Mike McGlone, senior commodities strategist at Bloomberg Intelligence (Bloomberg research arm), believes that the current price of bitcoin is approaching “extreme discount” territory compared to the lows of 2018 and 2020.
According to McGlone, the price of bitcoin is on the verge of reaching strong support, which has historically been an “extreme discount”. McGlone’s tweet and attached chart show Bitcoin hovering below its 50-week moving average (MA).
The expert noted that being 20% below the 50-week moving average often resulted in “good price support”. The last time Bitcoin traded at such a discount compared to the annual average was during the 2018 crypto winter and March 2020 price crash.
About 20% below its 50-week ma, #Bitcoin is approaching too-cold levels that have often resulted in good price support. Our graphic depicts the most extreme discount for the crypto vs. its annual average since the 2020 and 2018 lows. On Feb. 22, the #DowJones was close to parity pic.twitter.com/SXUaEv0jow
— Mike McGlone (@mikemcglone11) February 22, 2022
Even though the price of Bitcoin and other leading crypto assets have fallen to around 50% from their all-time highs, McGlone is confident that 2022 will provide a solid foundation for cryptocurrency prices. In a tweet last week, McGlone noted that rising inflation and asset prices, along with tensions in Eastern Europe, could lead to the spread of cryptocurrencies.
McGlone explained that Bitcoin has begun to show divergent strength against stocks that have been hit by geopolitical uncertainty and the Federal Reserve’s looming interest rate hike.
Adherents of the digital assets of bitcoin, ethereum and the spread of cryptodollars may find a solid footing in 2022 on increased inflation and asset prices, as well as due to the military conflict between Russia and Ukraine. The No. 1 cryptocurrency is showing multidirectional strength compared to stocks.
Digital-asset stalwarts #Bitcoin, #Ethereum and the proliferation of crypto dollars may find a firm foundation in 2022 on elevated inflation and asset prices, along with tension surrounding #Russia and #Ukraine. The No. 1 crypto is showing divergent strength vs. equities. pic.twitter.com/6SO3WPzxCg
— Mike McGlone (@mikemcglone11) February 17, 2022
Source: Cryptocurrency
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