Bloomberg predicts the rise and fall of the digital currency market

The tightening of the Fed’s policy will be a prerequisite for the leading players in the crypto market to reach new highs. But after that, we should expect a protracted fall, according to Bloomberg Intelligence analyst Mike McGlone.

According to the expert, BTC and ETH rates will begin to rise against the backdrop of the continued fall in the US stock market. The analyst believes that the Solana project will also join the leading digital assets in this case.

McGlone stressed that a sharper correction in the stock market would force the Fed to change its mind about tightening monetary policy. This can cause bullish runs in high-risk assets such as digital currencies.

“Right now, I see cryptocurrencies as a safe haven. The Fed will continue its policy until the stock market — the number one indicator — falls enough to force the Fed to pause. That’s when I think we’ll see the rise of Bitcoin, Ethereum, and possibly Solana. They will bypass other assets, as they did before,” McGlone is confident.

He draws attention to the fact that the futures rate on government funds, indicating the attitude of market participants to the value of Fed bonds at the end of the contract, may be a “bottom indicator” for the crypto industry. When investors pass the extreme point of no confidence in federal funds futures, market sentiment could change, McGlone said.

“If you want a good downside indicator for bitcoin and altcoins, then these are Fed funds futures. This is what the market expects from the Fed in a year. Right now, it’s priced at 3%, maybe more, and the actual rate is 1%. As soon as this forward expectation starts to decrease, I think that Bitcoin will hit the bottom,” said the analyst.

On May 4, the price of the main crypto coin reached $39,100. Given that, at the end of the previous day, the bitcoin rate fell to $37,500. In about 12 hours, BTC has risen in price by $1,600 or 4%.

Do you agree with the Bloomberg analyst’s forecast?