Bitcoin (BTC) Price May See Further Declines, But Analyst Scott Melker Is Not Overly Concerned

Analyst Scott Melker and Mike McGlone joined Gareth Soloway for an interview and discussed the recent inflation data and also shed light on Bitcoin's price action.

In an interview with crypto analyst Scott Melker and Mike McGlone, they discussed the recent inflation data and its impact on Bitcoin's price action.

According to Melker, the recent Consumer Price Index (CPI) and inflation data showed a minimal decrease of 0.1%, marking the first decline in four years. While small, this decrease is significant as it raises expectations for a Federal Reserve (FED) rate cut, which in turn led to a substantial selloff in tech stocks. However, Melker believes that this is more likely a market rotation rather than money exiting the market.

Melker also highlighted that Bitcoin has only experienced a 27% correction from its peak, which is typical in previous bull markets where corrections have ranged from 35% to 45%. While acknowledging the possibility of further declines, Melker expressed that he is not overly concerned.

He further elaborated on the importance of Bitcoin getting back above the 200-day moving average to boost confidence. Despite potential short-term volatility, Melker sees mostly positive factors for crypto, including the upcoming election, political support, and the anticipation of the next Bitcoin halving. He also noted that Bitcoin is not strictly following equity market trends and pointed out the importance of patience during slow market periods.

McGlone, who is the Senior Macro Strategist – Bloomberg Intelligence, stated that the market is beginning to realize that the FED can ease monetary policy, with a 100% chance of a rate cut at the September meeting. He believes that the rising unemployment rate could justify this decision, although there is still more data to be considered.

Today's numbers are viewed as noise in the larger macroeconomic picture, where the market had swung too far towards recession last year and too far away from it this year, now finding a balance in the middle.

McGlone added that Bitcoin, considered a leading indicator, had a strong run earlier in the year but is now showing weakness, suggesting a need for a pullback in equities to allow things to settle. In commodities, particularly grains, he sees breakdowns indicating the start of a broader reversion in equities, Bitcoin, and bond yields, with yields following China's trend.

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