Bitcoin is trading at a discount, says senior Bloomberg analyst
Senior Bloomberg analyst Mike McGlone has said that Bitcoin is currently trading at a massive discount and could become a global digital security.
According to Forbes, McGlone relied mostly on technical analysis of the 100-week moving average. In July, Bitcoin reached its lowest price ever compared to its 100-week moving average.
This is a sign that it is trading at an “extreme discount in an enduring bull market,” McGlone said.
The senior commodities analyst also touched on the Federal Reserve’s interest rate hike in the face of current inflation and what it could mean for Bitcoin.
He pointed out that cryptocurrencies benefited from the low interest rates in 2021 and it is not surprising that they are also affected by the interest rate hike.
But he believes that Bitcoin and Ethereum’s performance could soon defy the interest rate hikes and rise despite it, as several indicators point to the possibility of a bull run.
“Bitcoin is well on its way to becoming global digital security in a world moving that way, and Ethereum is a primary driver of the digital revolution, as evidenced by enabling the most traded cryptos – dollar tokens,” he said.
Bitcoin is in a buy zone
In addition, he explained that Puell Multiple currently means buy. Puell Multiple estimates the level of BTC selling pressure from the miners by calculating the daily issuance value of Bitcoin in USD with the 365-day moving average of the daily issuance value.
It is currently below 0.5, which puts it in the green zone and represents a strong buy signal. Thus, all these calculations point to BTC being on the verge of a breakout.
Meanwhile, other stakeholders also share the same opinion. Budd White, Chief Product Officer at crypto software company Tacen, believes BTC is “incredibly undersold, but also in a huge accumulation zone.”
He added that Bitcoin has shown its resilience and has established a bottom of $18k although it is trading higher than that. This could be because the markets are pricing in any additional hike from the Feds.
The performance of the cryptocurrency has already improved investor sentiment. According to the Crypto Fear & Greed Index, the index is currently at 31, which represents fear. This is a far cry from June 19, when it was at 6 -extreme fear.
Bitcoin prices have been stuck in the lower $20k range since June.
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