Bitcoin (BTC), the leading cryptocurrency, has collapsed to levels reminiscent of early 2023, sparking uncertainty among investors.
Mike McGlone, Bloomberg’s senior macro strategist, drew a parallel between the path of Bitcoin and the US stock market crash of 1930. Worth noting is the downward trend of Bitcoin’s 100-week moving average (MA) chart.
This, combined with the Federal Reserve’s (FED) non-contradiction principle and potential asset regression, warrants consideration. Two-year US Treasuries yielding almost 5% pose a new challenge for Bitcoin.
Born in the aftermath of the 2008 crisis, Bitcoin has faced a prolonged correction period amid fluctuating global interest rates. The appeal of gold’s digital equivalent is diminishing with safer assets offering 10% total returns over two years. The historical significance of the 5% yield on US Treasuries suggests challenges for high-risk assets. McGlone’s analysis highlights Bitcoin’s downward trend relative to Treasury yields.
Keith Allen of Material Indicators recommended a cautious approach, awaiting a potential retest of the sub-$20,000 levels. Despite short-term scalping opportunities, Allen recommended limited exposure to preserve capital for a potential buying opportunity, stressing that Bitcoin has not bottomed. Various descending ranges stand out on his chart.
The Bitcoin market is facing a critical moment at the $25,000 support, the failure of which could lead to a return to the 2017 peak at $19,800. Concerns remain about continued downward momentum, possibly reaching a four-year low around $13,800. This change surprised bullish investors given the perception of an end to crypto winter.
Bitcoin’s momentum has shifted, prompting bulls to defend support levels against an extended decline for the year. Despite briefly recovering the $26,000 mark, BTC remains down over 11% over the past 7 days.
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2023-08-19 11:01:00
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