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Bloomberg’s senior commodity analyst, Mike McGlone, is putting his bets on Bitcoin’s $20,000 range to act as the new price floor, similar to what $5,000 has represented in the past.
According to the analyst, based on a series of moving averages, the flagship cryptocurrency is coming close historically “too-cold” price levels, based on a series of moving averages. He said:
“$20,000 Bitcoin may be the new $5,000 – The fundamental case of early days for global Bitcoin adoption vs. diminishing supply may prevail as the price approaches typically too-cold levels. It makes sense that one of the best-performing assets in history would decline in [the first half of 2022].”
During the previous crypto cycle, the $5,000 price mark served as a consistent support level for Bitcoin for a year’s time.
Although market sentiment is currently shattered, McGlone describes Bitcoin’s crash as “typical,” and explain the context in which this has taken place, alongside rising volatility in other traditional asset classes.
“Bitcoin Adulting vs. Spiking Stock, Bond, Commodity Volatility – Bitcoin appears to be in the midst of a typical drawdown, notably vs. historically extreme spikes in commodity prices and bond yields, rapidly reverting equities and the most aggressive Fed in about 30 years.”
The Bloomberg expert had previously expressed bullish optimism on Bitcoin future outlook and said BTC would explode along with gold and US bonds during what he refers to as a “great reversion”. He noted:
“I think what’s going to happen is the great reversion. It’s just getting started. It might be like the aftermath of 1929, [but] I think it’s going to be like the aftermath of 2008 [or] maybe like after the 1987 crash. It’s so overdue, and all risk assets, everywhere from condos in Miami and Toronto to the stock market. It’s just starting to happen and the greatest inflation in 40 years and most people’s lifetime is starting that.”
McGlone’s latest observation is that the week ahead could be another one we all like to avoid. He said:
“Down over 10% on Saturday, Bitcoin pointing to a big risk asset decline week. Feds 75 bps hike may be the last, risk asset deflation doing the tightening for them. 1929ish – aggressive rate hikes despite plunging stock market, global GDP and consumer sentiment.”