Although the cryptocurrency market is anticipating Bitcoin (BTC) to target a new high of around $150,000, a market strategist is warning that the asset might plunge to $10,000.
This call comes as Bitcoin struggles with volatility, facing challenges in holding onto the $110,000 support.
According to Bloomberg Intelligence senior commodity strategist Mike McGlone, the potential for Bitcoin to drop to $10,000 lies in the fact that it is a risk asset, as he stated in an interview with David Lin, published on September 2.
“Bitcoin added a zero. I think it loses a zero now. Go back to $10,000. That’s not a big deal in terms of Bitcoin’s history, but for people who own it is. The first time we traded
$100,000 was on December 6th. To me, that was a classic sign that you’re supposed to be selling,” McGlone stated.
McGlone noted that Bitcoin has become a clear risk-on asset, with its 48-month correlation to the S&P 500 now at a record high, compared to a negative correlation in 2020. He suggested this shift exposes Bitcoin to broader equity market weakness.
Looking back, McGlone noted that while gold has surged about 30% since December 6, Bitcoin has gained only around 8% over the same period.
The S&P 500 has delivered a similar return to Bitcoin, while the Bloomberg Galaxy Crypto Index has been flat. In his view, this divergence underscores gold’s strength as a defensive asset while cryptocurrencies remain speculative and tied to risk sentiment.
The strategist also observed that August saw the volatility index (VIX) hit its lowest point of the year before rebounding sharply. For McGlone, this reversal marks a potential turning point, with Bitcoin’s recent high likely coinciding with the low in volatility.
Beyond market dynamics, the expert also expressed concern about the expanding universe of cryptocurrencies.
In his view, while Bitcoin’s supply is capped at 21 million coins, the emergence of millions of cryptocurrencies could trigger a sell-off. This oversupply of alternatives, he argued, dilutes Bitcoin’s scarcity narrative that once underpinned bullish long-term projections.
By press time, Bitcoin was trading at $111,094, up 0.8% in the past 24 hours, and had gained nearly 1% on the weekly chart.
The asset is now looking to retain momentum, with $115,000 emerging as the next target.
