Bitcoin Faces Potential 35% Plunge, Warns Bloomberg Intelligence
Bitcoin’s overnight plunge below $86,000 has sparked fresh warnings from Bloomberg Intelligence, with senior commodity analyst Mike McGlone cautioning that the 7% drop marks only the opening chapter of a deeper bear market correction.
The stark forecast comes as crypto markets reel from their worst monthly decline since February, with exchange volumes collapsing to $1.59 trillion and bitcoin ETFs bleeding $3.48 billion in net outflows during november alone.
McGlone projects Bitcoin could tumble more than 35% from current levels, possibly revisiting the $50,000 threshold last seen in 2024.
His analysis cites normal market reversion, record-setting gold prices, suppressed stock market volatility, and the unlimited supply of competing cryptocurrencies as key factors supporting this bearish outlook.
The immediate catalyst for Bitcoin’s bearish market structure emerged from Tokyo, where mounting speculation around a December rate hike by the Bank of Japan has impacted leveraged positions.
Polymarket bettors now assign a 52% probability to a 25-basis-point increase at the BOJ’s December 18-19 meeting, while bond investors place those odds even higher at 76%.
“Bitcoin dumped cause BOJ put Dec rate hike in play,” BitMEX co-founder Arthur hayes wrote Monday, noting that a USD/JPY rate between 155 and 160 “makes BOJ hawkish.”
The connection runs deeper than surface correlation; conservative estimates peg the yen carry trade at $3.4 trillion, though realistic figures approach $20 trillion.
For three decades, global markets borrowed near-zero Japanese money to fund everything from tech stocks to treasuries to Bitcoin itself.
That era ended last month, whi
Bitcoin Faces Potential Further Decline, Analysts Cite regulatory hurdles and Index Fund Dynamics
December 2, 2023 – bitcoin (BTC) is facing headwinds that could drive its price down further, according to recent analysis. Concerns center around potential regulatory challenges for MicroStrategy, the dynamics of index fund rebalancing, and broader market sentiment.
Farzam Ehsani, an analyst, highlighted the potential impact of index fund methodology. “As index funds are required to adhere to a strict basket-forming methodology, any rule change automatically triggers a review of their holdings, potentially leading to forced sell-offs,” he stated. This could exacerbate downward pressure on Bitcoin’s price.
The market’s trajectory in December and into the New Year is also tied to the outcome of negotiations between MicroStrategy,led by Michael Saylor,and regulators regarding its Bitcoin holdings. A resolution, or lack thereof, could significantly influence investor confidence.
Currently, traders on the prediction market Kalshi have significantly lowered their expectations for a Bitcoin recovery, assigning only a 29% probability [https://kalshi.com/] to the cryptocurrency reaching $100,000 this year.
Ehsani cautioned that continued declines could push Bitcoin to test support levels in the $60,000 to $65,000 range. However, he also noted that major institutional investors might view these levels as attractive buying opportunities. He further warned that “Strategy is a key player in the crypto market, and its potential problems could cause Bitcoin’s price to drop by another 30%.”
Looking ahead, the Bank of Japan’s (BOJ) policy decision on December 18th is being closely watched. A rate hike accompanied by a hawkish stance could potentially propel Bitcoin towards $75,000, while a pause in rate increases might trigger a short squeeze, driving the price back towards $100,000 in the short term.
This analysis builds upon reporting from Cryptonews.com [https://cryptonews.com/news/bloomberg-analysts-warn-bitcoins-slide-below-86k-is-just-the-beginning/], originally reported by Anas Hassan.