Top Analyst Warns of a Major Bitcoin Price Drop

Mike McGlone warns Bitcoin could drop to $10K due to weakening demand and market shifts, signaling potential downside.

Mike McGlone, a senior analyst at Bloomberg Intelligence, has issued a cautionary warning about Bitcoin’s price potential. 

According to McGlone, Bitcoin could revisit the $10,000 range due to weakening demand drivers and changes in market structure. His analysis highlights how shifts in capital flows and ownership concentration could increase downside pressure on Bitcoin’s price.

Bitcoin’s Past Price Rallies and Current Concerns

McGlone pointed out that Bitcoin’s past rallies were largely driven by early accumulation phases. 

Large institutional buyers, such as Michael Saylor, entered the market early, absorbing available supply. This type of buying pushed Bitcoin’s price upward without requiring continuous new inflows. 

However, as these accumulation phases ended, price support weakened, leaving Bitcoin vulnerable to declines.

He further explained that, as Bitcoin’s price rose, more late-stage buyers entered the market, purchasing at increasingly higher levels. These buyers did not necessarily create new demand but rather followed the price momentum. 

McGlone emphasized that this type of buying activity could be reversed if the market faces selling pressure, leading to significant price corrections.

Bitcoin’s most recent price surge also benefited from the approval of spot Bitcoin exchange-traded funds (ETFs). The approval allowed traditional investors to access Bitcoin through regulated financial products. 

However, McGlone suggests that this inflow has started to slow down, reducing the price support that Bitcoin once enjoyed.

Market Shifts and Capital Fragmentation

McGlone highlighted changes in the broader cryptocurrency market that could affect Bitcoin’s price. The market has expanded significantly, with over 28 million crypto assets now tracked by CoinMarketCap.

Bitcoin, which once stood alone as the primary asset, now competes with thousands of other cryptocurrencies for investor capital. This fragmentation has resulted in a shift in how capital is allocated, with less focus on BTC.

According to McGlone, this shift in capital allocation is comparable to the stock market before the 2007 financial crisis. 

During that period, prices remained high despite tightening conditions, but when there were no new buyers to replace those selling, prices began to fall. McGlone suggests that Bitcoin is now facing a similar situation, where the lack of new buyers could trigger a price decline.

The reduced capital inflow and fragmented market could lead to increased selling pressure. 

As funds are spread across many assets, there is less concentrated support for Bitcoin’s price. McGlone believes this could create a situation where Bitcoin struggles to find new buyers at current price levels.

Related Reading: BTC Tests Critical $83K Level – Break Could Spark Selloff

The Role of Large Bitcoin Holders

A significant portion of Bitcoin’s supply remains in the hands of early investors, including corporate entities like MicroStrategy. 

McGlone noted that MicroStrategy currently holds around 671,268 BTC, with an average purchase price of approximately $74,978. While this significant holding helped support BTC’s price in the past, McGlone believes it no longer has the same impact.

He explained that, since these large holdings have already been purchased, they cannot serve as new buying support. 

Furthermore, many of the early holders have unrealized profits, which could turn into selling pressure if the market experiences a downturn. This potential selling activity could put additional downward pressure on Bitcoin’s price.

McGlone’s outlook is based on supply and demand dynamics, rather than emotional or ideological factors. He emphasized that the current state of Bitcoin’s market suggests a possible reset to the $10,000 level. 

If demand continues to weaken and selling pressure increases, this price level could become a reality once again.