Bloomberg Intelligence’s senior macro strategist Mike McGlone is wary of crypto assets amid a worsening economic climate.
McGlone says in a new report that cryptos, outperforming other assets, could plummet if deflation sets in. According to the Bloomberg Intelligence senior macro strategist, deflationary risks are rising.
“It’s been a year of rebounds for just about everything that fell in 2022, with cryptos tops among high-beta performers, but a deflationary bust may be gaining fuel as seen in plunging commodities and bank deposits.”
The Bloomberg Intelligence senior macro strategist says that crypto assets face downward risks if the broader stock market falls just like bank stocks have in the recent past.
“Bitcoin, born of the 2008 financial crisis, is facing its first US recession, and if the broad stock market follows banks, cryptos are likely to ebb with the tide.”
On the key levels to watch for Bitcoin (BTC) and Ethereum (ETH), McGlone says,
“The up-and-coming 24/7 traded leading indicators, revolutionary technologies and assets – Bitcoin and Ethereum – may be running into a wall of resistance at the key round number levels of $30,000 and $2,000.
Our bias is bullish in the long term for the top cryptos, but an overwhelming force of the stock market going down with the Fed tightening into a recession has the potential to lower the tide for all risk assets, and Bitcoin and Ethereum are among the riskiest.”
Bitcoin and Ethereum are trading at $29,286 and $1,913, respectively, at time of writing.
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