How Bitcoin is guiding the next recession, strategist explains 

Among them is the U.S. stock markets capitalization-to-GDP ratio, which has climbed to levels not seen in about a century, underscoring historically stretched valuations.

Meanwhile, 180-day volatility in both the S&P 500 and the Nasdaq 100 has dropped to its lowest point in roughly eight years, a condition that often precedes sharp market repricing.

Bitcoin relationship with stocks

His outlook was accompanied by an analysis reinforcing the tight relationship between Bitcoin and U.S. equities. By dividing Bitcoins price by 10 for comparison, the cryptocurrency is trading at roughly the same level as the S&P 500 on February 13, with both hovering just below the 7,000 mark.

The alignment highlights Bitcoins continued role as a high-beta proxy for broader risk appetite. If equities struggle to hold that threshold, McGlone sees little reason for a more volatile, beta-dependent asset such as Bitcoin to remain elevated.

Meanwhile, a reversion toward the S&P 500s five-year moving average near 5,600 would represent a logical initial normalization.

Such a move would correspond to approximately $56,000 for Bitcoin under the same comparative framework.

Beyond that, McGlones broader base case envisions the possibility of Bitcoin ultimately reverting toward $10,000 in the event of a confirmed U.S. stock market peak.

In this context, levels such as 7,000 on the S&P 500 or 50,000 on the Dow are unlikely to mark durable tops without wider consequences.

If equities roll over from these elevated levels, Bitcoins amplified swings could act as a leading indicator of tightening financial conditions and recession risk.

For McGlone, the current crypto downturn may not be an isolated collapse but rather the first visible crack in an overstretched risk-asset cycle.