As May 2026 drew to a close, the S&P 500 reached unprecedented levels, marking a stark contrast with significant declines in the cryptocurrency sector. This divergence caught the attention of Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, who emphasized the emergence of a robust sell signal. Bloomberg Intelligence is renowned for offering comprehensive research and insights into financial markets.
Where is the Crypto Market Headed?
McGlone pointed out that cryptocurrencies are embarking on a potential deflationary spiral. This trend may result in Bitcoin retracing to its historical average around $10,000. He suggests that the long-standing correlation between Bitcoin and equities is showing signs of weakening, posing a risk of a more significant market correction.
“The longstanding relationship between Bitcoin and equities has weakened,” McGlone noted, explaining how this increases the risk of a deeper market correction.
Bitcoin has long been perceived as a high-risk asset, mirroring movements in global liquidity and equities. However, indications suggest that this linkage is now dwindling. On May 29, the Bloomberg Galaxy Crypto Index—a vital indicator in the crypto space—registered a valuation below 2,000, halving its value from its peak in 2025.
Could Bitcoin Repeat Its 2018 Struggles?
Drawing parallels with the 2018 market downturn, McGlone noted Bitcoin’s prolonged losses at that time, with support emerging around $3,000. In today’s landscape, however, Bitcoin exists alongside a vast spectrum of digital currencies, leading to increased market pressure. The report observes that U.S. dollar-backed stablecoins have managed to retain their roles more effectively during the recent volatility.
Nevertheless, some industry voices criticize McGlone’s perspective, labeling it as excessively mechanical. They argue that past bearish forecasts from McGlone didn’t materialize and accuse him of overlooking changes in market dynamics and new investment influxes.
How ETF Expansions Impact Bitcoin’s Floor?
A substantial challenge to the projected $10,000 outlook is the institutional support created by the advent of spot Bitcoin ETFs from major players like BlackRock and Fidelity. Unlike past cycles such as 2018, these ETFs inject billions into the market, offering a foundation and mitigating potential declines.
Furthermore, the dip in the Bloomberg Galaxy Crypto Index largely reflects the weakness of speculative altcoins. Historically, Bitcoin’s dominance tends to rise amid market disruptions, suggesting the index’s sharp fall doesn’t necessarily imply a similar drop for Bitcoin.
– Michael McGlone warns of serious risks as Bitcoin’s correlation with equities weakens.
– Bitcoin ETFs by BlackRock and Fidelity introduce substantial market support.
– New market dynamics and stablecoin roles sustain cryptocurrency structure amid volatility.
However, McGlone’s predictions are not set in stone. He identifies $75,000 as a pivotal level for Bitcoin; surpassing and sustaining this price could negate the bearish predictions, turning the divergence from the S&P 500 into mere market noise rather than a structural shift.
