Mike McGlone, Senior Commodity Strategist at Bloomberg, predicts a rise in the price of Bitcoin in the second half of 2022.
On 6 July, McGlone tweeted his observations, noting that the Bloomberg Galaxy Crypto Index (BGCI) and the 50-week and 100-week moving averages for BTC showed encouraging trends. He asserted that the current indicators resemble those from the bear market’s bottom in 2018, which came before a robust recovery 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 towards responsive investors in 2H.”
Like the Internet Bubble?
McGlone drew a parallel between the current state of the cryptocurrency market and the Internet boom of the early 2000s. According to the expert, a similar cycle is in play, one where overvalued projects are removed from the market before the market reverses course and resumes its long-term upward trend.
To have a comprehensive understanding of the market’s performance as a whole, the BCGI is designed to evaluate the performance of the most significant crypto-assets. Moving averages are used to calculate the average price of an asset over a certain period, such as 50 or 100 days.
Bitcoin has lost too much
According to data from CryptoCompare, the world’s largest cryptocurrency has lost over 58% of its value in the second quarter of 2022. From $45,524 at the beginning of Q2, Bitcoin dropped to a little under $19,000 on the last day of June.
Since losing 68.2% of its value in the third quarter of 2011, this was Bitcoin’s worst quarterly performance. According to data from CoinMetrics, June was its worst month since it first became available on exchanges in 2010, when it peaked.
These low numbers have made many crypto-analysts skeptical about Bitcoin. Some expect more bearish trends coming soon.
Mohnish Pabrai, a pupil of financial guru Warren Buffett, took a shot at cryptocurrencies during all the market turbulence.
Despite the market carnage, he cautioned that Bitcoin and altcoins are still facing their worst days. He warned cryptocurrency investors in an interview with CNBC that the value of their holdings in digital assets would “erode to nothing over time.”
Many industry analysts believe that Bitcoin has not yet reached its bottom and predict that over the next few weeks or months, its prices will fall considerably more. According to Edward Moya, the extent of the decline in cryptocurrency prices would depend on “if the stock market hit a bottom and if no significant crypto company slips into liquidation.”
Several variables, including escalating geopolitical unrest and changes in U.S. monetary policy, will fuel increased short-term volatility.