August 17, 2022


TLDR:

  • Mike McGlone, chief commodity strategist at Bloomberg Intelligence, stated that bitcoin trading is at a huge discount.
  • McGlone highlights several observations when making his case, such as technical analysis focusing on key indicators such as the 100-week moving average.
  • McGlone stressed the crucial role of the Federal Reserve in stock and cryptocurrency prices.
  • Bitcoin is currently trading at $2,303.64, according to CoinGecko, down 66.4% from its all-time high.

According to McGlone, chief commodity strategist at Bloomberg Intelligence, Bitcoin and other cryptocurrencies are trading at a huge discount.

Bitcoin is currently trading nearly 66.4% lower than its all-time high on November 10 last year, and remains one of the most valuable digital assets in the crypto space by market cap.

according to ForbesMcGlone’s notes come from technical analysis that focuses on a specific indicator. Bitcoin hit an all-time low against its 100-week moving average, McGlone continues to say, by describing the coin as being “at deep discount within a perpetual bull market.”

The Bloomberg analyst notes that the Fed’s role should not be underestimated.

“Don’t fight the Fed has been my mantra for risky assets since late last year,” McGlone stated.

“Bitcoin and cryptos were a key part of the 2021 rush and therefore part of the 2022 stream, but I see Bitcoin and Ethereum moving forward.”

“Bitcoin is on its way to becoming a global digital security in a world like this, and Ethereum is the primary driver of the digital revolution as evidenced by the availability of the most widely traded cryptocurrency – dollar tokens,” McGlone told Forbes.

The market is resilient at $18,000

Other big names in the industry have influenced this, such as Bud White, co-founder of crypto firm Tacen. White sees Bitcoin as not only oversold, but hovering in an accumulation phase at the moment.

If you look at bitcoin’s market capitalization to realized value, or MVRV, we see it around one, which indicates that the market value of that asset has fallen to its effective interest value,” White noted. Forbes.

This value comes after massive industry liquidations such as the Terra meltdown, 3AC liquidation and also Elon Musk’s recent $1 billion sale of Tesla.

White noted that markets appear to be pricing in a more aggressive monetary tightening as a result of the higher numbers. This may signal a decoupling of the cryptocurrency market from stocks, but White does not rule out that Bitcoin could go down again.

“I am not saying that we are seeing a Bitcoin decoupling from stocks. We could certainly be on our way down in terms of Bitcoin price.”

“But this relative strength tells me that the bulk of the bitcoin sale may be overdue. Barring any external shock to the markets — such as credit markets looking to be on the verge of a crash — I think investors still view bitcoin as a decent buy at these levels.” White said.

Bitcoin is in the accumulating phase

Bitcoin is currently trading at $2,303.64, according to KoenigkuIt has been hovering around 25,000 since June, which indicates that the digital asset may be in its accretion phase.

Trading down 66% from all-time highs in 2021, it is important to note that the decline in stocks and cryptocurrencies may not yet be evident. There are still macroeconomic and geopolitical pressures that could cause investors to back away from crypto assets further. All eyes have been lately on how the Fed will respond to rising inflation and potential recession threats.

However, many experts believe the “bad news” may have already been priced in and investors will continue to see upward movement in the short term.



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