Bitcoin Faces $10K Crash as Correlation with Stocks Hits Alarming High
Bloomberg Intelligence senior macro strategist Mike McGlone warns that Bitcoin could plummet to $10,000 due to its growing correlation with U.S. equities and potential tightening of monetary policy.
McGlone notes that over the past five years, Bitcoin's performance has broadly tracked the S&P 500 index, despite experiencing nearly three times the volatility. This combination makes Bitcoin a poor proposition for investors, according to McGlone, as it delivers stock-like returns with significantly greater risk.
The strategist highlights three alarming signals: Bitcoin's strong correlation with U.S. equity moves, the S&P 500's distance from its 200-week moving average, and expectations of rate hikes by the Federal Reserve. These factors could contribute to a sustained decline in stocks, which would have an outsized impact on BTC.
McGlone also points out that Bitcoin's recent rebound toward $80,000 is not necessarily a sign of renewed bull market but rather a temporary bounce before another leg lower.