Bloomberg analyst Mike McGlone warns on Thursday that Bitcoin is at risk of significant downside, facing pressure from rising interest rates and a potential drop below $25,000.
“The key thing is 800-pound gorilla… the Federal Reserve is still tightening. So I think this process of reversion is in place.”
McGlone believes that the tightening monetary policy, coupled with the asset’s excessive price surge, could trigger a reversion process, impacting not only Bitcoin but also other risk assets.
The analyst also added “The pump in the price [of Bitcoin] was excessive. And we’ve seen that in Amazon [online retailer’s stock]. We’ve seen that in all risk assets and I think it’s still going to be the leading indicator.”
He suggests that Bitcoin’s recent behavior mirrors that of risk assets like Amazon stock and points out that the leading cryptocurrency may eventually trade more like gold and treasury bonds.
McGlone’s analysis indicates that Bitcoin could experience a drop of over 5%, potentially causing a flight from other risk assets. As of now, Bitcoin is trading at $26,651.
Read Now: Shiba Inu dummy token CAL is the talk of the town — amasses $4M in volume within hours