December has started poorly for the cryptocurrency market. Bitcoin (BTC) and altcoins have experienced a sharp decline in the last 24 hours due to macroeconomic factors.
While some analysts stated that this decline could continue even further, one of them was Bloomberg Intelligence strategist Mike McGlone.
Sharing from the X account, the Bloomberg analyst stated that Bitcoin may face additional correction pressure in the medium term.
At this point, McGlone said Bitcoin could fall to $50,000, while the Bitcoin-to-gold ratio could drop from the current 20-fold to as low as 13-fold.
McGlone added that Bloomberg Economics' model shows that the Bitcoin-to-gold ratio was around 20 times as of December 1, but its fair value was closer to 13 times.
He stated that the main reason that will affect this decline is the 120-day volatility of the S&P 500.
McGlone noted that the S&P 500's 120-day volatility is heading toward its lowest year-end level since 2017, noting that such low stock market volatility is a factor that increases corrective risk in risky assets.
McGlone stated that low stock market volatility at this point indicates that risky assets may decline further, and argued that Bitcoin will likely be the pioneer.
Analyst's Key Predictions
Bitcoin's price could retest the $50,000 level. The Bitcoin/gold ratio could also face pressure to pull back to around 13x from the current 20x level.
The main factor driving the rate down is the S&P 500's 120-day volatility, which is approaching its lowest year-end level since 2017.
Historical Context and Previous Warnings
As you may recall, McGlone stated that the market was structurally weakening towards the end of November and claimed that Bitcoin could experience a comeback and the price could drop to $10,000.
McGlone argued that the current structure reminded him of the great crash of 2018, and stated that Bitcoin could fall to the $10,000 level again if the pressure on risky assets continues.