A top crypto analyst from Bloomberg says Bitcoin may start a bull market at $30k, but Fed tightening could be an obstacle.
Bitcoin is up over 5% in the last 24 hours following a recent development from the US Appeals Court. Since Bitcoin now trades at $27,386, a Bloomberg analyst has argued the potential of the bull market starting with Bitcoin hitting $30,000.
Bitcoin Bulls Resuming at $30k
In a recent tweet, Mike McGlone, Senior Macro Strategist for Bloomberg Intelligence, proclaimed, “Bitcoin $30,000 May Be New $12,000.”
McGlone implied that $30,000 is a key pivot level for Bitcoin. The analyst argued that Bitcoin moving back above $30k could signal a reversal in the downtrend that started in 2020. Interestingly, McGlone believes the ensuing uptrend would be similar to the scenario that played out when Bitcoin traded at $12k.
The analyst remarked in an image accompanying his tweet:
“Sustaining back above $30,000 would indicate a reversal upward akin to a similar pattern around $12,000 in 2H20.”
Bitcoin $30,000 May Be New $12,000, With Fed-Tightening Overhang – The inevitable approval of #Bitcoin ETFs in the US is moving closer, but the elephant in the room for all risk assets remains — the #Fed is still tightening despite the tilt toward economic contraction. pic.twitter.com/3i7MwxiZ3i
— Mike McGlone (@mikemcglone11) August 30, 2023
Notably, $12k was one of Bitcoin’s lowest points in 2020 before it sustained constant positive growth to its all-time high. The chart accompanying McGlone’s tweet illustrated the trajectory.
While the Bloomberg analyst acknowledged this possibility, he pointed out a key difference this time compared to 2020. He particularly noted the presence of unfavorable liquidity from financial institutions.
McGlone argued that banking regulators are pursuing tightening measures that increase the risks of rolling over investments within the stock market. He believes the situation could make it difficult for Bitcoin to sustain an upside move.
Furthermore, the analyst acknowledged the possibility of a spot Bitcoin exchange-traded fund (ETF) approval. While the event is expected to impact Bitcoin price, McGlone believes the US Federal Reserve is still an obstacle.
According to him, the Fed pursues stringent measures even though the economy seems to be leaning toward contraction.
Moreover, the analyst compares Bitcoin’s performance to that of the S&P 500. He argued Bitcoin is down 10% in the third quarter of the year compared to 1% growth for the S&P 500.
“Bitcoin may be anticipating a decline in equities typical for a recession,” McGlone submitted.