Crypto Price Decline: The Cause Revealed by Analyst
Mike McGlone, senior macro strategist at Bloomberg Intelligence, has suggested that the US Federal Reserve’s (Fed) hawkish inflation-curbing strategy is the primary factor causing downward pressure on cryptocurrency prices. Writing in his latest analysis of digital assets, McGlone advised investors to seek insurance against asset devaluation, adding that the recent rebound in digital assets could leave them vulnerable to future price downturns. McGlone warned that the crypto bear market is far from over, noting that crypto assets and equities have yet to reach their lowest point. He also said the stock market, including crypto, is highly susceptible to recession risks, which increased along with the continued monetary tightening by the Fed. The analyst suggested that cryptocurrencies have not yet found their bottom, as the Fed prepares for its next basis point (bps) in interest rate hikes in March; the latter would determine whether cryptocurrencies can sustain their pivot levels. Low CPI data in March could improve market sentiment, leading to an increase in crypto and stock prices. However, if the inflation index is high, investor sentiment may plummet, causing significant price declines across the market.
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