Bloomberg Analyst Says Bitcoin Just Traded Steepest Discount Ever – Here’s How BTC Could Reverse Its Course

Bloomberg Intelligence Senior Commodity Analyst Mike McGlone says the cryptocurrency market crash recently reached extreme levels.

McGlone says Bitcoin (BTC) recently traded at its steepest discount since the crypto icon’s 200-week moving average began calculating.

“Bitcoin’s sharpest September 20 selloff since 200-week moving average could be calculated shows the extremes of the crypto crash and the risk versus reward for shorts versus the potential resumption of the elongated uptrend.”

Aggressive rate hikes by the US Federal Reserve offer a “good reason” for Bitcoin to reverse the downward trend, according to the Bloomberg Intelligence strategist.

“Our graphic [below] shows good reason to support one of the best-performing assets in history – the Federal Reserve’s aggressive rate hikes – but it’s all about the endgame. At around 4.3%, one-year federal funds futures (FF13) have never fallen faster than their 200-week moving average.”

Source: mikemcglone11/Twitter

The federal funds futures contract is a derivative based on short-term interest rates as set by the Federal Reserve. Investors use the derivative to bet or hedge against short-term interest rate fluctuations.

Regarding the correlation of the crypto market with stocks, McGlone says that Bitcoin and other crypto assets could determine the bottom of the stock market.

“Bitcoin is gaining ground as the world’s leading 24/7 risk asset and leading index that never stops trading. It’s a risky year, and crypto may be a harbinger of how low the stock market can go. The rapid decline in stocks is the main force in reversing expectations of rate hikes.

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Featured image: Shutterstock/Zaleman

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