Analysts Warn Dogecoin And Bitcoin May Face Significant Declines

Mike McGlone, a commodity strategist at Bloomberg Intelligence, stated that Dogecoin (DOGE) may face bearish pressure due to similarities with historical market bubbles. In X, McGlone compared the current situation of the cryptocurrency market to major financial collapses, including the stock market crash of 1929 and the dot-com bubble of 2000. He argued that speculative assets like Dogecoin are at risk of quickly reversing in price, similar to high-risk investments in the past that lost value suddenly.

McGlone emphasizes the similarity between the price behavior of Bitcoin and the collapse of the Nasdaq 100 index in 2000. This index fell from 4,700 points to 800 points after reaching its peak, a pattern he believes Bitcoin could replicate.

At the beginning of this month, McGlone predicted that Bitcoin could fall to $10,000, citing the similarities between today's risky assets and the overpriced tech stocks of the dot-com era. He noted that the gold-to-Bitcoin price ratio currently reflects the price volatility of Dogecoin, implying that both assets could decrease if investors shift their money to gold. Dogecoin has become a frequent topic of speculation. McGlone's analysis aligns with his broader view that cryptocurrencies exhibit characteristics of a market bubble. He argues that investors may exit positions in Dogecoin and Bitcoin during times of uncertainty, favoring traditional safe-haven assets like gold. Cathie Wood, CEO of Ark Invest, has recently reduced the company's holdings in Meta stock. Although this is not directly related to cryptocurrency, this move reflects a broader trend of investors adjusting their portfolios amid concerns over overvalued risk assets. Wood's decision underscores caution in a market where speculative investments are surging.

McGlone's warning came as Bitcoin traded near $26,000, down from its peak of over $60,000 in 2021. Dogecoin remains below its 2021 high of $0.74, currently priced at nearly $0.06. Historical data shows that assets linked to speculative frenzies often experience sharp corrections, as seen in the Nasdaq crash of 2000.