McGlone Evaluates FED’s Moves and Bitcoin

According to Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, Bitcoin (BTC) could face a tough quarter as the Fed continues to reduce monetary stimulus amid the banking crisis.

McGlone said in a tweet that Bitcoin is trading higher than its 200-day moving average, which shows it is vulnerable to a correction if the economic trend slows down. McGlone argued that the Fed’s tightening policy is a significant pressure factor for risk assets such as Bitcoin and equities, and that the central bank’s reluctance to cut interest rates despite the banking crisis may increase the risk of a bounce in the bear market.

McGlone added that Bitcoin is a global leading indicator and risk asset that is traded 24/7, and that the sharpest rallies typically occur in bear markets. The analyst’s tweet included a chart showing the correlation between Bitcoin, the Nasdaq 100, and one-year Federal fund futures (FF13) reflecting market expectations for future interest rate changes. McGlone explained his views on BTC’s second quarter performance as follows:

“Rates too low for too long then going up too fast and still rising – A #Bloomberg top story April 7: “US Bank Lending Slumps by Most on Record in Final Weeks of March” What stops this? Not higher rates. Bitcoin hanging in at about $28,000“

The analyst’s tweet included a chart showing the correlation between Bitcoin, the Nasdaq 100, and one-year Federal fund futures (FF13) reflecting market expectations for future interest rate changes.