At $23,000, Bitcoin is currently encountering psychological obstacles. The technical chart shows that a strong bullish scenario is developing as the price of bitcoin is approaching a golden cross. Since the start of 2023, Bitcoin and the larger cryptocurrency market have seen significant gains, rising by more than 40%. At the time of writing, the coin is trading at $439 billion, with a price of $22,789 per unit.
However, a new comparison of Bitcoin to Nasdaq 100 by the senior macro strategist at Bloomberg Intelligence, Mike McGlone shows that cryptos could be facing their first real recession that could lead to lower asset prices and higher volatility. The Intelligence pointed out that if the United States has a recession this year, Bitcoin could have a 70% correction downturn.
Comparing Bitcoin to Nasdaq 100
The chance that the Fed may boost interest rates more aggressively in the future is increased by the recent explosion in US employment. It will be interesting to see how the price structure for bitcoin develops in the future. The invention of Bitcoin happened during the final US financial session of 2008.
Bitcoin is still a very volatile asset class, even though its fundamental purpose is to act as a rival to the currency system. In light of the likelihood that Bitcoin will experience its first significant financial downturn this year, the question is how much suffering remains before long-term benefits resume.
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Mike McGlone makes this comparison between Bitcoin and the Nasdaq 100 Index because historically, there has been a strong correlation between the two. Bloomberg Intelligence compares Nasdaq 100 with its 200-week moving average and its performance over the last two recessions.
Nasdaq bottomed at 70% below the mean during the 2022 market meltdown. Similar to this, it was trading during the 2009 recession at a 40% discount from the norm. Therefore, if the Bitcoin price goes to show a similar resemblance, there’s a possibility that it can tank sub $10,000 levels.
