Bitcoin (CRYPTO: BTC) trades within the $60,000-$70,000 range as commodity analyst Mike McGlone warns gold’s rally is over and predicts both gold and Bitcoin will languish for potentially a decade after their historic runs.
The Gold Reversal Call
McGlone argues gold’s significant rally is finished after making multi-decade highs.
Gold peaked at $5,600 before crashing 27% to $4,100, marking what he calls the end of an era that began in 1997.
“The rally to me is over,” McGlone said. “Gold’s going to languish between $3,000 and $5,000 potentially for a decade. That’s just the way it always does.”
He points to extreme positioning as evidence. Gold’s 180-day volatility moved to 2.5 times that of the S&P 500 (NYSE:SPY), a ratio that has only occurred a few times in history.
When it does, gold shifts from a safe haven to a highly speculative risk asset and puts in a peak.
The Bitcoin Warning
McGlone extends the same analysis to Bitcoin, arguing that the significant rally that lasted over a decade is finished.
“Bitcoin warned us,” he said, noting that Bitcoin’s outperformance stopped after the big money printing in 2020.
“Bitcoin and gold warned us,” McGlone continued. “Now crude oil’s spike creates a perfect catalyst. This is 9/11, 2008, and 2022 all in one. The stock market’s most expensive in history.”
He recommends staying out of the market, sticking with treasuries, and waiting for opportunities. “I don’t think we’ve reached decent discounts yet,” he said.
The Deflationary Argument
McGlone sees a deflationary environment ahead despite oil above $100 per barrel.
He notes that December crude oil futures trade at $77, suggesting the market expects oil to fall dramatically from current levels.
“Crude oil brings on global recessions, pumps up supply, curtails demand, and rinses and repeats,” McGlone explained.
He pointed to natural gas down 22% year-to-date after spiking 100% in January as evidence.
Dave Weisberger, CEO of CoinRoutes and co-host of the Markets Daily podcast, countered by highlighting the unprecedented fiscal backdrop.
“None of those market wizards lived in a world with 8-10% growth in budget deficits in peacetime,” he argued. The U.S. faces $12 trillion in debt to refinance this year, including the deficit and maturing treasuries.
The Range-Bound Reality
Bitcoin continues trading within a tight range despite the macro chaos.
Analysts noted the cryptocurrency has stayed within $1,000 of current levels for the past three weeks, showing remarkably low volatility compared to oil and gold.
James Lavish, managing partner at the Bitcoin Opportunity Fund, pointed out that leverage has been dramatically reduced in the market.
“I haven’t heard a squeak about buying the dip in crypto,” he said. “Non-Bitcoin crypto has been horrendous.”
Image: Shutterstock
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