According to Mike McGlone, senior commodity strategist at Bloomberg, the world's largest cryptocurrency Bitcoin may have entered a downtrend as it struggled to stay above its 52-week moving average.
In his latest post, McGlone said that Bitcoin was trading at around $7,000 at the end of 2019 before the unprecedented liquidity injection by the Fed and other central banks in response to the pandemic.
The analyst stated that it declined excessively when it dropped to around $ 15,000 in 2022, and that it may have climbed excessively when it increased to $ 30,000 in April 2023.
He added that Bitcoin had slumped to around $26,000 as of June 8, but could still face further downside risks as the FED tightened its monetary policy twice despite a bank crisis.
McGlone said that Bitcoin's bearish trend contrasts with the resistance of the stock market, which has largely ignored the Fed's hawkish signals.
He concluded that Bitcoin could return to its 52-week downward sloping average, explaining that this reflects the historical pattern of rises and falls in the crypto market.
*Not investment advice.