Bitcoin (BTC) surged above the $28,000 mark on Monday, but amid the elation of this milestone, concerns loom large in the crypto market. Mike McGlone, Commodity Strategist at Bloomberg, shed light on a disconcerting trend that has cast a shadow over the digital asset realm.
McGlone’s analysis suggests that cryptocurrencies are grappling with the ominous specter of a looming recession, and the weakness observed in the third quarter could be signaling trouble ahead.
His observations highlight a stark reality – cryptocurrencies are currently grappling with the specter of a recession.
Transient Blip Or Ominous Sign For Crypto?
As the third quarter of 2023 drew to a close, the cryptocurrency space exhibited notable weakness, leaving many to ponder whether this was merely a fleeting blip on the road to recovery or a more sinister harbinger of an impending recession.
According to McGlone, the prevailing sentiment among analysts leans towards the latter possibility.
“Crypto weakness in 3Q may be a recovery blip or a recession leaning,” he asserts. “Our bias is the latter, as almost all risk assets gained in 2023 and rolled over into the quarter.”
Positive Beta vs. Negative Liquidity – Cryptos Face Recession: #Crypto weakness in 3Q may be a recovery blip or a #recession leaning. Our bias is the latter, as almost all risk assets gained in 2023 and rolled over into the quarter. Most central banks are still tightening despite… pic.twitter.com/MaaZxhJdWL
— Mike McGlone (@mikemcglone11) October 2, 2023
This sentiment is grounded in the performance of various risk assets throughout the year. While 2023 witnessed gains across a spectrum of investments, the current quarter has brought a downturn that has raised concerns about the broader economic outlook.
Bitcoin retreats to the $27K territory. Chart: TradingView.com
Optimism For Q4: ETF Approvals And Pre-Halving Surge
Amidst these concerns, popular trader and analyst Michaël van de Poppe offers a glimmer of hope for cryptocurrency investors. He believes that October and the entirety of the fourth quarter of 2023 could usher in renewed optimism. Key factors contributing to this optimism are the potential approval of spot Bitcoin exchange-traded funds (ETFs) and the anticipated pre-halving price surge.
“Welcome to Uptober. Welcome to Q4, which is leading towards a great quarter, potentially fueled by ETF approvals and the pre-halving rally,” Poppe enthusiastically conveyed via a tweet.
Should these anticipated events transpire as hoped, Poppe suggests that Bitcoin could see a surge, potentially reaching as high as $40,000 in Q4. This projection implies a remarkable upside of over 40% from its current price.
Welcome to Uptober.
Welcome to Q4, which is leading towards a great quarter, potentially fueled by ETF approvals and the pre-halving rally.
Potentially #Bitcoin to $40,000 is reasonable.
— Michaël van de Poppe (@CryptoMichNL) October 1, 2023
As Bitcoin continues its journey through the volatile cryptocurrency market, the diverging viewpoints of analysts like McGlone and Poppe underscore the uncertainty and complexity of the current economic landscape.
Investors and enthusiasts alike will be watching closely to see whether the digital asset can defy the odds and make a resounding comeback in the face of economic headwinds.
Featured image from iStock