Earlier this week, macrostrategist Mike McGlone warned investors that the cryptocurrency, which outperforms other assets, could plummet if inflation takes hold.
In a tweet on Wednesday, McGlone said he remains cautious about cryptocurrencies due to the deteriorating economic climate.
The strategist wrote that "the deflationary crisis could intensify due to the decline in commodities and bank deposits."
He added that cryptocurrencies could face downside risks if the overall stock market declines.
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“As a result of the 2008 financial crisis, bitcoin is experiencing its first US recession, and if the broader stock market follows the banks, cryptocurrencies will likely rise and fall with the tides,” McGlone wrote.
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“Major indices, technology and 24/7 innovative asset trading – Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH) – could face a wall of resistance at key $30,000 and $2,000,” he added.
At the time of writing, Bitcoin is trading at $28,611, down 3% over the past seven days.
Meanwhile, CoinShares Chief Strategy Officer Meltem Demirros said earlier this week that the main reason behind Bitcoin's price action in recent months is the US banking crisis.
In an interview with Bloomberg Television, Demirros said there were two catalysts that gave Bitcoin a boost. First, investors are regaining their appetite for risk and second, they are anticipating the halving in April next year, when mining rewards will be halved, he said.
On Reading: Analyst Who Predicted Crypto Crash in May 2021 Now Says Bitcoin Should Hit That Price in 2024
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This article Analysts Warn Cryptocurrency Investors Due to Deteriorating Economic Sentiment Originally Appeared on Benzinga.com.