Bitcoin hasn’t bottomed out yet, a 40% drop is still waiting

Photo by André François McKenzie on Unsplash

• Bitcoin is heading significantly lower after the sharp break from the support levels.
• Mike McGlone added that the Bitcoin story is bright in the long term, saying that institutional investors face greater risk by not having any exposure to Bitcoin for a five-year period.

The collapse of the FTX exchange spread like a contagion across the crypto space with Bitcoin and other altcoins seeing sharp correction in recent weeks. As of now, Bitcoin is trading somewhere near the $16,700 level with a market cap of $321 billion.

However, some market analysts believe that the bottom is still not in! Bloomberg Intelligence senior macro strategist Mike McGlone, who has been bullish on BTC in the past, sets a new floor price for the crypto. During his recent interview with CryptoBirb, McGlone said that Bitcoin’s heavy breakout from the support levels was a strong indicator that the BTC price could be heading significantly lower.

He expects the BTC price to fall another 40 percent from current levels. That means the BTC price could drop all the way to $10,000 from here on out. During his interview, McGlone said:

Initially, when the market broke down, that was my indication, that it’s going to continue to break down because volatility is almost always a good indicator, especially when you hit a low. When markets break out of a consolidating area for a good reason, it means it’s going much lower. So that’s why I initially posted that Bitcoin might not plateau until the $10,000-$12,000 range.

No long-term weakness in Bitcoin

In earlier reports by Bloomberg Intelligence, McGlone had explained why he believes in the Bitcoin story. Like Gold McGlone believes that Bitcoin will emerge as a valuable asset class in the future.

He further added that any short-term selling pressure caused by macro events such as the Fed rate hike is not a signal of long-term weakness. He said that on a five-year horizon, institutional players face a greater risk of not allocating to crypto rather than avoiding it. Just like Bitcoin, McGlone is also positive about Ethereum. He said:

Everything is going down this year. This has been the worst year ever for stocks and bonds combined. I mean ever, if you go back 80 years… So to me the risk going forward, as I think for most major institutions on a five-year basis at least, the risk is not being allocated to this space to any degree.

And I don’t mean the 20,000 highly speculative cryptos that you can find on CoinMarketCap. I mean top 10, top 100, an index that tracks them. So definitely Bitcoin, Ethereum.

Yes, they could crash, but to me, an index that tracks them will just keep doing what it’s doing, and this kind of thing often forms that foundation. The most important thing to remember right now is that the Fed is still banging hard, all risk assets are going down. Cryptos were the fastest on the way up and the fastest on the way down.