Bloomberg Analyst Issues Bitcoin and Ethereum Warning, Says Potential Deflation and Recession Could Crush Risk Assets

April 17, 2023 The Daily Hodl

US Bank Lending Drops by Record $105 Billion in Two Weeks, Trillions Moving to Money Market Accounts, Elon Musk Warns ‘Trend Will Accelerate’

April 9, 2023 Bitcoin.com

Historical Bitcoin price fractal hints at rally toward $50K

April 7, 2023 Coin Telegraph

$Historical Bitcoin price fractal hints at rally toward K$

Bitcoin

Bitcoin price in 2023 mirrors a 2015 fractal that saw BTC price doubling from $350 to $700 in seven months.

Bitcoin (BTC) could rally toward $50,000 in 2023, according to a historical price fractal highlighted by popular market analyst Mags.

Bitcoin price trend in 2015 vs. 2023

The chart fractal highlights the similarities between Bitcoin's ongoing price trends and those recorded after the completion of the 2013-2015 bear market.

That includes Bitcoin's consolidation inside the $200-300 range between January 2015 and August 2015, which appears identical to its consolidation between the $18,500-25,000 range after the supposed completion of its 2021-2022 bear market.

*BTC/USD price performance comparison between 2015 and 2023. Source: TradingView/Mags*

BTC's price broke above the $16,000-25,000 range in March 2023, prompting Mags to highlight its resemblance to the breakout above the $200-300 range in October 2015.

Since this resulted in a rally toward $700 in June 2016, the analyst sees the scenario potentially repeating in 2023, with the BTC price doubling to $50,000.

"Being bearish here [when Bitcoin's price is around $28,000] is like being bearish at $350," Mags added.

Liquidity crunch may spoil Bitcoin price rally

The bullish argument for Bitcoin comes amid anticipations that the U.S. Federal Reserve would slow the pace of its interest rate hikes.

Due to lower rate expectations, the yield on the benchmark U.S. 10-year Treasury note has declined. That, in turn, has boosted investors' appetite for zero-yielding assets like Bitcoin and gold.

*US10Y weekly chart versus BTC/USD and XAU/USD. Source: TradingView*

In addition, lower yields have also sapped U.S. dollar demand with the dollar losing 1.33% in 2023 versus a basket of top foreign currencies. Since Bitcoin's value is largely denominated in the dollar, it means higher prices for BTC/USD.

However, Bloomberg analyst Mike McGlone has cautioned about a potential bull trap in the Bitcoin market due to a mounting liquidity crunch.

He said:

"It may be illogical to expect the stock market, crude oil, copper, and the Bloomberg Galaxy Crypto Index (BGCI) sustain the recent bounces with year-over-year measures of money supply and commercial bank deposits falling around 2%."

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin ‘faces headwinds’ as US money supply drops most since 1950s

April 6, 2023 Coin Telegraph

Bitcoin

Research from Bloomberg Intelligence argues that liquidity conditions still do not favor a continuation of the Bitcoin rally.

Bitcoin (BTC) and crypto may yet see a long-term correction thanks to central banks keeping liquidity tight, Bloomberg warned.

In its latest research, Bloomberg Intelligence revealed a cool stance on the ongoing 2023 crypto market rally.

Bloomberg: Expecting BTC price to hold “may be illogical”

Despite gaining 70% in Q1, Bitcoin is not convincing everyone that it will continue to climb or even maintain current levels near $30,000.

Examining the macroeconomic climate, Bloomberg Intelligence became the latest voice to note the close relationship between crypto performance and global central bank liquidity levels.

As inflation bites, banks have been withdrawing liquidity from the economy, with risk assets declining as a result — including crypto. The United States Federal Reserve’s quantitative tightening (QT), which began in late 2021, coincided with the current all-time high for Bitcoin.

Despite the recent banking crisis, Bloomberg noted that plunging M2 money supply and bank deposits mean that liquidity continues to be squeezed.

