Bloomberg Intelligence Senior Commodity Strategist Mike McGlone said that Bitcoin (BTC) has become the most important “risk appetite indicator” in the markets as uncertainty about the Fed’s interest rate policy continues.
McGlone reminded that Bitcoin's average price during the year is at $100,000, and stated that this level is likely to be tested again in the short term.
According to the analyst, volatility remains low as the crypto market experiences a summer lull. However, McGlone believes that Bitcoin could pull back towards support levels once the VIX index rises above 20 again.
“Even though Bitcoin, the world's most speculative digital asset, has reached new highs, a normalization process is inevitable. There is a risk that Bitcoin will break its support level towards the end of the year,” McGlone said, arguing that extreme speculative movements are being seen in crypto assets in the current environment.
McGlone stated that Bitcoin will continue to be a leading indicator of risk appetite in the long term, while pointing out that the Fed's tight monetary policy pressure against inflation and global economic weakening could create more volatility in the markets.
*This is not investment advice.
