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The Bitcoin value has risen to unprecedented levels this year, yet not all experts are confident the upswing will persist. A fresh alert from a crypto analyst indicates that the globe’s foremost cryptocurrency could be on the brink of a significant price decline, with a chance of erasing nearly all of its gains and dropping back to valuations not observed in years.
Why A 90% Bitcoin Price Decline May Be Forthcoming
In a recent discussion on the David Lin Report, a financial news outlet on YouTube, Bloomberg Intelligence senior commodity analyst Mike McGlone issued a severe warning for Bitcoin investors. Having accurately identified significant price points over the years, including the spike to $100,000, McGlone now forecasts that BTC could eliminate more than 90% of its gains, potentially dropping back to $10,000 in this market cycle.
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The Bloomberg analyst articulated that Bitcoin’s ascent to six figures on December 6 represented a significant psychological barrier. According to him, that benchmark was less an indicator of enduring strength and more a signal that the market had overheated. He characterized the increase as a classic instance of “selling when there’s yelling,” implying that investors often become ensnared in the excitement at the peak.
Since Bitcoin exceeded $100,000 on December 6, McGlone observed that gold has risen approximately 30%, while BTC has gained merely about 8%. Stock market indicators such as the S&P 500 have also recorded modest returns during the same timeframe, leaving digital assets struggling to exert influence.
McGlone emphasized the increasing correlation between Bitcoin and larger equity markets, noting that its 48-month correlation with the S&P 500 is currently at 0.6. He proposed that this trend highlights Bitcoin’s evolution into a risk-oriented asset, moving alongside stock market dynamics rather than acting as an independent store of value.
Further supporting his bearish outlook, the Bloomberg analyst highlighted that volatility indicators are shifting. In August, the Volatility Index (VIX) reached its lowest point of the year at around 14.2, while Bitcoin concurrently ascended to new heights. By the conclusion of the same month, volatility surged again, indicating that market sentiment might be evolving. For McGlone, these signals suggest that investors prepare for a potential corrective phase, with gold likely to continue surpassing BTC and other speculative assets.
Analyst States Bitcoin To $1 Million Is Improbable
During the discussion, Lin queried whether Bitcoin could ever rise to $1 million, referencing the same reasoning that propelled the asset naturally from $10,000 to $100,000. McGlone dismissed the notion, emphasizing that the current market environment is fundamentally different and does not favor such an outcome.
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The Bloomberg analyst elaborated that when Bitcoin hovered around $10,000, market sentiment was strikingly negative, creating the perfect conditions for a long-term upswing. In contrast, at a valuation above $100,000, the present market is filled with long positions, rendering it challenging for BTC to maintain upward momentum. In his perspective, the sheer burden of speculative exposure has left Bitcoin susceptible to a potential reversal rather than preparing for exponential advancement.
Featured image from Getty Images, chart from Tradingview.com
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