Strategist Sees Bitcoin Bear Signals, Warns Crypto Bust Could Push BTC to $10K

Bitcoin may be entering a bear phase as Bloomberg’s strategist warns rising volatility and tighter equity correlation are fueling fears of a broader crypto bust, even as bitcoin is currently rising. He points to Blackrock’s IBIT alongside tightening liquidity conditions, signaling risks of deeper and more sustained losses

Key Takeaways:

• Bitcoin faces bear signals as Bloomberg’s strategist flags high correlation with equities.
• Forecast sees $BTC dropping toward $10K as liquidity conditions tighten further.
• Crypto markets risk a broader bust as McGlone cautions excess supply pressures valuations.

Bitcoin Slides Into Bear Territory as Strategist Highlights Crypto Bust Dynamics

Elevated volatility and rising correlation with equities are undermining bitcoin’s diversification appeal, signaling mounting pressure across crypto markets. Bloomberg Intelligence senior commodity strategist Mike McGlone analyzed these trends on April 12, focusing on Blackrock’s Ishares Bitcoin Trust ETF (IBIT) and its performance since launch. The findings suggest weakening risk-adjusted returns amid broader market integration, raising questions about institutional expectations tied to exchange-traded fund adoption.

McGlone stated on social media platform X:

“The crypto bear market may be in its early days if performance since bitcoin ETFs began trading in January 2024 is a guide.”

His accompanying chart compares IBIT with the State Street SPDR S&P 500 ETF Trust (SPY), highlighting relative performance differences following the launch of spot bitcoin exchange-traded funds. The comparison underscores McGlone’s broader argument that bitcoin exposure has not delivered sufficient risk-adjusted returns despite increased institutional access. However, broader 2026 data indicates IBIT has returned approximately +54% since launch, outperforming the S&P 500’s +42% gain, suggesting absolute returns have remained competitive even as volatility stays elevated.

The data further reveals elevated volatility alongside closer alignment with equities. McGlone explained: “What’s notable is roughly the same bitcoin-to-beta total return came with about 4x the volatility, and the 200-day correlation near 0.5. High volatility and correlation, absent superior returns, typically top the list of things to avoid in proper diversification.” This implies bitcoin-linked exposure has delivered comparable returns to broader markets but with significantly higher volatility, while the correlation near 0.5 reflects reduced diversification benefits. As a result, bitcoin appears to be trading more like a high beta risk asset rather than a traditional hedge, particularly during periods of macro uncertainty.

Bloomberg Strategist McGlone’s chart showing potential bitcoin, crypto bear market.

Despite recent declines from the 2025 peak near $126,000, bitcoin trades around $71,883 as of this writing and has gained roughly 5.6% over the past two weeks, indicating consolidation rather than a confirmed bear phase. The chart further shows IBIT price swings from peaks above 60 to lows near 30, reinforcing unstable performance. Short-term downside pressure also coincided with a broader macro shock tied to a U.S. naval blockade in the Strait of Hormuz, which impacted global risk assets, including equities and crypto.

Bitcoin Valuation Reset Risks Deepen Amid Liquidity Shift

McGlone’s long-standing $10,000 $BTC projection is based on a mean reversion model that views the post-2020 surge as a liquidity-driven anomaly, with the pre-pandemic range acting as a fundamental anchor supported by futures era pricing trends. He also points to a “lop off a zero” reset from prior six-figure expectations and highlights dilution from millions of competing tokens, comparing current conditions to the dot-com unwind. As correlation with equities rises, he argues bitcoin’s weak diversification profile may shift capital toward gold and U.S. Treasuries, particularly in a deflationary cycle where traditional safe havens outperform, reinforcing the case for a broader valuation reset amid tightening financial conditions.

Despite this outlook, bitcoin remains well above previously identified breakdown levels, supported by reduced post-halving supply of 450 $BTC per day, exchange reserves near a 10-year low of 2.1 million coins, and more than $54 billion held within IBIT, signaling stronger structural demand than earlier market cycles.

The strategist maintained a bearish outlook, concluding:

“My bias is the crypto bust may be just beginning. There was one in 2009 — bitcoin — and now there are millions, most tracking little of substance yet still valued in the billions. Bitcoin may revisit $10,000, especially if beta declines.”

His view reflects concerns about excess token supply, fragile valuations, and tightening liquidity. While institutional infrastructure continues to expand, current metrics suggest the asset class remains vulnerable to broader financial market cycles and shifting investor risk tolerance.

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