Bitcoin (BTC) is heading for its worst monthly performance since the 2022 crash, marked by major corporate bankruptcies, following a sharp decline in value in November.
The leading cryptocurrency shed nearly a quarter of its value in November, marking its sharpest monthly decline since June 2022, according to Bloomberg data.
Bloomberg analyst Mike McGlone commented on the program that Bitcoin’s decline isn’t unique to cryptocurrency, but rather signals broader macroeconomic and market dynamics. According to McGlone, Bitcoin’s sharp pullback could signal similar weakness for the stock market as the year draws to a close.
The analyst noted that the S&P 500 has only closed with negative returns for two years since 2008, saying, “In every down year, the Bitcoin-gold ratio has collapsed dramatically. We’re seeing the same pattern this year. This indicates serious problems in the market structure.”
Bitcoin’s consistent lower lows over the last 11 trading days are considered a notable technical breakout. McGlone noted that technical indicators are particularly important because Bitcoin isn’t backed by any underlying asset, and that the RSI’s deep entry into oversold territory is also noteworthy.
Despite this, McGlone believes a short-term rebound is possible but won’t change the overall trend. “Even if a rebound occurs, the overall outlook has reverted to a bear market,” he said. “$100,000 is possible, but it’s not a permanent reversal signal; the downtrend could continue.” The analyst specifically identified the $70,000 level as a key support level.
The altcoin market is dominated by a red landscape. While Ethereum, XRP, and other major tokens haven’t escaped sharp declines, McGlone specifically stated that Dogecoin is a symbol of the irrationality in the market structure: “Dogecoin started out as a joke and has no basis in reality. Despite this, its market capitalization once reached $60 billion. This area needs to be cleansed.”
McGlone stated that this widespread sell-off in crypto assets could be the first stage of a trend toward flight from risky assets amidst the ongoing low volatility in US stock markets. He added, “This Bitcoin crash coincided with a period of liquidity withdrawal in the market. If this pressure spills over into stocks, that’s when the real risk for the end of the year becomes apparent.”
*This is not investment advice.
Source: https://en.bitcoinsistemi.com/bloomberg-analyst-mcglone-who-predicted-bitcoin-would-reach-10000-speaks-again-shares-the-most-critical-level-for-btc/
