Bloomberg analyst Mike McGlone warned investors not to blame Bitcoin and Ethereum if risk assets peak, noting that markets may be in the early stages of adjusting to disinflation, which is normal during recessions.
However, he added that the Fed may not be able to lower interest rates or increase the money supply as easily as in the past to stimulate the economy. McGlone also emphasizes that if this situation lasts for a long time, it can lead to deflation, which means that the prices of goods and services actually fall. This can lead to a vicious cycle of lower demand, lower production, lower income and lower spending.
Seeing the $2,000 levels, Ethereum has acted as a pivot since 2021 and could mark key resistance in 2023, according to McGlone.
Don't Blame $2,000 #Ethereum, $30,000 #Bitcoin If Risk Assets Peak – Markets may be in early the days of adjusting to #disinflation, which is normal in #recessions, but the #FederalReserve may never loosen with the ease it has in the past. Enduring deflation could be reciprocal pic.twitter.com/7yZE64RBap
— Mike McGlone (@mikemcglone11) April 13, 2023
McGlone's chart shows a strong correlation between Ethereum and the Nasdaq 100 Stock Index.
Mike McGlone warns that Ethereum hitting the $2,000 price level could represent either a renewed bull trend or a bearish correction.
McGlone is known for his bullish views on Bitcoin and commodities. He had previously said that it could reach $100,000 by 2025 as Bitcoin becomes more mainstream and less speculative.
*Not investment advice.
