Senior commodity strategist at Bloomberg Mike McGlone believes that the Bitcoin (BTC) price will recover in the second half of 2022.
McGlone said on Twitter on Wednesday that he sees positive signs in the data of the Bloomberg Galaxy Crypto Index (BGCI) and in the 50- and 100-week moving averages of the BTC price. He believes that the current indicators show similar signs, as in 2018, when the bottom of the bear market was reached. Shortly thereafter, there was a strong recovery in the first half of 2019:
“As the Bloomberg Galaxy Crypto Index is approaching a drawdown similar to the one at the bottom of 2018, and Bitcoin is just as far away from its 50- and 100-week moving averages as in the past fundamentals, the ratio between risk and return in the second half of the year is shifting towards the attentive investors.”
The BCGI is designed to measure the development of the largest cryptocurrency in order to get a general overview of the development of the market as a whole. The moving averages indicate the average price of an asset over a certain period of time, say over 50 or 100 days.
The crypto winter of 2018 was a hard time for BTC, as the price fell from $ 16,000 in January to about $ 3,200 in mid-December, as data from CoinGecko shows. However, after the violent slump, BTC rose again to around $ 13,000 by the end of June.
McGlone further predicts that BTC is either on its way to “one of the largest bull markets in history at a relatively favorable rate at the beginning of the second half of the year” or that these data show that the crypto market is gradually failing and scaring off investors.
“We believe that Bitcoin acceptance is more likely to continue to rise,” he explained.
#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 slump in the first half of the year to the bursting of the Internet bubble between 2002 and 2002, when many companies disappeared from the market. But from this time, current top companies such as Amazon and eBay also emerged.
However, it is difficult to analyze, since this bear market is largely due to the aggressive monetary policy of the US Federal Reserve and interest rate hikes.
In 2022, BTC and the entire crypto market suffered from several macro factors such as the Russian invasion of Ukraine, the global trend towards regulation and unemployment. Failed crypto projects and companies have also severely depressed sentiment.
In this context: Crypto owners may no longer participate in US crypto regulation
On June 5, McGlone stated that if the stock market continues to fall at a “similar rate as in the first half of the year,” the last rate hike by the US Central Bank in June by 75 basis points could be the last this year, as the government wants to avoid a recession. This could lead to an upswing in all asset classes as investors re-enter the market.
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
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