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Bitcoin Could Dip to $7K: Bloomberg Analyst Predicts

• Bloomberg Intelligence’s senior macro strategist Mike McGlone is predicting a liquidity crunch in the second half of 2023 due to a US recession and that this could push Bitcoin (BTC) lower.
• McGlone believes markets have bounced recently, but their strength is not sustainable and that a broader downward market trend will continue.
• He predicts Bitcoin could dip as low as $7,000 due to the US recession and suggests the Nasdaq 100 Stock Index needs to decline before rates can fall.

Bloomberg Analyst Predicts BTC Could Dip Lower

Bloomberg Intelligence’s senior macro strategist Mike McGlone is predicting that Bitcoin (BTC) could drop lower due to coming recessionary headwinds. In a new Crypto Outlook edition, McGlone suggests there might be a liquidity crunch in the second half of 2023 because of an expected US recession which could cause risk assets like BTC to drop further than they already have.

Market Strength Not Sustainable

Despite recent market bounces, McGlone does not believe this strength is sustainable. He predicts a broader downward market trend will continue and warns that Bitcoin may dip as low as $7,000 due to the negative impacts from the US recession. His view is supported by Federal funds futures in one year forecasts which suggest it may take a decline in equities for rates to fall.

Unprecedented 2020-21 Liquidity Boost

McGlone notes that while Bitcoin reached highs of around $30,000 in 2023 its comfort zone has been closer to $7,000 since an unprecedented 2020-21 liquidity boost occurred. As such he believes it will likely feel gravity from this level when the widely expected US recession hits.

Rising Risk Assets and BTC

McGlone says June may result in rising risk assets and Bitcoin if the worst is over or it could turn into further declines if it continues respecting current trends. Markets appear to have priced in an optimistic outcome from rate hikes but these are still rising so there remains much uncertainty about what direction prices will take next month or beyond for both stocks and digital assets alike.

Current Price Action

At time of writing, Bitcoin is trading for $27,074 – up 0.7% during past 24 hours – but with potential headwinds on the horizon caution should be taken when investing at these levels especially given McGlone’s predictions for future price drops.