Bloomberg Senior Strategist Warns of Volatility in Bitcoin/Gold Crossover

In the current cryptocurrency landscape, an observation made by Mike McGlone, senior strategist at Bloomberg, highlights a worrying dynamic between Bitcoin and gold, and its potential consequences for the S&P 500. This scenario was analyzed following the significant approval of Bitcoin ETFs at seen by the SEC, which initially drove Bitcoin to peaks in the first quarter of the year. However, McGlone pointed out that despite robust flows, Bitcoin has failed to surpass the all-time highs set against gold and the S&P 500 in 2021.

According to McGlone, “S&P 500 – The launch of the US #ETF in January set records for inflows, improving Bitcoin’s status as a leading indicator, and the hangover could have implications for risk assets. It was a near-perfect storm for the benchmark cryptocurrency to reach new highs in 1Q, but #Bitcoin did not exceed the peaks against #gold and the S&P 500 of 2021. Highly volatile and speculative, the crypto traded 24/7 per week, was rising against gold the last time the S&P 500 e-mini future broke above its 50-week moving average in November, but this time the Bitcoin/gold cross is falling.
@BBGIntelligence”

Slumping Bitcoin/Gold Cross vs. S&P 500 – The January US #ETF launches set records for inflows, enhancing Bitcoin’s status as a leading indicator, and the hangover may have implications for risk assets. It was a near-perfect storm for the benchmark crypto to make new highs in 1Q,… pic.twitter.com/0BrCFdMlO8

— Mike McGlone (@mikemcglone11) May 10, 2024

The analysis details that Bitcoin was showing robust performance against gold while S&P 500 e-mini futures surpassed its 50-week moving average in November. However, we are now witnessing a drop in this crossover, directly contrasting with the performance of the S&P 500, which may herald a reversal in the trend of investing in risky assets.

At the time of publication, the price of BTC was quoted at US$61,136.89, up 0.5% in the last 24 hours.

This recent decline is especially notable following Bitcoin’s halving, an event that historically acts as a catalyst for short-term selling. After the fourth halving, the price of Bitcoin fell and stabilized at around US$57,000, the lowest value in the last two months. Since the all-time peak of $73,000 reached in mid-March, Bitcoin has seen a correction of almost 20%.

This outlook reinforces Glassnode’s view that Bitcoin’s current uptrend could be one of the most resilient in history, with corrections being, so far, relatively superficial.

Disclaimer:

The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.