Mike McGlone, senior macro strategist at Bloomberg, outlined the primary catalyst for the downturn in Bitcoin and crypto prices. Van De Poppe, an analyst focused on crypto, predicts the drop could reach FTX bottoms.
Mike McGlone explains crypto market bearish catalysts
Analyst’s accurate predictions cryptocoin.com You can take a look at this article. In his current analysis, McGlone cited the Fed’s hawkish disinflation strategy as the primary factor that could exert downward pressure on risky assets like cryptocurrencies.
While the analyst states that the crypto bear market is far from over, he advises hodl investors to look for protective insurance against devaluation. He also said that the recent return of cryptocurrencies makes them susceptible to future price drops.
#Bitcoin May Need to Breach $25,000 for Risk-Asset Revival – Just in case the #crypto and #stockmarket lows aren't in, tactical Bitcoin/crypto shorts could be warranted at the start of March. Monetary policy acts with a long, variable lag. A year ago the Fed funds rate was zero pic.twitter.com/mGYbt4gAxr
— Mike McGlone (@mikemcglone11) March 2, 2023
Fed rate hike: primary catalyst for crypto market decline
In his analysis of the recent financial market downturn, McGlone referred to the Fed’s insistence on raising interest rates despite the strategy’s potential to cause a recession in the economy. According to McGlone, cryptocurrencies and stocks have yet to see their lows.
This statement hints that the worst is yet to come and that cryptocurrency prices may fall further once the Fed applies the next base point (bps) on interest rate hikes. The Bloomberg analyst said that the stock market, including crypto, was one of the most energetic forces in the world at the time of the decline. The Fed’s monetary tightening amid high recession risks is also a strong catalyst for this decline.
Impact of US economic data on Bitcoin
While mentioning $25,000 as the primary support level for Bitcoin, he adds that March will determine the fate of crypto prices. Whether cryptocurrencies, including Bitcoin, can maintain their pivot levels depends on the CPI data that will be released in March. CPI data will determine how much the recession puts pressure on consumers and how much pressure the Fed’s tightening puts on Inflation.
If CPI data comes out lower, market sentiment will improve as crypto and stock prices push higher. However, if the index is high, investor sentiment goes deeper, causing a massive price drop in the stock and crypto market.
Bloomberg analyst says cryptocurrencies have yet to see bottoms
McGlone’s analysis suggests that the 2022 lows recorded by Bitcoin and other cryptocurrencies could be broken. Further dangers may be looming with the Fed’s additional tightening in March. In the report, McGlone also noted that markets appear to be underestimating the lagged effects of monetary policy, and this should have good reason to be defensive.
As McGlone points out, the Fed interest rate was zero a year ago and is now rising. He noted that risky markets like Bitcoin should show resistance in early March as the federal interest rate is currently approaching 5%. As Bitcoin failed to hold the key $25,000 support level at the beginning of March, higher interest rates are likely to push Bitcoin further down.
Michael Van De Poppe sets this support level for the expected drop
Michael Van De Poppe, one of the well-known analysts of the cryptocurrency market, is very important for the next few weeks to determine the fate of the market. says it is. The crypto expert analyzes the weekly chart where BTC stabilizes between $22,000 and $25,000 and shows a corrective move that is pulling altcoins down.
Van De Poppe predicts that if we lose the 200-week MA in total market cap, Bitcoin could drop to $19.7k. Simultaneously, he adds, “The market cap could also drop to $860 billion, driving the market down another 15%.”
#Bitcoin crashes, so what's next?
Check the update here:https://t.co/pyAHQJ72AT pic.twitter.com/NffWGoAdcw
— Michaël van de Poppe (@CryptoMichNL) March 4, 2023
The contact of the market cap with the 200-week MA is critical for Bitcoin.
According to Poppe, if the market cap stays above the 200-week MA, the market is at the crossroads of a potentially significant move in the next few weeks. Still, the odds remain at the bottom of the market, as the market can currently predict.
On the other hand, the altcoin market cap is holding above the 200-week EMA. However, if there is a slight correction around 10%, the market is also above the 200-week moving average. In addition, Michael emphasizes that all corrective actions are periods when the price will be fixed in a channel.
The analyst also continues with the expectation that interest rate hikes will take longer in the current inflation environment, causing prices to drop somewhat. Therefore, if the Fed begins to maintain its policy of raising interest rates by only 25 basis points, a normal correction within an uptrend can be expected, resulting in further acceleration in offside.
