Bitcoin at a Crossroads After Rejection at the $28,000 Level

Bitcoin prices are now at a crossroads after being rejected at the $28,000 level.

BTCUSD: Daily Chart

BTCUSD: Daily Chart

The price of BTC hit $28,500 this week and has fallen under the last daily high for a potential double top. The next few sessions will be important for the crypto world.

Mike McGlone, commodity strategist at Bloomberg, wrote on social media Platform X to express his concerns about the crypto sector. McGlone talked of “positive beta vs. negative liquidity” and its implications for the crypto market. The macro strategist said that the weakness seen in the third quarter of 2023 could be a temporary blip in the recovery or a sign of a coming recession.

According to McGlone, the latter scenario is more likely due to the fact that risk assets were gained in 2023. The analyst also drew attention to the policy of central banks worldwide, saying that many are tightening despite signs of contraction, such as in Europe.

McGlone also noted the property crisis in China, which may carry deflationary effects, although we would argue that the Chinese government’s timid stimulus shows that there is a much larger floor under property than assumed.

Bitcoin’s recent rally has outperformed the general sector with a rise in its dominance from 50.4%, up from 49.9% the previous week.

All eyes on the crypto market over the last two months have been on the upcoming Blackrock ETF application, but the SEC regulators have used the government shutdown excuse to delay the decision.

“I’m hearing through the grapevine that Gary Gensler is preparing for his next move because he knows he won’t be around for a long time,” said TheStreet Crypto’s George Tung. “What is his next move? To approve bitcoin spot ETFs for big daddy, which is BlackRock, and then he’s going to get a nice, cushy job at BlackRock afterward,” he said.

Although it is speculation, it is clear that the SEC is dragging its heels. There is also no near-term stimulus from other news, and surging yields don’t help the situation. Bitcoin needs to get back above the $27,700 level, or a further decline may be in place.

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