• The primary catalyst for the downturn of Bitcoin and Crypto prices is the US Federal Reserve’s hawkish inflation-curbing strategy.
• Bloomberg analyst Mike McGlone said that crypto bear market is far from over and advised buy-and-hold investors to seek protective insurance against asset devaluation.
• He also noted that the Fed’s insistence on raising interest rates despite potential recession risks could further push down cryptocurrency prices.
Fed’s Interest Rate Hike: Primary Catalyst For Crypto Market Downturn
Mike McGlone, the senior macro strategist at Bloomberg Intelligence, outlined the primary catalyst for the downturn of Bitcoin and Crypto prices. In his recent digital asset analysis, McGlone cited the US Federal Reserve’s hawkish inflation-curbing strategy as the primary factor that could exert downward pressure on risk assets like digital assets.
Crypto Bear Market Far From Over
The analyst noted that the crypto bear market is far from over while advising buy-and-hold investors to seek protective insurance against asset devaluation. He also said that the recent bounce back by digital assets rendered them susceptible to future price downturns.
Risk Of Recession Weighs On Digital Asset Prices
While analyzing the recent downturn in the financial market, McGlone addressed the Fed’s insistence on raising interest rates despite potential recession risks. According to him, crypto assets and equities have not seen their lows yet – implying worse may come if Federal Reserve implements its next basis point (bps) in its interest rate hikes.
Potential Pivot Level Dependent On CPI Data
McGlone mentioned $25,000 as primary support level for Bitcoin while adding that March will decide fate of crypto prices. This assessment implies whether cryptocurrencies sustain their pivot levels depends on CPI data coming out in March – if index comes out low sentiment will improve while spiking crypto & stock prices; conversely high index would plunge investor sentiment even deeper causing further drop in crypto prices.
Advice For Buy & Hold Investors
The Bloomberg analyst advised buy-and-hold investors to seek protective insurance against asset devaluation due to potential downside associated with rising interest rates & recession risks; while mentioning $25k as likely bottom for BTC during this period of uncertainty caused by Fed’s monetary tightening policy
