Bitcoin at Risk of Major Collapse – Here’s Why
As Bitcoin (BTC) bulls fight hard to keep the New Year rally going, one expert is sounding the alarm.
So far, 2023 has seen the start of a sensational recovery from the depths of December.
BTC has gained +31% YTD in price action that has redecorated the markets. Many influencers on crypto twitter have been quick to mark the end of the crypto winter.
The warning bells come from none other than Mike McGlone – ‘the man behind the dashboard’. An expert known in recent years for the mainstreaming of Bitcoin in the financial media.
McGlone is a former head of research and strategy at ETF Securities who became Bloomberg’s senior macro strategist.
Bitcoin (BTC) may roll over
Taking his thesis to twitter. The top analyst presented his case that risky assets are not out of the woods yet.
Concerns about macro sentiment for risky assets like crypto are at the heart of McGlone’s concerns, he explained.
“The primary options for risk assets in Q1 appear to be either a pullback or a bottom.” so McGlone.
“Bitcoin May Be About to Roll Over – Benchmark Crypto Pulls Back from Resistance as Top Headwind Remains”.
Indeed, February’s Bitcoin price action has been challenging. A retracement from stiff resistance at $24,000 saw the price drop to local support at $21,750.
But as bulls try to consolidate gains here – things are not looking good. The chart structure is entering a dreaded head-and-shoulders pattern.
Can the Fed Explain February’s Bitcoin Resistance?
McGlone’s analysis suggests this is due to the ongoing pressure from headwinds from the US Federal Reserve.
“Rising Interest Rate Expectations as Indicated by Federal Futures Funds [in Q1] … but the main difference: the markets are lower than last year.”
“Don’t fight the Fed,” he added.
The fear of interest rate increases has actually characterized the market since the end of 2021 – so far things have been smooth.
Nevertheless, the markets so far in 2023 have been calmed by Jerome Powell’s surprising dovish sentiment.
This has provided a much-needed boost of confidence for Bitcoin, which has been encouraged by a bullish S&P 500.
What is clear is that for now Bitcoin is on a collision course with its 200-day MA. If it doesn’t bounce off support soon, things are going to get hairy.
A potential price puller could be today’s statistics published by the Fed. The BTC markets are ready and ready to trade on the CPI numbers that were released at 13:30 UTC.
The markets are pricing in a YoY estimate of 6.2%, and a core YY estimate of 5.5%.
Read more:
Bitcoin (BTC) falls out of favor after losing grip at $22k
The Bitcoin market realized on-chain losses for the first time in over two weeks – what this means for the BTC price
