Bloomberg Senior Commodity Strategist Mike McGlone believes that Bitcoin has become an important risk appetite indicator amid uncertainty in the Federal Reserve's policy.
Bitcoin as a Risk Sentiment Indicator
According to McGlone, Bitcoin's average price this year is around $100,000, and this level is likely to be tested again in the short term.
Current Market Volatility Situation
The analyst noted that volatility in the market remains low as the crypto market experiences a summer lull. However, he indicates that Bitcoin could pull back towards support levels once the VIX index rises above 20.
Future Expectations for Bitcoin
McGlone also stated, "Even though Bitcoin, the world's most speculative digital asset, has reached new highs, a normalization process is inevitable. There is a risk that Bitcoin will break its support level towards the end of the year." He emphasizes that Bitcoin will remain a leading indicator of risk appetite in the long term against a backdrop of tight Fed monetary policy and global economic weakening.
Bitcoin's role as a risk appetite indicator is expected to strengthen, especially in times of rising market volatility.
