Bitcoin could behave like Treasury bonds and gold, rather than stocks during a market recovery, Bloomberg Intelligence's report suggests.
Bloomberg Intelligence's August Crypto Outlook report suggests that Bitcoin (BTC) may start behaving more like US Treasury bonds and gold rather than stocks. Senior commodity strategist Mike McGlone and senior market structure analyst Jamie Coutts compared Bitcoin markets to those of gold, bonds, and oil in a report, according to Cointelegraph. The authors hypothesized that macroeconomic influences, such as the monetary policy of the Federal Reserve, led to similarities in the Treasury bond and Bitcoin markets:
“Tightening markets and plunging global growth support the Federal Reserve's shift to a ‘meeting by meeting’ bias in July, which may help pivot Bitcoin towards a directional tilt more like US Treasury bonds than stocks.”
The analysts also added that the dump-following-pump nature of commodities and declining bond yields suggest that bonds, gold, and Bitcoin are more likely to be supported as inflation declines.
The report notes that the cryptocurrency markets achieved the largest discount compared to the 100-week moving average in July. Analysts wrote: “abnormal for Bitcoin to hold much below its 200-week moving average.” The analysts said that the fact that BTC was 70% below its peak at the start of August but still five times higher than its March 2020 low “shows its potential.”
In the report, the $20,000 zone is marked as key support and analysts expect a base is building similar to the $5,000 level in 2018-19. The researchers concluded that Bitcoin has been one of the best performing assets since its inception about a decade ago.
“We think more of the same is ahead, particularly as it may be transitioning towards global collateral, with results more aligned with Treasury bonds or gold.”
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