“Risk assets typically rise and fall on the back of liquidity and plunging US money supply, and bank deposits indicate headwinds for cryptos,” it stated in an analysis uploaded to Twitter by Bloomberg Intelligence senior macro strategist Mike McGlone.

“It may be illogical to expect that stock market, crude oil, copper and the Bloomberg Galaxy Crypto Index (BGCI) to sustain recent bounces with year-over-year measures of money supply and commercial bank deposits falling around 2% — the most in our database since 1959.”

The misgivings come as Bitcoin faces a battle to flip historical resistance back to support, with bulls as yet unable to effect major change.

When it comes to liquidity, meanwhile, others have already noted that crypto now responds to the actions of central banks other than the Fed, and both China and Japan have enacted liquidity injections this year.

“A top question at the start of April is what stops the contracting liquidity?” Bloomberg, meanwhile, continued.

“Most central banks still tightening may portend a lower plateau for the BGCI. Our take is Bitcoin faces headwinds but will eventually transition to trade more like gold and Treasury bonds.”

A thousand words in a chart - liquidity rug-pull:
It may be illogical to expect the #stockmarket, #crudeoil, #copper and #Bitcoin to sustain recent bounces with year-over-year measures of money supply and commercial bank deposits falling the most in our database since 1959. pic.twitter.com/O36SxGdK48
— Mike McGlone (@mikemcglone11) April 5, 2023

U.S. dollars gives Bitcoin heat

BTC/USD traded around $28,100 at the time of writing on April 6, according to data from Cointelegraph Markets Pro and TradingView.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

In a potential short-term tailwind for risk assets, the U.S. Dollar Index (DXY) saw fresh losses, abandoning a modest comeback to drop back below 102.

Analyzing the situation, popular Crypto Twitter account Cold Blooded Shiller remained tentatively optimistic about the outcome of BTC’s price.

$DXY rejecting at the 4h resistance zone.

Indexes doing the next leg down today into some good regions.$NQ diverging the hourly on the last low and close to Daily pivot level.

RSI's cooled off.

Your prayers may just be working. But we need more energy. https://t.co/NEqizbwvUr pic.twitter.com/f9hIgteuzn
— Cold Blooded Shiller (@ColdBloodShill) April 6, 2023

Analyst Justin Bennett nonetheless flagged a distinct range still intact for the DXY, predicting a rebound to come.

“All the ‘dollar is dead’ chants are about to be silenced by what is still the global reserve,” he warned.

*U.S. dollar index (DXY) annotated chart. Source: Justin Bennett/Twitter*

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin ‘untouchable’ amid regulatory pressures, says analyst

April 4, 2023 Coin Telegraph

Bitcoin

Bitcoin is "untouchable,” because it's more decentralized than other cryptocurrencies in the space such as Ether according to senior commodity strategist Mike McGlone.

Bitcoin (BTC) is "untouchable" despite ongoing regulatory pressures in the crypto sector and those who don't have some crypto exposure are "seriously silly" according to Bloomberg's senior commodity strategist Mike McGlone.

During an April 3 stream with crypto podcaster Scott Melker, McGlone argued that unlike other cryptocurrencies such as Ether (ETH), Bitcoin couldn't be killed by regulators because it's more decentralized.

Can #Bitcoin replace the banks? And can it remain uncorrelated if markets crash again?

Discussing with weekly guests @mikemcglone11 and @daveweisberger1.

It’s Macro Monday at 9:30 am EST. https://t.co/WDVCbkkWyU
— The Wolf Of All Streets (@scottmelker) April 3, 2023

"There's so much disdain about regulators pushing back on the whole space, and that's the key thing where Bitcoin sticks out,” McGlone said.

“You can't do anything to this, and you can't kill it and it's just unprecedented; it is untouchable."

