Is Bitcoin for $ 20k the same as Bitcoin for $ 3ki 2018?
(Kitco News) While many are discussing the length of this Bitcoin bear market, Bloomberg Intelligence compared the current $ 20,000 level to the $ 3,000 level back in 2018.
Over the past week, Bitcoin has stabilized somewhat, holding just over $ 20,000 on Monday, down 70% from the $ 69,000 record in November.
And despite a real risk that prices will fall even lower again, Bloomberg Intelligence compares the current opportunity of $ 20,000 with other historical price bases.
“Bitcoin at $ 20,000 can be seen as $ 2 in 2011, $ 200 in 2015 and $ 3,000 in 2018. Bitcoin and Ether risk targets fall relative to equities, and the potential for US regulation (Lummis-Gillibrand cryptocurrency) shows mainstream maturation,” Bloomberg said. Intelligence senior commodity strategist Mike McGlone. “The significance of about $ 2 in 2011, $ 200 in 2015 and $ 3,000 in 2018, is that they were Bitcoin base-building levels when they reached a similar discount as its 50-week moving average as at the start of 2H.”
It is not surprising to see Bitcoin plunge so dramatically in the second quarter of this year as the Federal Reserve embarked on the most aggressive tightening since 1994, McGlone noted in its mid-year cryptocurrency outlook, adding that all risk assets went through redundant cleansing.
“Cryptos were a leading indicator of speculative exceedances in 2020-21 and are likely to resume surpassing most risk assets when dust settles from the sharp decline in 2022. Just under $ 1 trillion at the start of the first half of the year is the market value of crypto fraction of the approximately $ 25 trillion wiped out of global stock markets, “he wrote.
Going forward, it is unlikely that Bitcoin will trade below the $ 20.00 level on an ongoing basis, McGlone added.
“It may sink lower in the short term and take a while to build a similar base as in 2011, 2015 and 2018, but in the history of Bitcoin versus its 50-week average, it does not get much colder,” he said. “A common theme in cryptocurrencies is to embrace the bear and build a better financial system, especially from the institutional and long-term focus, similar to the 2000-02s bursting internet bubble.”
Bloomberg Intelligence pointed out that Bitcoin is either in one of the largest beef markets in history, with prices currently traded at a discount. Or it’s a failed experiment.
“Our bias is that Bitcoin adoption is more likely to continue to rise along with its lasting overperformance versus most risk assets,” McGlone pointed out. The Nasdaq 100 stock index (NDX) fell around 30% during the first half of the year, and a major reason why the Bloomberg Galaxy Crypto Index (BGCI) fell almost 70%. shares. “
Another indicator to be seen in Bitcoin is mining stress, which could mark a bottom in prices, the report noted.
“Miners played a major role in Bitcoin’s record sales during 2Q22 … Further liquidation is possible until at least the macro picture improves. Miners’ stress is usually the last phase in a Bitcoin bear market, as a declining hash rate and difficulty adjustment resets supply dynamics.” McGlone wrote. “During July 2021-March 2022, miners were mostly net accumulators of Bitcoin despite the price climbing to a record high of $ 69,000 and then back to around $ 35,000. the amount of computing power used for mining – continued to rise in the face of falling prices. “
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