Bloomberg Intelligence Senior Commodities Strategist Mike McGlone stated that Bitcoin’s upside potential may have largely ended, and he sees a risk of a sharp drop towards the $10,000 level for BTC.
McGlone argued that the period of massive monetary expansion in 2020 and 2021 may have represented “the best point Bitcoin could reach.” He noted that Bitcoin has been trading below its peak of approximately $69,000 recorded in 2021 since June 2nd, despite stock markets reaching record highs.
The renowned strategist stated that he believes the period of strong price increases in Bitcoin has come to an end. McGlone noted that Bitcoin’s rise led to the emergence of millions of competing cryptocurrencies, and argued that the asset is becoming increasingly dependent on risk appetite in the stock markets.
According to McGlone, Bitcoin’s 60-day correlation with the S&P 500 index, which was approximately -0.10 in 2019, approached 0.60 as of July 10th. This indicates a weakening of Bitcoin’s previously championed status as an independent and alternative store of value.
McGlone, questioning how Bitcoin would react in the event of a limited pullback in high-risk assets like the S&P 500, said the price could tend to head towards the $10,000 level.
McGlone, recalling that Bitcoin was initially seen as “digital gold,” argued that cryptocurrency has become one of the assets among tokens that can be produced in unlimited numbers over time.
