Bloomberg Intelligence analyst Mike McGlone has revealed he believes Bitcoin ($BTC) could be on track for “one of the greatest bull markets in history” based on a number of factors, or crypto could be a “failing experiment in the process of being made redundant.”
According to a series of tweets McGlone shared with his followers on social media, Bitcoin is nearing a “similar drawdown as the 2018 bottom,” which was the end of a year-long bear market that saw the price of the flagship cryptocurrency plunge from around $19,000 to $3,200. McGlone’s analysis was based on data from the Bloomberg Galaxy Crypto Index and the flagship cryptocurrency’s 50- and 100-week moving averages.
The Bloomberg Galaxy Crypto Index, it’s worth noting, is designed to measure the performance of the largest cryptoassets to gauge overall market performance, while moving averages are a technical analysis tool used to identify the trend direction of an asset and determine its support and resistance levels.
Taking the data into account and considering Bitcoin’s risk/reward ratio for investors in the second half of the year, McGlone suggested BTC is either on track for “one of the greatest bull markets in history” as it starts the second half of the year at a “relatively discounted price,” or could be a failing experiment in the process of being made redundant.
As CryptoGlobe reported, Glassnode data has shown that BTC has been moving out of exchanges at the “most aggressive rate in history” as total exchange outflows in June peaked at 151,000 BTC, worth over $3 billion. A lower supply on exchanges could see the cryptocurrency’s price surge f demand suddenly grows.
Notably, these figures come at a time in which the number of active cryptocurrency users at Bank of America has fallen by more than 50% from its peak during the height of the cryptocurrency bull market as cryptocurrency prices plunge and Bitcoin posts its worst quarter in more than a decade.
In his analysis, McGlone noted that the recent sell-off may see the U.S. Federal Reserve act to stop the market from further going down and the economy from entering a deep recession, as he expects the recent interest rate hike of 75 basis points in June could “be the last” if stocks “keep dropping at a similar velocity” as they did in the first half of the year.
Notably, a key indicator shared by cryptocurrency analyst Ali Martinez that has accurately timed previous BTC bear market bottoms in the last two bearish cycles is seemingly suggesting that the cryptocurrency is highly undervalued.
In 2015 Bitcoin’s MVRV index, which is calculated by dividing Market Value by Realized Value, drooped to -56.85% to “mark the end of the bear market.” In December 2018, after Bitcoin’s price plunged from a high near $20,000 to little over $3,000, it dropped to -55.62%.
The analyst added that BTC’s MVRV index has hit -50.09% this cycle in mid-June and is now sitting at -48.23% even with the cryptocurrency’s price below the $20,000 mark.
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