Mike McGlone, senior commodity strategist at Bloomberg Intelligence, has warned that bitcoin could experience a substantial price pullback to $10,000 if the S&P 500 declines by 20%, driven by expected Federal Reserve interest rate hikes and elevated stock valuations.
McGlone identified three factors that could pressure bitcoin lower: resistance at the $80,000 level, Federal Funds futures pricing in 0.70% in rate hikes over the next year, and the S&P 500's valuation relative to its 200-week moving average. The analyst characterized bitcoin as highly volatile and speculative, noting that its performance over the last five years roughly matched the S&P 500 but with volatility three times higher.
According to McGlone's analysis, bitcoin qualifies as what he terms a "stock puppet"—an asset deeply correlated with equities that would decline in a market pullback. He grouped bitcoin in this category alongside gold, precious metals, and bond yields, arguing these assets would fall given current stretched valuations in public company stocks.
McGlone suggested bitcoin could serve as a leading indicator for broader risk-asset declines. He noted that bitcoin recently achieved strong August performance, with prices rising nearly 25%, but maintained that sustaining further gains would require the cryptocurrency to demonstrate "divergent strength" independent of stock market movements.
