Bloomberg commodity strategist Mike McGlone believes that there is a possibility of a major correction on US markets, which could slash the prices of Bitcoin (BTC), stocks and oil.
McGlone, in a social media post, says that the US is equipped with a “self correcting mechanism”, which may be used to counter President Trump’s trade war. This could cause market chaos.
Analyst shares chart that shows the S&P500 vs. Gold ratio, as well as the S&P500 vs. the GDP ratio, are at high levels. This is a configuration that historically has been associated with stock market crashes such those in the 1930s and late 1990s.
McGlone says that such an event or “reversion” could cause significant falls in bonds, stocks, Bitcoin oil and copper.
The self-correction mechanism of America is invincible. If the unprecedented austerity and tariffs don’t succeed, there will be pushback in the next election. The great rebalancing attempt could change the foundations of the world order for the next century if it succeeds.
It is the largest discombobulation in the last 100 years between the US stock market capitalization and GDP of other countries.
Base case for reversion to HTML0
– A 50% drop in US stocks
– 40 dollars a barrel of crude oil
– $3 per pound of copper
– US 10-year Yield
$10,000 Bitcoin and 90% Drawdowns on Most Cryptocurrencies
“$4,000 Gold, The Outlier Due to Not Being Simple Reversion”
McGlone may have predicted severe drawdowns, but the analyst believes that based on history the size of potential downward moves are “normal”.
Bitcoin currently trades for $85,529.
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Sources of Images include Pixabay Creative Commons & Midjourney
As new information becomes available, this post Bloomberg Analyst predicts massive but historically ‘normal’ market crashes for Bitcoin Oil and Stock Market could be updated.
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