Mike McGlone, Bloomberg’s senior commodity strategist, is convinced the crypto market is presently experiencing its first major recession, an indication that there’s still a long way before the cryptos recover to previous levels.

Indeed, if history is anything to go by, the current crypto recession will likely end in huge milestones, McGlone notes. 

Bitcoin To Drop More

Bitcoin starts the second week of February in the red as the spectacular gains of last month slip away. In what may bring vindication to analysts forecasting a significant BTC price drawdown, the flagship cryptocurrency has recoiled below the $23,000 level and is making lower lows on hourly timeframes.

According to Bloomberg’s Mike McGlone, the crypto market has been hit by its first real recession, which is characterized by lower prices and high volatility.  

McGlone, who won plaudits in the cryptosphere last year for being one of the first prominent Wall Street strategists to accurately predict bitcoin’s ascent to $50,000, observed in a Feb. 5 tweet how the previous global economic recession, the financial crisis in the 2002 and 2008-2009 fiscal year, led to the birth of bitcoin. He thinks the current recession will possibly lead to the emergence of a similar key milestone. However, there’s also the possibility of a more substantial retracement in the crypto market before a steady uptrend resumes.

One caveat is how difficult it can be to prognosticate the future trajectory of the blockchain sector — not to mention crypto prices.

It’s worth mentioning that McGlone, in mid-2021, was predicting a bullish bitcoin market with a price target of $100,000. Remarkably, he reiterated that confidence later in December.

But bitcoin is currently trading at around $22,990, well off the all-time high price near $69,000 reached in November 2021.

Traders Are Cautious About BTC

Bitcoin is showing weak signs of upside price movement after the weekly close still failed to surpass the previous one, marking a rejection at a key resistance level from mid-2022.

Many traders in the cryptocurrency market are currently observing the price trend of BTC and are definitely convinced a comedown is imminent.

“A break below 22500 is the bearish confirmation. Current bear market rally has created the perfect environment for people to keep buying all the dips when the current trend reverses,” trader il Capo of Crypto said in a tweet published yesterday. “Perfect scenario for a capitulation event in the next few weeks,”

Another trader going by the name TraderNJ on Twitter said he believes “it’s possible that we slowly bleed out, dips keep getting bought, and it just keeps dipping. Looks heavy up here.”

And what does this mean for crypto prices going forward? Most investors are currently looking ahead to Federal Reserve Chairman Jerome Powell’s utterances on Tuesday afternoon before making any major moves.

---

Filed under: Bitcoin - @ February 7, 2023 5:07 pm