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The cryptocurrency market may be facing its “first real recession” and a milestone similar to the invention of Bitcoin (BTC) cannot be ruled out, predicts a prominent Bloomberg strategist. I’m here.
Bloomberg senior market strategist Mike McGlone took to Twitter this weekend to tell his followers that the global financial crisis, the last major economic contraction in the U.S. of 2007-2008, led directly to the birth of Bitcoin. reminded me.
If there were to be another “real recession”, he said, we could see comparable results or technological breakthroughs.
Bitcoin’s white paper was released in October 2008, less than a year after the crisis began and just a month after the collapse of a major US investment bank. Lehman Brothers.
How far will cryptocurrency prices go?
According to McGlone, who has gained popularity for his generally bullish stance on Bitcoin, the key question as we enter a recession is how far the price will go before the cryptocurrency’s long-term uptrend resumes. It means that it will fall.
A note in a screenshot of McGlone’s tweet points out that the Nasdaq 100 Index, a tech-centric stock index that Bitcoin tends to correlate with, is currently trading near its 200-week moving average. increase. Such price levels “remain at relatively high levels based on the history of recession in the United States,” the memo said.
He added that the Nasdaq 100 bottomed out at a level almost 70% below the 200-week moving average in 2002 and reached a level about 40% below that in 2009.
“We do not believe the crypto market will be spared if the tide of risk assets continues to recede,” said the note, ultimately offering an optimistic long-term forecast.
“In the unlikely scenario of a soft landing, the Bloomberg Galaxy Crypto Index looks poised to once again beat most equity indices.”
The tweet from McGlone follows Bloomberg Intelligence’s February Crypto Outlook release three days ago.among them reportMcGlone also warned of a possible recession and its impact on crypto prices.
“The U.S. yield curve shows the highest recession probability in our database since 1992, making it unlikely that the index will avoid resuming its downward trajectory in 2022,” McGron said. warned in his report.