Bitcoin It was trading below $28,000 after a fresh rejection near the key $30,000 technical level. Stock futures were largely muted on Monday before a pause with movement likely related to the reaction to core inflation data.
While analysts continue to make major bullish price predictions for BTC, as highlighted by Invage HereThe current market outlook has some observers pointing to a possible downside in the risky asset market – and Bitcoin can accelerate these losses.
Why Risk Assets Could Be Lowered By Bitcoin Decline
According to Mike McGlone, Senior Macro Strategist at Bloomberg Intelligence, the Benchmark Cryptocurrency Could Continue shares and other low risk assets. His view is that if the market sees further catalysts for negative action, it will likely do so.
Goods strategist noted in a do on Monday:
“If the worst is not over for risk assets, bitcoin could slide lower. The Nasdaq 100 slumped nearly 55% through the end of 2021 to December versus its nearly 35% decline during the global financial crisis , which has since dampened expectations of a soft landing. If this is all it takes for an equity bear market, it’s likely to be the same for bitcoin and cryptos. But bitcoin is up nearly 20% through May 2023 versus 20% for stock indexes 70%, and they may bounce back within broader bear markets.
Bloomberg analyst says the US Federal Reserve is “still tightening in May.” The Fed then raised interest rates by 25 basis points. Although Fed Chair Jerome Powell hinted at a possible rate pause, McGlone believes the central bank may be “more willing to stay the course.”
While the consensus for a soft landing may now be priced in, analyst suggestions suggest the Fed may have to maintain the trend as they look to help inflation – as long as risk assets – which is the case. have non-harmful implications for bitcoin and other risk-on assets. , Meanwhile, analysts also point to a growing correlation between bitcoin and nasdaq,
Currently, the asset has a 0.42 correlation, which is close to its all-time high as liquidity pumped, which drove markets higher during the pandemic. If McGlone’s prediction comes true, BTC price could move back to the support zone, which would likely include a retest of $25,000 or lower. The $20k area remains a long term psychological support.
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