Bitcoin (BTC) has recorded a notable recovery breaching the $27,000 mark again, leading to increased speculation that the asset is positioning itself for significant gains in the coming weeks.
However, despite Bitcoin’s overall strong recovery in 2023, Bloomberg senior commodity strategist Mike McGlone has stated that the worst might not be over for the flagship digital asset. In his June Cryptos Outlook posted on LinkedIn on June 2, the strategist argued that various factors suggest a bumpy road for the digital asset.
He suggested that Bitcoin and cryptocurrencies find themselves at a critical juncture as they encounter the possibility of the first United States recession in their history, a potential stock bear market, and increased scrutiny from central banks.
“Cryptos face their first US recession, a potential stock bear market, vigilant central banks, and high interest-rate competition, and they’ve bounced in 2023, indicating consensus thinks the worst is over. We disagree,” he said.
McGlone asserted that the massive liquidity injection experienced in recent years, culminating in Bitcoin’s peak in 2021, exemplifies the speculative excesses that have characterized the crypto market. In his view, these excesses are indicative of ongoing risks.
He further highlighted deflationary signals such as plunging commodity prices, declining producer prices, and reduced bank deposits, which he believes foreshadow the potential impact of Federal Reserve tightening measures.
Bitcoin reclaims $27,000
Bitcoin regained the $27,000 threshold, driven by encouraging employment data from the United States. Specifically, May saw the US unemployment rate surpass expectations, reaching 3.7% compared to the projected 3.5%.
Although the labor force participation rate remained unchanged, this marked the highest level of joblessness since October 2022. The formidable American economy displayed its strength by adding 339,000 jobs in May.
Indeed, as reported by Finbold, Bitcoin is looking to retest key channels that would likely open room for $28,000. Market participants view the $28,000 position as a critical support level for reclaiming $30,000.
Bitcoin price analysis
Bitcoin was trading at $27,152 by press time, with weekly gains of approximately 1.6%. The reclaiming of the $27,000 position has ignited a sense of optimism and speculation regarding the future trajectory of the maiden cryptocurrency.
Moreover, when examining the one-day technical analysis of Bitcoin retrieved from TradingView, the neutral sentiment dominates the asset. The summary of one-day gauges and oscillators indicates a ‘neutral’ sentiment, with a score of 9 and 8, respectively. The moving averages, on the other hand, lean towards a ‘sell’ signal, scoring 7.
In addition to deriving support from a robust labor market, it is essential to acknowledge that lingering concerns about inflation continue to threaten the asset’s trajectory.
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