Bitcoin Could Bounce Back This Year, According to Bloomberg's McGlon
McGlon of Bloomberg says that a rise in the price of Bitcoins (BTC) is possible this year, as he sees the same signs of late 2018 at the bottom.
Bloomberg's senior commodity strategist Mike McGlone is forecasting that Bitcoin (BTC) will rise in the second half (2H) of 2022.
On July 6, McGlone tweeted his thoughts to his 48,100 Twitter followers after reviewing the data from Bloomberg's Galaxy Crypto Index (BGCI) and BTC's 50-week and 100-week moving averages. He suggested that the current indicators are showing similar signs to the bottom of the bear market in 2018, which preceded a strong rebound in the first half of 2019.
“With the Bloomberg Galaxy Crypto Index nearing a similar drawdown as the 2018 bottom and Bitcoin’s discount to its 50- and 100-week moving averages similar to past foundations, risk vs. reward is tilting toward responsive investors in 2H.”
The BCGI is used to track the performance of the largest crypto assets and determine a general view of market performance. Moving averages indicate the average price of an asset over a period, such as 50 or 100 days.
The price of BTC fell from $16,000 in January to around $3,200 in mid-December following the Crypto Winter of 2018. Following the carnage, however, BTC went on to pump to around $13,000 by late June.
McGlone predicts in a follow-up post that BTC is either on the way to "one of the greatest bull markets in history at a relatively discounted price to start 2H" or that data is indicating that the crypto market is starting to fail and scare away investors.
"Bitcoin adoption is likely to continue growing," he said.
#Bitcoin could be one of the greatest bull markets in history at a relatively discounted price to start 2H. Or the crypto may be a failing experiment in the process of being made redundant, like #crudeoil. Our bias is Bitcoin adoption is more likely to continue rising pic.twitter.com/qtLRR6isXF— Mike McGlone (@mikemcglone11) July 6, 2022
McGlone compared the downturn in 1H to the "2000-02's bursting Internet bubble", which saw many companies fail but also allowed for Amazon and eBay to thrive.
The bearish market conditions are largely a response to the U.S. Federal Reserve's hawkish monetary policy and inflation reel-in attempts, which have been accomplished through a series of interest rate hikes.
In 2022, BTC and the overall crypto market suffered from macro factors such as the Russian invasion of Ukraine, global regulation, and rising unemployment. Crypto projects and companies collapsing has made the market sentiment even more bearish.
McGlone said that if the stock market keeps falling at a "similar velocity" as in the first half of 2019, the latest interest rate hike from the Fed, which occurred in June, could be the last one of this year. If this happens, investors will return to investing in assets and there will be a rebound across all classes.
If stocks keep dropping at a similar velocity as in 1H, the June 75 bps hike may be the last. https://t.co/zHtLfuYoZg— Mike McGlone (@mikemcglone11) July 4, 2022