Bloomberg Analyst Says Bitcoin Is At Steepest Discount
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Bloomberg Intelligence Senior Commodity Strategist Mike McGlone says the crypto market crash recently reached extreme levels.
McGlone says Bitcoin (BTC) recently saw its steepest decline since the flagship crypto asset’s 200-week moving average began to decline.
“Bitcoin’s steep decline on September 20 after its 200-week moving average could be lowered shows the extremes of the crypto crash and the risk vs. reward of shorts vs. the possible continuation of an extended upward trajectory.”
Aggressive interest rate hikes by the US Federal Reserve give Bitcoin “a good reason” to reverse the downward spiral, according to a Bloomberg Intelligence strategist.
“Our graph [below] points to a good reason for one of the best-performing assets in history—the Federal Reserve’s aggressive rate hikes—but it’s about the end game. At about 4.3%, one-year federal funds futures (FF13) have never fallen faster than their 200-week moving average.
A Federal Fund future is a derivative based on short-term interest rates set by the Federal Reserve. Investors use derivatives to bet on or hedge short-term interest rate fluctuations.
Regarding the correlation of the crypto market with stocks, McGlone says that Bitcoin and other cryptocurrencies can determine the bottom of the stock market.
“Bitcoin is gaining ground globally as the best 24/7 hedge fund and leading indicator that never stops trading. This is a risk-free year, and crypto could be a sign of how low the stock market can go. The rapid drop in stocks is the primary force that changes interest rate hike expectations.”
This article was compiled by: DailyHODL
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