Following his observations of a concerning trend in the cryptocurrency market, Bloomberg’s senior commodity strategist has more recently predicted a lingering ‘crypto hangover,’ which he believes will continue throughout the fourth quarter of 2023.
Specifically, based on historical patterns, Mike McGlone has noted that Bitcoin (BTC) may need to fail first as a prerequisite “for Fed[eral] fund futures in one year (FF13) to trough and indicate that liquidity is being turned back on,” as he explained in an X post shared on October 3.
In other words, “declining Bitcoin has preceded Fed pivots,” despite the Fed likely not caring about the maiden cryptocurrency, but “its 24/7-traded, leading-indicator status could be gaining traction.” As McGlone specified:
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“The bottom line for Bitcoin at the start of 4Q may be that liquidity remains negative, with price implications. Coming of age in a zero-interest-rate world, the crypto hangover could be enduring as global rates continue to rise, despite recession signals.”
Earlier, the finance expert pointed out that cryptos were grappling with the specter of a recession and that the third quarter’s weakness in the crypto space could either be a transient recovery blip or a more ominous sign of an impending recession, as Finbold reported on October 2.
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Meanwhile, Bitcoin was at press time changing hands at the price of $27,578. This represents an increase of 0.42% in the last 24 hours, as well as still holding onto the gain of 2.88% across the previous seven days and the 6.56% increase on its monthly chart, as per the most recent data on October 4.
As the commodities expert concluded, Bitcoin gaining in 2023, along with most other risk assets, “may be a short-covering rally,” adding that “$30,000 remains pivotal Bitcoin resistance, with risks tilted toward $10,000,” whereas he retains his recession outlook in the United States by the year’s end.
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