Bitcoin Could Follow Nikkei Path to Record High, Says Analyst

Bloomberg Intelligence’s senior commodity strategist, Mike McGlone, has predicted that the value of bitcoin might “follow the path of the Nikkei, which reached a 33-year high in June.” He highlighted that the biggest crypto “has had a close directional relationship with the Nikkei 225.”

Bitcoin’s ‘Close Directional Relationship’ With Nikkei Index

Mike McGlone, a senior commodity strategist for Bloomberg Intelligence (BI), the analysis arm of Bloomberg, has identified similarities between the Nikkei index and the value of bitcoin.

In the most recent Bloomberg Intelligence report, the commodity strategist explored whether or not the Nikkei index or the Nikkei Stock Average (Nikkei 225), the premier index of Japanese shares, is “a guide for bitcoin or vice versa.” McGlone detailed final week:

Bitcoin has had a detailed directional relationship with the Nikkei 225, and up to date crypto weak point might portend contagion. That or the benchmark crypto may get better and comply with the trail of the Nikkei, which reached a 33-year excessive in June.

“Our bias is to heed the leading-indicator inklings of bitcoin and respect the downward-sloping 100-week moving average,” he added. “Sustaining back above about $31,000 would be an indication of bitcoin recovery strength, but there’s good reason for the downward reversion to continue — the Fed and most central banks are still tightening,” the strategist additional shared.

McGlone additionally identified the likelihood that the Nikkei might monitor bitcoin’s downward trajectory. “Japan’s close proximity to China and our view that the country is like some combination of Ayn Rand’s ‘Atlas Shrugged,’ peak Japan and the Soviet Union over 30 years ago, with deflation implications, may portend the Nikkei following bitcoin lower,” the strategist described.

He additionally defined final Wednesday that the downtrend of bitcoin’s value for the reason that 2021 excessive “may be resuming,” noting that “$30,000 is a key pivot level.” The strategist confused that “Sustaining back above $30,000 would indicate a reversal upward akin to a similar pattern around $12,000,” which occurred within the second quarter of 2020. However, he famous: “A key factor that’s different this time is unfavorable liquidity — most central banks are still tightening and elevating rollover risks in the stock market.”

What do you concentrate on Mike McGlone’s evaluation concerning the value of bitcoin and the Nikkei index? Let us know within the feedback part beneath.