Recession Ahead? Bitcoin and Dogecoin Rally Could Be a Trap, Warns Bloomberg’s McGlone

Mike McGlone, Bloomberg Intelligence's Senior Commodity Strategist, has observed a potentially concerning trend. He's noted a striking similarity in the price movements of Bitcoin (relative to gold) and Dogecoin.

This isn't merely a visual coincidence; McGlone interprets it as a bearish indicator.

Divergent Assets, Convergent Paths

Bitcoin and Dogecoin appear vastly different: one considered "digital gold," the other a meme-based cryptocurrency. However, McGlone's analysis reveals remarkably similar price trajectories over the past year.

Both experienced sharp rises in late 2023, peaking early in 2024. Subsequently, both have declined and fluctuated, exhibiting a synchronized pattern.

Currently, both the Bitcoin-to-gold ratio and Dogecoin's price rest on a long-term upward trendline, providing apparent support.

Yet, McGlone remains skeptical, viewing this support as temporary, not indicative of a new bull market, but rather a brief respite within a prolonged bear market.

Recessionary Headwinds

McGlone's bearish outlook is primarily driven by concerns about the U.S. economy. While a recession was anticipated in 2023 but failed to materialize, he believes it's merely been delayed, not averted.

He anticipates a future recession will negatively impact risky assets like Bitcoin and Dogecoin, leading to significant price drops.

In essence, McGlone cautions against interpreting the recent price bounce as bullish. He suggests it's likely a temporary reprieve preceding further price declines.

Dogecoin and Bitcoin Price Update

Dogecoin experienced a near 10% surge in the past 24 hours, trading around $0.1827. It's aiming for $0.1885, but must first overcome resistance at $0.186. The 4-hour Relative Strength Index (RSI) exceeding 83 suggests the coin is overbought, hinting at a potential short-term correction.

Bitcoin also demonstrates strength, surpassing $94,000 with a nearly 6% increase in the last 24 hours.