It’s been revealed that a Bloomberg analyst is issuing a Bitcoin alert about the correction of the most important digital asset. Check out the latest reports about the matter below.
Bitcoin correction alert
A warning has been issued by Bloomberg Intelligence’s senior macro strategist, Mike McGlone, to investors regarding Bitcoin’s recent correction.
He has expressed concern that the cryptocurrency’s surge in popularity during a time of zero interest rates may lead to problems for the industry as monetary policies start to tighten.
Despite the potential for future exchange-traded funds (ETFs), McGlone believes that Bitcoin’s price drop could be an indication of an impending liquidity crisis.
It appears that the current trend for cryptos, specifically Bitcoin, is experiencing a downturn despite recent news of US spot ETFs nearing approval and a thriving stock market.
This shift in the market may be indicative of a larger economic reset on the horizon.
Cryptocurrencies gained popularity during a time of zero-interest-rate policies, but now that these policies are reversing, it could have an impact on their prices.
Bitcoin, which is traded 24/7, may be a signal for the upcoming changes in the market, as it has recently experienced a drop of about 15% in the third quarter leading up to September 6th.
Pump and dump in liquidity
This could be a sign of an extraordinary pump and dump in liquidity.
In a recent ruling, a judge ordered the U.S. Securities and Exchange Commission (SEC) to review its decision regarding Grayscale’s application to establish a BTC ETF, in order to maintain consistency.
According to McGlone’s data, Bitcoin experienced significant growth from $1 to its all-time high of $69,000, during a period of low interest rates.
Therefore, it may be reasonable to expect that the leading crypto asset by market would experience a decline in price during periods of rising rates.
McGlone suggests that Bitcoin’s relative weakness could be attributed to the path of least resistance, due to the rapidly increasing rates.
In November, federal funds futures are predicted to reach 5.45%, which is significantly higher than the average of 0.6% between 2011 and 2021, during which time Bitcoin’s value increased from $1 to nearly $69,000.
