- Bitcoin showcases a 15% drop in Q3, contrasting with Nasdaq’s 2% rise, hinting at possible economic perturbations.
- McGlone correlates Bitcoin’s trajectory with Japan’s Nikkei 225 index, suggesting the crypto’s downturn as a cautionary bell.
Deciphering Bitcoin’s Economic Message
Renowned Bloomberg Intelligence senior macro strategist, Mike McGlone, has stirred the waters by interpreting Bitcoin‘s (BTC) recent price fluctuations as harbingers of impending economic disturbances. McGlone, leveraging his substantial following of 60,000 on the X platform, elucidates that Bitcoin’s decoupling from the Nasdaq 100 Stock Index’s upward trajectory might be more than just market dynamics.
To underscore his point, he juxtaposes Bitcoin’s approximately 15% price dip in the third quarter against Nasdaq’s 2% ascent during the same period. Such a disparity, in the opinion of McGlone, isn’t merely about the crypto benchmark’s lag but might be indicative of a looming stock market contraction, especially in a recessionary environment. This sentiment is accentuated by his observation on how low-interest rates, since the financial debacle, have shaped the ascent of risk assets to their present altitudes.
A crucial instrument in McGlone’s analytical arsenal is the federal funds futures rate. This tool captures the collective sentiment of market participants regarding the prospective stance of the official federal funds rate upon a contract’s expiration. Current readings intimate further escalations in the Federal Reserve’s interest rates, adding another layer to McGlone’s prognosis.
The Bitcoin-Nikkei Nexus
Yet another intriguing facet of McGlone’s analysis revolves around the crypto titan’s dance with Japan’s Nikkei 225 index. Historically, Bitcoin and Nikkei have mirrored each other’s moves, forming a quasi-symbiotic rapport. Bitcoin’s recent underperformance, juxtaposed with the Nikkei’s 33-year zenith achieved in June, paves the way for two potential outcomes: either Bitcoin’s slump presages a broader market contagion, or the digital currency might recalibrate, treading the trail blazed by the Nikkei.
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However, McGlone’s propensity leans towards Bitcoin‘s potential as a vanguard, especially when acknowledging the crypto’s adherence to a diminishing 100-week moving average trendline.
In the contemporary market landscape, Bitcoin hovers around the $25,746 mark, marking a slight 0.1% contraction over the past day. While a resurgence to the $31,000 bracket could spell a positive momentum shift, McGlone remains circumspect, attributing the hesitance to sustained fiscal tightening by the Federal Reserve and its global counterparts.
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