Bitcoin Price Analysis: Bloomberg Strategist Warns of Deeper Correction Below $88k

VADODARA, January 2, 2026 — Bitcoin's current trading position relative to its 50-week moving average suggests the cryptocurrency has not yet reached its historical market bottom, according to analysis from Bloomberg Intelligence senior macro strategist Mike McGlone. This daily crypto analysis examines the technical implications of McGlone's assessment that Bitcoin trades at only a 13% discount to its 50-week moving average, compared to the 55% discount typically observed at market bottoms.

Market Context & Background

Market structure suggests Bitcoin's current correction phase mirrors historical patterns where significant price declines precede sustained bullish momentum. According to on-chain data from Glassnode, previous Bitcoin cycles have demonstrated that bottoms form after extended periods of capitulation, often coinciding with extreme deviations from long-term moving averages. The current 13% discount to the 50-week moving average represents a shallow correction compared to previous cycles, including the 2018-2019 bear market where discounts exceeded 60%. Underlying this trend is the persistent macroeconomic pressure from Federal Reserve policy, with the Fed Funds Rate remaining elevated above 5%, creating headwinds for risk assets. Related developments include recent Bitcoin short liquidations exceeding $19 million as price tested the $88,000 support level.

What Happened?

On January 2, 2026, Mike McGlone of Bloomberg Intelligence published analysis on X indicating Bitcoin's current price position relative to its 50-week moving average does not align with historical bottom formation patterns. According to the official Bloomberg Intelligence report referenced in McGlone's social media post, Bitcoin trades at approximately a 13% discount to its 50-week moving average. McGlone noted that historical market bottoms have typically formed when the price reached discounts of around 55% to this key technical indicator. This analysis suggests potential for further price declines before establishing a sustainable foundation for the next bullish phase. The assessment comes amid broader market uncertainty, with other assets like XRP showing unusual dominance on Upbit during periods of global market fear.

Technical Analysis & Price Action

Technical analysis of Bitcoin's current position reveals several critical levels. The 50-week moving average currently sits near $102,000, creating a significant Fair Value Gap (FVG) between current price and this long-term trend indicator. Volume Profile analysis indicates weak accumulation at current levels, suggesting insufficient buyer interest to establish a durable bottom. Market structure suggests the $88,820 level represents immediate support, but order block analysis shows stronger liquidity clusters near $82,000, aligning with the 0.618 Fibonacci retracement level from the 2024-2025 rally. The Relative Strength Index (RSI) on weekly charts reads 42, indicating neither oversold nor overbought conditions, leaving room for further downside. Bullish Invalidation Level: $82,000 (break below suggests acceleration toward 55% discount target). Bearish Invalidation Level: $95,000 (sustained break above would invalidate deeper correction thesis).

By The Numbers

Why It Matters

This analysis matters significantly for both institutional and retail market participants. For institutions, the potential for further decline suggests delayed entry points for large-scale accumulation, potentially impacting ETF flows and corporate treasury strategies. According to data from the U.S. Securities and Exchange Commission's EDGAR database, institutional Bitcoin holdings have shown increased volatility during similar technical setups. For retail traders, the warning indicates heightened risk of further drawdowns, necessitating careful position sizing and stop-loss management. The broader cryptocurrency ecosystem faces contagion risk, with altcoins typically experiencing amplified declines during Bitcoin corrections. Consequently, projects like APENFT's rebranding to AINFT and AEON's payment integration on OKX's X Layer face challenging adoption environments amid potential market weakness.

Community Sentiment

Market analysts on social media platforms express divided views regarding McGlone's assessment. Some quantitative traders point to on-chain metrics like MVRV ratio and SOPR data suggesting oversold conditions may develop sooner than moving average analysis indicates. Others highlight the unprecedented nature of current market conditions, with Bitcoin's institutional adoption through spot ETFs creating different dynamics than previous cycles. The dominant sentiment among technical analysts acknowledges the historical precedent McGlone cites but questions whether post-ETF market structure alters traditional bottom formation patterns. No prominent industry figures have publicly countered the analysis, suggesting cautious acceptance of the potential for further downside.

Price Prediction / Future Outlook

Bullish Case: If Bitcoin establishes support at the current $88,820 level and begins reclaiming the 50-week moving average, the next resistance cluster appears at $95,000. A sustained break above this level could trigger a gamma squeeze as options dealers hedge short gamma positions, potentially propelling price toward $105,000. This scenario requires either rapid macroeconomic improvement or unexpected institutional buying pressure exceeding current forecasts.

Bearish Case: If McGlone's historical analysis proves accurate, Bitcoin may decline toward a 55% discount to its 50-week moving average, targeting approximately $46,000. More immediately, breakdown below $82,000 Fibonacci support would confirm bearish momentum, with subsequent targets at $75,000 (previous cycle high) and $68,000 (2025 consolidation zone). This scenario aligns with continued Federal Reserve hawkishness and deteriorating risk asset sentiment globally.