• Bloomberg Intelligence’s Mike McGlone suggests Bitcoin could drop to $10,000 before the year ends due to negative liquidity and the potential long-lasting effects of rising global interest rates.
• While Bitcoin faces bearish sentiments, significant Bitcoin accumulation continues, with the US reportedly adding 10 million in debt.

After a strong start to the month of October 2023, the world’s largest cryptocurrency Bitcoin (BTC) has come under selling pressure amid the rising bond yields. As of press time, Bitcoin (BTC) is trading at $27,445 with a market cap of $535 billion.

Also, a mild response to the launch of the Ethereum futures ETFs has further dented the bullish sentiment in the crypto space. A senior macro strategist at Bloomberg Intelligence, Mike McGlone, has suggested that Bitcoin’s price might drop to as low as $10,000 before the year concludes.

McGlone shared this perspective as he analyzed the current state of Bitcoin as the cryptocurrency market advances into the fourth quarter. He pointed out that Bitcoin could face challenges due to negative liquidity, potentially affecting its price. In his recent post on Twitter, now X, McGlone noted:

Declining Bitcoin Has Preceded Fed Pivots – The bottom line for Bitcoin at the start of 4Q may be that liquidity remains negative, with price implications. Coming of age in a zero interest-rate world, the crypto hangover could be enduring as global rates continue to rise, despite recession signals.

Negative Bitcoin Liquidity Hints Bearishness

The negative Bitcoin liquidity indicator, signaling more sellers than buyers, presents a significant challenge to Bitcoin’s current price, as noted by the Bloomberg analyst. Additionally, Mike McGlone emphasized that Bitcoin saw mainstream adoption during a period of low interest rates, suggesting that as global interest rates rise, the crypto market could face lasting repercussions, even in the absence of signs of an imminent economic downturn.

McGlone’s tweet included a chart illustrating the historical correlation between FED fund futures and liquidity reversals. According to the chart, Bitcoin might need to undergo a decline to align with FED fund futures.

Furthermore, while the US Federal Reserve may not directly involve itself with Bitcoin, McGlone pointed out that Bitcoin’s status as a 24/7-traded asset and a leading indicator could be gaining significance in the financial realm.

Furthermore, the analyst observed that Bitcoin has experienced significant growth in tandem with other high-risk assets in 2023. However, he raised a note of caution, suggesting that this surge might primarily be driven by short-covering.

Ultimately, McGlone emphasized the significance of the $30,000 level as a critical resistance point for Bitcoin, highlighting that there is a prevailing risk of a potential decline to as low as $10,000.

Bitcoin Accumulation Continues

While Bitcoin faces some selling pressure, there’s heavy Bitcoin accumulation happening recently. Popular crypto evangelist Samson Mow stated that investors should be grappling for Bitcoin based on the US government’s recent debt increase.

In recent development, Bitcoin’s pseudonymous founder Satoshi Nakamoto delivered a cryptic message stating that he would further simplify the Bitcoin whitepaper for investors.

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