BTC’s price may be ready for a positive rebound this year, as per Mike McGlon, senior commodity analyst at Bloomberg, as the market displays characteristics of the market’s bottom in 2018.
Mike McGlone, the senior commodity strategist at Bloomberg, expects an increase in the price of Bitcoin (BTC) in the second half (2H) of 2022.
McGlone expressed his views with his 48,100 Twitter followers on Wednesday, noting that the Bloomberg Galaxy Crypto Index (BGCI) and the 50-week and 100-week moving averages of the price of BTC indicated favorable trends. He claimed that the current indications are displaying symptoms that were also present at the bear market’s bottom in 2018, which occurred before a robust comeback 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 developed to monitor the efficiency of the most significant crypto assets in order to have a broad sense of the market’s performance as a whole. The average price of an asset over a specified period of time, such as 50 or 100 days, is calculated via moving averages.
According to data from CoinGecko, the crypto winter of 2018 was challenging for BTC as the price dropped precipitously from the $16,000 region in January to a market low of about $3,200 by mid-December. But after the destruction, BTC continued to rise, reaching nearly $13,000 by late June.
“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 crude oil. Our bias is Bitcoin adoption is more likely to continue rising,” Mike McGlon said on Twitter.
McGlone related the washout in 1H to the “bursting Internet bubble” of 2000–2002, which forced many businesses to fail but also unlocked the way for the development of well-known corporations like Amazon and eBay.
However, the truth that the negative conditions have mostly been a reaction to the United States Federal Reserve’s hawkish monetary policy and trying to reel in inflation through a series of interest rate hikes hangs over the research.
In 2022, macro forces, including the Russian invasion of Ukraine, worldwide legislation, and unemployment rates, hurt BTC and the entire crypto sector. However, the fall of cryptocurrency projects and businesses has made attitudes even more pessimistic.
On June 5, McGlone said that as the government tries to prevent a recession, the next interest rate hike from the Fed of 75 basis points in June could be the last one of the year if the stock market continues to shrink at a “similar pace as in 1H.” As investors return to the market; as a result, asset classes may experience a bounce.