Strategist Warns Crypto Oversupply Could Force $10K Bitcoin Reset

Bitcoin’s explosive rally may have gone too far, with oversupply, rising volatility risk, and shifting macro forces setting the stage for a major reset that could redefine crypto’s next cycle, according to a Bloomberg Intelligence outlook. The warning has intensified as investors weigh in on the growing risks of an overextended market. Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, cited rising issuance, leverage, and speculative participation following a sharp price run-up as key concerns.

McGlone argues that the market is at a turning point. Bitcoin’s failure to hold the $94,000 level and its struggle to maintain the 100-week moving average suggest that the speculative bubble of 2025 may already be deflating. He also highlighted a key correlation between the S&P 500-to-gold ratio and Bitcoin’s price movements, which he compared to the 1929 extreme.

The market is also responding to increased buying pressure from major investors. Recently, Strategy, a corporate Bitcoin investor, purchased 13,627 BTC for $1.25 billion, raising its total holdings to 687,410 BTC. This move pushed its total investment in Bitcoin to $51.8 billion, with an average purchase price of $75,353.

Why Did This Happen?

Mike McGlone attributes the current volatility to broader macroeconomic conditions. He points to the unusual situation where gold has surged rapidly in 2025, yet equity market volatility remains unusually low. Historically, such conditions rarely persist and often precede corrections. The combination of gold surging and low volatility in equities has raised concerns that a reversion to more typical volatility levels is likely in 2026.

Bitcoin’s price has also shown signs of instability. It recently fell below $94,000, a key resistance level, and is now testing support near $90,000. This move aligns with McGlone’s prediction that Bitcoin could revisit the $50,000 support level in 2026 if stock market volatility increases.

How Did Markets React?

The market has shown a mixed response. On one hand, major institutional players continue to accumulate Bitcoin. Strategy’s recent purchase is its largest since last July and has pushed its total holdings above 687,000 BTC, with unrealized profits of nearly $11 billion. This suggests that some long-term holders remain optimistic about Bitcoin’s potential.

On the other hand, short-term traders are showing signs of caution. Bitcoin’s price slipped below $94,000 as ETF outflows returned, signaling increased selling pressure. The cumulative volume delta (CVD) in both spot and perpetual markets declined sharply, indicating stronger sell-side dominance.

What Are Analysts Watching Next?

Analysts are closely monitoring several key indicators. One is Bitcoin’s ability to reclaim the $91,616 (50 EMA) level, which would signal a potential stabilization in the market. Another is the behavior of the S&P 500-to-gold ratio, which could indicate when volatility is likely to normalize.

Gold’s performance remains a key variable in this equation. McGlone cited gold’s rapid rise in 2025 as a warning sign for 2026. If gold continues to outperform, it could indicate a shift in investor sentiment toward traditional safe-haven assets, which may put further pressure on Bitcoin.

Bitcoin’s correlation with the Japanese yen is another factor being closely watched. The two assets have shown a correlation coefficient of 0.86 over the past 90 days, suggesting that Bitcoin is increasingly behaving like a currency derivative rather than an independent asset. This could affect how investors view Bitcoin as part of their diversified portfolios.

As the market moves forward, investors are advised to remain cautious. While some remain bullish on Bitcoin’s long-term potential, the current environment suggests that short-term volatility is likely to persist. The possibility of a retest of the $50,000 support level in 2026 remains a key concern, particularly if macroeconomic conditions shift in ways that increase risk-averse behavior.