Many predictions about Bitcoin (BTC) and the broader crypto ecosystem are already falling apart, with the combined crypto market capitalization falling 3.80% to $1.03 trillion. This drop is driven by Bitcoin (BTC) and the current fear in the market has prompted the bears to sell their holdings fearing a further fall.
In the face of current realities, Mike McGlone, Senior Macro Strategist at Bloomberg Intelligence, shared another take on the current trend. It is not known if bitcoin has reached a long-awaited low, and the coin will need to rebuild the $25,000 resistance level to resume the resurgence of the risky asset, according to a market strategist.
#Bitcoin may need to break $25,000 for a resurgence in risky assets. In case #cryptocurrency and #stock market do not decline, tactical short positions in bitcoin/crypto may be justified in early March. Monetary policy operates with a long variable lag. A year ago, the Fed funds rate was zero pic.twitter.com/mGYbt4gAxr
— Mike McGlone (@mikemcglone11) March 2, 2023
The analyst pointed to the subtle correlation that bitcoin and the cryptocurrency market have with the stock market, and he noted that if the stock market hasn’t bottomed yet, we may see more short crypto positions around early March.
The momentum in the futures market is even more erratic, with up to $245 million in total sell-offs in the market following the current market rout. For McGlone, the dynamics largely depend on the Fed’s stance on monetary policy.
General Impact of Bitcoin Volatility
When it comes to the current structure of the crypto ecosystem, bitcoin determines the overall direction of the market despite its diminished dominance.
Altcoins are also in a downtrend right now, with Ethereum (ETH) down 4.43% to $1,572.72.
Cardano (ADA), Solana (SOL) and Avalanche (AVAX) were also down 4.86%, 4% and 4.95% respectively at the time of writing. The major altcoins may not stay bottoms for long, given that most of them have very positive fundamentals that generally boost their momentum.