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Mike McGlone said Bitcoin was “rolling over from an extended plateau akin to 2018 and 2022.”
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He said that “dominoes could tumble” if it failed to prove strength.
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Fidelity’s Jurrien Timmer said “a new 4-year cycle bull market could be underway” for Bitcoin, adding that “bull markets rarely start with” a narrative.
Mike McGlone, a Bloomberg Intelligence senior commodity strategist, said on Sunday that Bitcoin (BTC) “may have to prove strength, because if it doesn’t, dominoes could tumble” for stocks and metals, even as Fidelity’s Jurrien Timmer said a new bull market for crypto could already be underway.
McGlone explained that Bitcoin was “rolling over from an extended plateau akin to 2018 and 2022,” based on a chart of 50-week moving averages. He described Bitcoin as “a leading indicator for risk assets since its inception in 2009.”
According to him, the S&P 500 (SPX), the Bloomberg Commodity All Metals Total Return Subindex and copper have not followed Bitcoin lower, as they did in earlier crypto bear markets, which set the period apart. “Is the first-born crypto issuing a warning or a feint?” he wrote.
McGlone also called October “notorious for market inflection points” and said that Federal Reserve rate-hike expectations “may signal an endgame for rapidly rising risk-assets, wealth creation and inflation.”
So far, the month has not gone Bitcoin’s way. The apex cryptocurrency is down more than 2% in October and on track for its first back-to-back losing October in more than a decade.
Bull Markets Rarely Start With A Narrative
Timmer, Fidelity’s director of global macro, read Bitcoin’s chart differently, saying that “a new 4-year cycle bull market could be underway,” based on Bitcoin’s power law patterns. “There doesn’t seem to be a narrative, but then again, bull markets rarely start with one,” Timmer said. His chart placed Bitcoin’s current reading in the area Fidelity labeled the “accumulation zone.”
Liquidity Holds The Key
Both strategists flagged tighter conditions in the near term. Timmer said gold and Bitcoin “both remain in holding patterns,” and added that gold saw steady inflows but continued “to be held down by a deceleration in global liquidity growth,” which he tied to tightening financial conditions.
The Fed raised its target range to 3.75% to 4.00% in September and is scheduled to meet again between October 27 and October 28.
Bitcoin’s price fell 0.2% over the past 24 hours. On Stocktwits, the retail sentiment around BTC moved to the ‘extremely bearish’ from ‘bearish’ zone, while chatter around it stayed at ‘low’ levels over the past day.
