The price of Bitcoin may “follow the path of the Nikkei, which reached a 33-year high in June,” according to Bloomberg Intelligence’s senior commodity strategist, Mike McGlone.

He added that the world’s largest cryptocurrency by market capitalisation “has had a close directional relationship with the Nikkei 225.”

The senior commodity strategist has identified a series of parallels between the price of Bitcoin and the Nikkei index, Bitcoin.com reports.

As part of the latest Bloomberg Intelligence report, McGlone looked into whether the Nikkei index or the Nikkei Stock Average (Nikkei 225) is “a guide for Bitcoin or vice versa.”

The commodity strategist commented: “Bitcoin has had a close directional relationship with the Nikkei 225, and recent crypto weakness may portend contagion. That or the benchmark crypto might recover and follow the path of the Nikkei, which reached a 33-year high in June.”

He went on to add: “Our bias is to heed the leading-indicator inklings of Bitcoin and respect the downward-sloping 100-week moving average. Sustaining back above about $31,000 would be an indication of Bitcoin recovery strength, but there’s good reason for the downward reversion to continue — the Fed and most central banks are still tightening.”

McGlone also stressed the likelihood of the Nikkei tracking Bitcoin’s downward direction of travel: “Japan’s close proximity to China and our view that the country is like some combination of Ayn Rand’s ‘Atlas Shrugged,’ peak Japan and the Soviet Union over 30 years ago, with deflation implications, may portend the Nikkei following Bitcoin lower,” he stated.

In regard to Bitcoin’s price downtrend since the 2021 high, he said that “$30,000 is a key pivot level. Sustaining back above $30,000 would indicate a reversal upward akin to a similar pattern around $12,000,” which occurred in Q2 2020.

However, he added: “A key factor that’s different this time is unfavourable liquidity — most central banks are still tightening and elevating rollover risks in the stock market.”