As Bitcoin (BTC) bulls fight hard to continue their New Year’s rally, one expert is sounding the alarm.
So far, 2023 has seen a sensational recovery from the depths of December.
BTC has gained +31% since the beginning of the year in price dynamics, which has revived the markets. Many crypto influencers on Twitter were quick to mark this as the end of crypto winter.
The warning bells come from none other than Mike McGlone, the “man behind the dashboard.” An expert known for introducing Bitcoin to the financial media in recent years.
McGlone is a former head of research and strategy at ETF Securities who became a senior macro strategist at Bloomberg.
Bitcoin (BTC) can be reversed
Making his point on Twitter, the leading analyst presented his thesis that risk assets are not out of the woods yet.
Concerns about macroeconomic sentiment around risky assets like cryptocurrency are at the heart of McGlone’s forecast, he explained.
“The major risk asset options in Q1 appear to be rebounding from the bear market or bottoming out,” McGlone said.
“Bitcoin May Flip – Benchmark Crypto Pulls Back from Resistance as Key Headwinds Remain.”
Indeed, the dynamics of Bitcoin prices in February were difficult. A pullback from the hard resistance at $24,000 saw the price drop to local support at $21,750.
However, while the bulls are trying to consolidate gains here, things are not looking good. The chart structure is entering a scary head and shoulders pattern.
Can the Fed Explain Bitcoin’s February Resistance?
McGlone’s analysis suggests that these price dynamics are caused by constant headwind pressure from the US Federal Reserve.
“Expectations of rate hikes as indicated by Federal Reserve Funds [у 1 кварталі]… but the main difference is that the markets are lower than last year.”
“Don’t fight the Fed,” he added.
Indeed, fears of a rate hike have gripped the market since late 2021 – so far things have been steady.
However, markets in 2023 were reassured by Jerome Powell’s unexpected dovish sentiment.
This gave a much-needed boost to bitcoin confidence, helped by the bullish S&P 500 index.
What is clear is that Bitcoin is currently on a collision course with its 200-day MA. If it doesn’t bounce off support soon, things are going to be tough.
One potential driver of price changes could be today’s statistics released by the Fed. BTC markets remain ready to trade based on CPI data released at 13:30 UTC.
Markets estimate prices to be up 6.2% year-over-year, and the base estimate is up 5.5% year-over-year.
