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 of further declines, McGlone also did not ignore the potential of a trending BTC to reach $30,000. However, he notes that continued rate hikes 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 hit the steepest dip relative to the 100-week moving average because it was calculable and recovered close to that level in July. It’s not so cold anymore, and since this momentum metric points 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 to $10,000, which served as the main pivot between 2017-20, until the largest liquidity pump in history. The fact that most central banks are still on track to raise rates in Q3 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. On this issue, he wrote, “The fact that Bitcoin has lost about 15% by the end of the third quarter tells us something important, as spot ETFs in the US are nearing the approval process and are being traded on a live exchange.” cryptocoin.comYou can take a look at McGlone’s previous analyses, which we reported as, on this page.
Bitcoin spot volumes are at 4-year lows
With the bitcoin price stable in August, the spot market’s trading volume 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.
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In August, the combined spot & derivatives trading volume on centralised exchanges fell 11.5% to $2.09tn, recording the lowest combined monthly trading volumes this year.
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— CCData (@CCData_io) September 7, 2023
CCData notes that Grayscale’s court victory over the SEC at the end of August was not reflected in trading volumes on centralized exchanges. Spot trading volume on central Bitcoin exchanges fell 7.78% to $475 billion. Thus, it reached the lowest level since March 2019. Finally, the derivatives market is exhibiting a similar decline. Derivatives trading volume declined by more than 12% to $1.62 trillion. Thus, it reached the second lowest level since 2021.
