Bloomberg Intelligence senior commodity strategist on correlation between crypto and crude oil & Bitcoin being in bull cycle still
Mike McGlone, a leading commodities strategist for Bloomberg Intelligence, shared his thoughts on the current situation on the financial markets, but this statement differed from all the others with one nuance. Thus, the expert said that Bitcoin, at the moment, is still in a bull cycle, but this cycle is elongated, and the main cryptocurrency itself is selling at a discount right now.
According to the analyst, the presence of BTC in a bull cycle is evidenced by consolidation, with the steepest discount to its 100-week moving average. McGlone backs up his claim with a chart showing that the last time Bitcoin drew such figures was in 2015 around the price of $300, and then in early 2019 at around $5,000.
Sept. #Cryptos Outlook- There are few more powerful forces than stocks declining at high velocity, particularly with the #Fed tightening as the world leans toward recession. Cryptos are a minor part of the ebbing tide but not from an advancing technology, leading-indicator status pic.twitter.com/0Bnj4saAfm
— Mike McGlone (@mikemcglone11) September 6, 2022
The strategist relies on crude oil price levels in addition to Bitcoin in his inferences. It was the rapid rise in energy prices in the first half of the year that intensified the Fed’s fight against inflation, putting pressure on the most risky assets, McGlone says. When the dust settles, cryptocurrency prices should rebound.
Current state of crypto market
Although the market seemed more buoyant this morning, the crucial $3,900 level on the S&P500 was broken, bringing the crypto market closer to further declines.
Bitcoin, for its part, is surprising. BTC’s dominance momentarily reached 38.9%, thereby renewing its January 2022 lows. Most likely, this decline is due to Ethereum’s transition to PoS, which caused people to pour money into ETH. The main altcoin on the market did not escape the fate of the whole market but continues to trade in the green zone.