Falling Bitcoin ‘Might Suggest Deflation’

According to Mike McGlone, senior commodity strategist at Bloomberg, falling Bitcoin and crude oil prices could be a sign of deflation. 

McGlone has predicted that oil prices could potentially reach $60 per barrel in the U.S. 

Deflation is a decrease in prices driven by low demand and waning economic momentum. 

McGlone has predicted that the S&P 500 index might also potentially drop to its 200-day moving average since he believes that it might be overdue for a correction. 

The S&P 500 has suffered its worst sell-off of the year so far, plunging by nearly 2% during the Tuesday trading session. The index is down by nearly 5% over the past month. 

Bitcoin is currently trading at $81,812 after plunging by more than 10% over the past 24 hours alone. Despite being named as part of the much-talked-about cryptocurrency reserve, Solana (SOL) has also plunged by a whopping 16%.  

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Roughly $1 billion worth of crypto has been liquidated over the past 24 hours, according to CoinGlass data. 

Meanwhile, gold, the go-to “safe haven” asset for investors could potentially surge to $3,000 amid economic turmoil, according to McGlone.  

Earlier this week, McGlone predicted that Bitcoin might struggle to find a floor against gold “until around 21x” due to various headwinds for risk assets. 

The US economy is currently experiencing a very sharp slowdown, with some analysts predicting a recession. The Atlanta Fed’s GDPNow model, a real-time economic indicator, shows that the U.S. economy is on track to shrink by almost 3% in the first quarter of the year.