Bitcoin (BTC) is more likely to reclaim its $60,000 resistance than decline below its current support of $30,000 to hit $20,000, according to Bloomberg senior strategist Mike McGlone. Eric Balchunas, Bloomberg’s senior ETF analyst, shared McGlone’s projection and his analysis of the pioneer cryptocurrency through a screenshot on Friday, which shows Bitcoin’s ongoing price activity being compared to the 2018-2019 “consolidation period.” Bloomberg Senior Strategist Predicts Bitcoin Will Touch $60K McGlone’s latest projection takes into account a “too cold” period in 2018 when Bitcoin was consolidating at $4,000 after a crash that wiped out more than 80% of its value. However, that phase was followed by a surprising rally in 2019 that took BTC to $14,000 in the market. In McGlone’s view, if you go by present indications, it’s probable that Bitcoin, which has been consolidating at nearly $30,000 since May, could repeat history and hit its previous resistance of $60,000. “The more tactical-trading-oriented bears seem to proliferate when Bitcoin sustains at about 30% threshold below its 20-week moving average, allowing the buy-and-hold types time to accumulate,” McGlone noted. An Overview of Bitcoin’s Different Moving Averages To understand whether the primary cryptocurrency’s price activity is largely bullish or bearish, one can look into three moving averages: the 20-week exponential moving average (20-week EMA), the 50-week simple moving average (50-week SMA), and the 200-week simple moving average (200-week SMA). In a typical bullish run, BTC prices hover above the three averages, whereas in a bear market prices decline below the 20-week EMA and 50-week SMA. The 200-week SMA marks the last point of resistance against a bear market. Data from TradingView highlights that BTC has fallen below the 200-week SMA twice until now. And each time it breached that mark, it rebounded sharply in a rally. In 2018, the currency bottomed out the indicator and later surged to $14,000. Similarly, Bitcoin trended near the indicator during the pandemic-led crash in 2020. However, its price jumped from a low of $3,858 to as much as $65,000 later on. The digital currency is now witnessing its third decline below the 200-week SMA. It has already dropped lower than the 20-week EMA trendline and is targeting the 50-week SMA next. Should it fall any steeper and trade closer to the 200-week SMA, the price could hit $14,000. Although, McGlone opines that Bitcoin could see an early recovery owing to China’s cryptocurrency ban. China’s Economy to Plateau Post Crypto Ban The Chinese government restricted crypto trading and mining in May, which led to an exodus of Bitcoin miners who looked to other countries to resume activities. Predictably, BTC prices suffered as a result and recorded a downturn. As per McGlone’s assessment, the rejection of open-source software crypto-assets by China could backfire on its economic ascent in the future. In a tweet posted on Friday, the strategist indicated that dollar-pegged digital assets like Tether would rival digital yuan in terms of demand. In an index cited by McGlone, Tether (USDT) was shown swelling in volumes and capitalization. Also, the logarithmic scale of market cap fluctuation between the USDT and the Chinese yuan was lower than the baseline zero in 2018 and 2020. This means the Yuan was diminishing against the US dollar. And even if it rises in the future, it will still be dominated by Tether, whose market capitalization has grown by more than 40% over the baseline, McGlone believes. Notably, not everyone shares McGlone’s beliefs about the Chinese economy. For instance, Yuriy Mazur of CEX.IO Broker thinks that the demand for digital assets will have no impact on the country’s growth. “The Chinese government is too smart to miss out on something the world deems valuable, so, expect them to take considerable measures to roll out a Yuan-backed cryptocurrency (in the future) that they have complete control over,” Mazur told a media outlet.
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