Senior Bloomberg strategist Mike McGlone said in his latest analysis that the Bitcoin price could fall as low as $10,000. The experienced analyst finds the relationship of the BTC price with the 100-week moving average worrying.
Mike McGlone predicts Bitcoin price will return to 2017-20 levels
According to McGlone, it will be very important for Bitcoin to take permanent momentum measures to prove its strength. In November 2022, Bitcoin experienced a significant decline compared to the 100-week moving average. It achieved a recovery close to this level in July. It is not currently trading far from these levels. Bloomberg strategist puts forward two different scenarios at this point.
Warning about further declines, McGlone did not ignore the potential for a trend-following BTC to reach $30,000. However, he states that ongoing interest rate increases strengthen the possibility of $ 10,000. Bitcoin is currently moving sideways to the $25,500 region.
No Longer Too Cold, #Bitcoin May Resume Reversion – Some enduring Bitcoin momentum measures have rolled over, which may make it necessary for the crypto to prove strength. In November, Bitcoin reached the steepest discount vs. its 100-week moving average since it could be… pic.twitter.com/rLEHEbQ3BM
— Mike McGlone (@mikemcglone11) September 7, 2023
In his technical analysis, he explains the bull and bear scenarios for Bitcoin as follows:
Some permanent Bitcoin momentum measures have been rolled over, which may require the cryptocurrency to prove its strength. In November, Bitcoin reached its steepest decline relative to the 100-week moving average because it could be calculated, and recovered to near that level in July. It’s not too cold anymore, and since this momentum metric is pointing down, our bias is to respect the trend until proven otherwise. Sustaining the 100-week average just above $30,000 could indicate the strength of the recovery.
Otherwise, it seems more likely that Bitcoin will continue its return towards $10,000, which served as the main pivot between 2017-20, until the biggest liquidity pump in history. The fact that most central banks are still on track to raise interest rates in the 3rd quarter may be reason enough to expect headwinds in Bitcoin.
Interest rate increases are critical
Previously, McGlone said that it was natural for the Bitcoin price to retreat after interest rates increased. “The fact that Bitcoin has lost nearly 15% of its value by the end of the third quarter, with U.S. spot ETFs nearing approval and trading on a live exchange, tells us something important,” he wrote. You can take a look at McGlone’s previous analysis, reported by Kriptokoin.com, on this page.
Bitcoin spot volumes are at 4-year lows
While the Bitcoin price remained stable in August, the transaction volume of the spot market fell to its lowest level in 4.5 years, according to CCData data. During this period, total crypto spot and derivative trading volume decreased by 11.5% to $2.09 trillion.
https://twitter.com/CCData_io/status/1699792847535481202
CCData states that Grayscale’s court victory against the SEC at the end of August was not reflected in trading volumes on centralized exchanges. Spot trading volume on centralized Bitcoin exchanges fell by 7.78% to $475 billion. Thus, it reached the lowest level since March 2019. Finally, the derivatives market is experiencing a similar decline. Derivative trading volume decreased by over 12% to $1.62 trillion. Thus, it reached the second lowest level since 2021.
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