our trend is clear: risk assets need to prove their resilience in early March, with the federal funds rate at zero a year ago and approaching 5%.”
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