Bitcoin continues to ‘flip-flop’ as its value compared to the S&P 500 remains far from all-time highs.
In his latest analysis in X, Mike McGlone, senior commodities strategist at Bloomberg Intelligence, suggested that the run on risk assets ‘may be over’.
McGlone: Bitcoin suffers an “undercurrent”
Bitcoin has struggled to match its last all-time high in March, but another metric suggests deeper systemic weakness.
BTC/USD, McGlone notes, is currently around 11 times the value of the S&P 500, which is near its all-time highs.
In the first quarter of 2020, Bitcoin was at the top, reaching 15 times the S&P in a record that has never been surpassed. In contrast, the future could see a 50% drop from that point.
‘Is the fastest horse indicating the race is over?’ asked McGlone.
As Cointelegraph reported, that performance also stands out compared to gold as well as the S&P 500. XAU/USD hit new all-time highs of its own this month.
‘Currently at about 11x, the Bitcoin/S&P 500 peak was 15x in 1Q20 and this year's lower high was 14x. The biggest pumping of money in history and US ETF launches in the past tense could suggest an undercurrent, a pendulum swinging back towards 7x Bitcoin/SPX’.
In subsequent interactions, he confirmed his theory that Bitcoin continues to ‘turn around’.
‘The fastest horse in the race could be indicating that the race is over,’ he wrote in response to a question about Bitcoin’s relatively lacklustre performance compared to other risk assets.
BTC price risks ‘lower low’ despite rally to USD 60,000
BTC price action, meanwhile, continued to hover around USD 60,000 before Wall Street opened on 28 August, according to data from Cointelegraph Markets Pro and TradingView.
After a rapid cascade of liquidations overnight, BTC/USD recorded a revisit to USD 58,000 before halting its slide.
‘There is still no break in the trend,’ determined popular trader Crypto Chase on the day, referring to a multi-month consolidation phase after the March highs.
‘The upside to all this consolidation is that a break in the trend should be a clear signal towards all-time highs. The not so positive side is that a lower low could be next (although I would see it as a buying opportunity/should be the bottom before all-time highs)’.
