Bloomberg Analyst Says $31,000 Critical for Bitcoin, Shares Index He Follows

Bitcoin, the world’s largest cryptocurrency, has been in a downward trend for a while and is trading at $25,864 at the time of writing this article.

One of the factors that may be affecting Bitcoin’s price movements is its correlation with Japan’s leading stock market index, the Nikkei 225.

Bitcoin and the Nikkei have had a close directional relationship in recent months, and weakness in the crypto market could point to a potential crisis impact for Japanese stocks, according to Bloomberg senior commodity strategist Mike McGlone.

McGlone explained that Bitcoin could recover and follow the path of the Nikkei, which reached a 33-year high in June, or it could continue its downward spiral and pull the Nikkei lower.

He said his inclination is to listen to Bitcoin’s leading indicator signs and pay attention to the downward-sloping 100-week moving average. He added that holding above around $31,000 would be an indication of Bitcoin’s strength in recovery, but there is good reason for the downward turn to continue as the Fed and most central banks are still tightening.

McGlone also suggested that Japan’s proximity to China and its economic difficulties could cause the Nikkei to fall, following Bitcoin. He described Japan as “a combination of Ayn Rand’s ‘Atlas Shrugged’ with the deflationary consequences of peak Japan and the Soviet Union 30 years ago.” He implied that Japan’s recession and isolation could have negative effects on stock market performance.

*This is not investment advice.