Bloomberg Strategist: "Bitcoin (BTC) at Risk of Falling to $10,000 if S&P 500 Correction Occurs"

▲ Bitcoin (BTC), US Stock Market, S&P 500/AI Generated Image

A warning has emerged that Bitcoin (BTC) could fall to $10,000 if the S&P 500 undergoes a correction, as it has become closely correlated with the US stock market.

According to crypto media outlet U.Today on September 13 (local time), Mike McGlone, Senior Macro Strategist at Bloomberg Intelligence, analyzed that Bitcoin's sell signals are strengthening. He pointed out that Bitcoin is becoming closer to a risk asset, influenced by US stock market movements, rather than an independent 'digital gold'.

The first warning sign McGlone cited is technical resistance at $76,746. Bitcoin failed to break the psychological resistance level of $80,000. Additionally, 1-year Federal Funds Rate futures are reflecting the possibility that the Federal Reserve (Fed) will raise interest rates by an additional 0.70 percentage points. The analysis suggests that continued tightening could restrict liquidity for speculative assets.

The overheating of the S&P 500 was also identified as a risk factor. The index is significantly above its 200-week moving average. McGlone believes there is an increased possibility of large-scale profit-taking by institutional investors. He analyzed that Bitcoin has shown similar returns to the S&P 500 over the past five years, but with approximately three times the volatility.

The strongest warning is the $10,000 scenario. McGlone predicted that if the S&P 500 drops by 20% in a normal correction, Bitcoin could fall to around $10,000, which he considers a long-term key price level. He explained that for Bitcoin to prove its role as a safe-haven asset, it must show an independent trend, rising when the stock market falls.

McGlone assessed that current macro indicators do not support Bitcoin's independence. With high stock market correlation and the possibility of further interest rate hikes remaining simultaneously, the analysis suggests that Bitcoin's 'digital gold' status is once again being tested.

[Article Key Summary]

-Mike McGlone assessed that Bitcoin is strongly correlated with the S&P 500 and is losing its independent safe-haven asset characteristics.

-The possibility of an additional 0.70 percentage point interest rate hike and the divergence of the S&P 500 from its 200-week moving average were cited as major sell signals.

-A scenario was presented where Bitcoin could fall to around $10,000 if the S&P 500 undergoes a 20% correction.

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