Expert Downplays Bitcoin’s Sub-30% Correction, Lists Positive Factors
Anjali Belgaumkar12 Jul 20242 min read
Analyst Scott Melker and Mike McGlone joined Gareth Soloway for an interview and discussed the recent inflation data and also shed light on Bitcoin’s price action. According to Scott, the recent CPI and inflation data showed a minor decrease of 0.1%, the first decline in four years.
Although this decrease is small, it fuels expectations for a FED rate cut, prompting a significant selloff in tech stocks. However, he believes this is more of a market rotation rather than money exiting the market.
Regarding Bitcoin, Scott said that it has only seen a 27% correction from its peak, which is typical in previous bull markets where corrections ranged from 35% to 45%. While he acknowledges the possibility of further declines, he is not overly concerned.
He explained the importance of Bitcoin getting back above the 200-day moving average to boost confidence. Despite potential short-term volatility, he sees mostly positive factors for crypto, such as the upcoming election, political support, and the anticipation of the next Bitcoin halving. He also notes that Bitcoin is not strictly following equity market trends and points out the importance of patience during slow market periods.
Mike McGlone’s Two Cents On BTC:
McGlone, who is the Senior Macro Strategist – Bloomberg Intelligence, said that the market is starting to recognize that the Federal Reserve (FED) can ease monetary policy, with a 100% chance of a rate cut at the September meeting. He believes the rising unemployment rate could justify this decision, though there is still more data to consider.
Today’s numbers are seen as noise in the bigger macroeconomic picture, where the market had swung too far towards recession last year and too far away from it this year, now balancing in the middle.
He added that Bitcoin considered a leading indicator, had a good run earlier in the year but is showing weakness, suggesting a need for a pullback in equities to let things settle. In commodities, particularly grains, he sees breakdowns indicating the start of a broader reversion in equities, Bitcoin, and bond yields, with yields following China’s trend.
Also Read: Crypto Liquidations To Subside, BTC And Crypto Market To Rebound: JP Morgan