"You could make a case that Ethereum is a security when you hear about all these upgrades and people doing this and people doing that to make it better, I'm like okay well that's kind of scary, can't do that to Bitcoin, it's why it's fine and impressive," McGlone added.

The crypto sector has faced a wave of crackdowns in the United States recently, with the U.S. Securities and Exchange Commission (SEC) filing charges against crypto exchange Kraken for its staking services, then suing stablecoin issuer Paxos over Binance USD (BUSD). The regulator also proposed rule changes targeted at crypto firms operating as custodians.

McGlone stated he is still bullish on BTC but expects the price to go down again in step with other assets if a recession hits.

Back in January, he warned BTC might not see the surge being predicted just yet, as there are challenging macroeconomic conditions and pressure from interest-rate hikes.

According to McGlone the April 2 decision by the Organization of the Petroleum Exporting Countries (OPEC) to reduce daily oil output makes a recession more likely, as well as interest rate hikes from the Federal Reserve to clamp down on inflation.

"We had our morning call this morning and our economist Anna Wong said, Yeah, their base case is for that recession to kick in Q3," he said.

"OPEC is helping that. Fed tightening is helping that. So all assets have to go down. That means Bitcoin too. It's the fastest horse in the race. So I'm overall, certainly relatively bullish."

In McGlone's opinion, it's "seriously silly" to risk not having some exposure to crypto or trying to stand in its way.

"The key thing I look at simplistically for Bitcoin is, if you're a money manager, why take the risk of not having some of this revolutionary asset, particularly because it's so controversial you want to have at least some in it because you don't want to look like an idiot over history,” he said.

"The smart guys get it; we're not gonna be a Blockbuster or Sears, and we're going to be part of this technology."

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

Hong Kong crypto firms seeing interest from Chinese banks: Report

March 27, 2023 Coin Telegraph

Bank of China Ltd

Several Chinese banks have been seeking to offer services to crypto firms in Hong Kong, despite a ban on crypto on the Chinese mainland.

Crypto firms setting up in Hong Kong ahead of a new licensing regime for crypto exchanges in June have reportedly found some unexpected allies in the region — Chinese state-owned banks.

According to a March 27 report from Bloomberg, Chinese banks, including Shanghai Pudong Development Bank, the Bank of Communications Co. and Bank of China Ltd., have either started offering banking services to crypto firms in Hong Kong or made inquiries with crypto firms, according to "people with knowledge of the matter.”

One source claims that a Chinese bank sales representative even visited a crypto firm’s main office to pitch banking services. This is all despite an ongoing crypto ban in China.

Cointelegraph reached out to Shanghai Pudong Development Bank, the Bank of Communications Co., and Bank of China Ltd for further comment, but did not receive a reply before publication.

Asked for comment, Julia Pang, head of banking relations at Hong Kong-based crypto trading platform OSL, told Cointelegraph that her firm welcomed “growing interest from Chinese banks in engaging with the regulated crypto industry.”

“This development is encouraging for both the industry and the broader ecosystem, as it demonstrates a maturing understanding of the crypto sector by traditional financial institutions,” she said.

A spokesperson for the firm said they couldn’t currently provide a comment on whether the firm had been approached by any state-owned Chinese banks.

In October last year, the government of Hong Kong floated the idea of introducing its own bill to regulate crypto, and Hong Kong’s Securities and Futures Commission on Feb. 20 released a proposal for a regime for cryptocurrency exchanges, set to take effect in June.

Christopher Hui, Secretary for Financial Services and the Treasury Bureau, delivers the opening keynote and reinforces HK government’s vision to develop the virtual asset sector in Hong Kong.
He mentions Web 3 presents a paradigm shift to the internet era. pic.twitter.com/9MGkWOCj0O
— Everest Ventures Group (EVG) (@EVG_Ventures) March 20, 2023

According to a Feb. 20 report, it is also understood that representatives from the China Liaison Office have been frequenting Hong Kong crypto gatherings.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

Bloomberg