- Mike McGlone, senior commodities strategist at Bloomberg Intelligence, said bitcoin is trading at a steep discount.
- McGlone highlights several observations when making his argument, such as technical analysis that focuses on key indicators, such as the 100-week moving average.
- McGlone highlighted the Fed’s pivotal role in stock and cryptocurrency prices.
- Bitcoin is currently trading at $23,203.64, down 66.4% from its all-time high, according to CoinGecko.
Bitcoin and other cryptocurrencies are trading at a steep discount, according to McGlone, senior commodities strategist at Bloomberg Intelligence.
Currently trading nearly 66.4% below its all-time high on Nov. 10 last year, Bitcoin remains one of the most valuable digital assets in the cryptocurrency space in terms of market capitalization.
according to Forbes, McGlone’s observations come from technical analysis focused on specific indicators. McGlone went on to say that Bitcoin’s price has reached the lowest level of its 100-week moving average, describing the currency as “extremely discounted in a prolonged bull market.”
Bloomberg analysts commented that the role of the Fed should not be underestimated.
“Don’t fight the Fed has been my mantra for risk assets since late last year,” McGlone said.
“Bitcoin and cryptocurrencies are a key part of the 2021 boom and therefore part of the 2022 boom, but I see Bitcoin and Ethereum leading the way.”
“In such a world, Bitcoin is on its way to becoming a global digital collateral, and Ethereum is a major driver of the digital revolution, made possible by the most widely traded cryptocurrency, the U.S. dollar token, ‘ McGlone said in Forbes.
Market elasticity is $18,000
Other big names in the industry also got involved, such as Budd White, co-founder of crypto firm Tacen. White’s view is that Bitcoin is not only oversold, it is currently hovering in an accumulation phase.
If you look at Bitcoin’s realized value market value, or MVRV, we see it’s around 1, which indicates that the asset’s market value has dropped to its actual utility value,” White noted. Forbes.
This value comes after massive industry liquidations, such as the collapse of Terra, the 3AC liquidation, and most recently, Elon Musk’s $1 billion sale of Tesla.
White noted that markets appear to be pricing in more aggressive monetary tightening as the numbers surge. This could suggest a decoupling of the cryptocurrency market from stocks, but White did not rule out that Bitcoin could fall further.
“I’m not saying we’re going through a decoupling of bitcoin from stocks. Of course, in terms of bitcoin’s price, we could go down again.”
“But this relative strength tells me that the bulk of the bitcoin sell-off may have been behind. Barring any exogenous shocks to the market – such as a credit market impending collapse – I think investors are still viewing bitcoin as being at these levels A decent buy on the market,” White said.
Bitcoin is in the accumulation phase
Bitcoin is reportedly currently trading at $23,203.64 Coinkkohas been hovering below 25,000 since June, suggesting the digital asset may be in an accumulation phase.
Trading down 66% from its 2021 all-time high, it’s important to note that the decline in stocks and cryptocurrencies may not be clear. There are still macroeconomic and geopolitical pressures that could drive investors further out of crypto assets. Lately, all eyes have been on how the Fed will respond to soaring inflation and a potential recession threat.
However, many experts believe that the “bad news” may have been priced in, and investors will continue to see an uptrend in the near term.