A crypto analyst believes that Bitcoin remains a very risk-on asset that is linked to the shifts in the macroeconomic landscape.
Emily Nicolle, a crypto reporter for Bloomberg, gave her take on Bitcoin as the firstborn cryptocurrency plunged 13% and entered bear territory. This might have been due to macroeconomic uncertainty and political factors.
‘Very Risk-On Asset’
Nicolle said in a Bloomberg TV interview that the current movement in Bitcoin is highly correlated with the changes in the macroeconomic landscape, adding that anything that happens on Wall Street could affect the cryptocurrency.
The crypto reporter explained that investors can never discount the impact of the macroenvironment on Bitcoin, saying, “Everything that’s happening to stocks that knocks on crypto too.”
Nicolle described Bitcoin as “very risk-on assets.” “So, when there’s turmoil happening in the S&P 500, you’re going to see that in Bitcoin as well. And so that is definitely catapulting this,” she added.
The analyst added that aside from the macroeconomic environment, the cryptocurrency sector went through a rough period. “We’ve had a 1. 5 billion hack last week. We’ve had some turmoil in terms of what’s going on in politics as well,” she continued.
Only a little over a week ago, the cryptocurrency faced a setback after a North Korean-based hacker group stole an estimated $1.5 billion worth of crypto from Bybit, which could be the largest cryptocurrency hacking in history.
“In terms of what people are expecting to see going forward, it’s still very much up in the air as to how Bitcoin could perform even in, even today,” Nicolle said in the interview.
Political Uncertainty
Nicolle also noted that political uncertainty is another factor driving Bitcoin into bearish territory. United States President Donald Trump vowed to establish clearer regulations on cryptocurrency, but these have not been met.
“Some of the things that Trump promised to do on the campaign trail have not yet come to force and those are the kind of catalysts that we’re looking to as potential upsides for Bitcoin in the weeks ahead, things like a strategic Bitcoin reserve,” she explained.
The crypto analyst pointed out that the macroenvironment is weighing very heavily on Bitcoin’s potential. “If we don’t get any movement on that, if things don’t start to look up elsewhere, Bitcoin will continue to be down,” she predicted.
Closely Watching The $70k Mark
Nicolle said that crypto traders are closely watching the $70,000 mark, which is the crucial psychological and technical support zone.
“We’re all looking at about the $70,000 mark at the minute. So, if it does continue to go down, which is kind of to be expected in the current environment, then that is the next point at which we’re going to be starting to think. That is where a lot of the risk is happening,” she explained.
The analyst described Bitcoin as the “tide that lifts all boats” so when it goes up, other cryptocurrencies also go up too. “But those smaller cryptocurrencies are hit harder when there’s tumult in markets. They are just much more volatile by comparison,” she added.
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