Bitcoin Faces Intense Pressure as Economic Concerns Mount

Bitcoin (BTC) $111,035, the largest cryptocurrency, is experiencing significant pressure due to global recession fears, high interest rates, and escalating trade wars. While long-term investor interest remains, BTC struggles to surpass the $85,000 mark. At the time of writing, the Bitcoin price is hovering around $84,596, representing a 22% drop from its all-time high of approximately $109,000 earlier this year. There is a renewed discussion about a potential collapse following the decline in Bitcoin’s momentum.

Macroeconomic Threats Shake Bitcoin

Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, highlighted that the global economic outlook poses serious threats to Bitcoin. According to McGlone, if a significant correction occurs in the U.S. stock market, especially if the S&P 500 index drops to the 4,000 level, Bitcoin could plummet to as low as $10,000. This scenario would imply a return to Bitcoin’s pre-pandemic average values.

The slowdown in global growth, along with declines in Chinese bonds and oil prices, increases the likelihood of deflation. Coupled with the negative impact of high interest rates on investor sentiment, pressure on the cryptocurrency market intensifies. McGlone noted that U.S. stock markets appear completely detached from the country’s economy, a mismatch historically observed before the crises of 1929 in the U.S. and 1989 in Japan.

Bitcoin and Stocks Diverge

Historically, Bitcoin has moved in tandem with risky assets, but it has loosened this correlation in recent months. While gold rises, both Bitcoin and stocks are trending downward. This shift indicates that investors are beginning to view cryptocurrency ETFs as high-risk investments rather than safe havens.

The gold/silver ratio exceeding 100 also raises concerns in the market. Historically, similar ratios have been observed just before global economic recessions. McGlone suggests that Bitcoin’s fundamental indicators imply that its price should be below $17,000, arguing that the current price is overvalued under present conditions.

However, commentators from Altcoin Daily express cautious optimism regarding Bitcoin. They suggest that should a severe recession occur, Bitcoin might drop to $20,000, but such a drastic scenario would require breaking below the $69,000 level, which currently acts as a strong support point.

Experts believe that particularly the expansive monetary policies of central banks outside the U.S. and increasing global liquidity may limit declines. The fact that Bitcoin has not tested its previous lows despite the recent S&P correction further supports this view. Analysts assert that Bitcoin remains robust, and investors have not yet entered panic mode.