Bitcoin (Bitcoin) Is more likely to rise to $60,000 than to break below the current support level of $30,000 to reach the goal of $20,000, said Mike McGlone, senior commodity strategist at Bloomberg Intelligence.
A screenshot of McGonlong’s latest analysis of the flagship cryptocurrency, first of all shared Eric Balchunas, a senior ETF analyst at Bloomberg, showed him how he compares the continued price movement of Bitcoin with the “too cold” period of the 2018-2019 trading session.
Specifically, the BTC/USD exchange rate entered a long-term integration period close to 4,000 U.S. dollars after plummeting by more than 80% in 2018, but the sudden increase in 2019 caused its price to rise to 14,000 U.S. dollars on some exchanges.
Who is Magron Known for his previous bullish calls On Bitcoin, pointed out that BTC, already Consolidated nearly 30,000 USD since May, There may be an equally surprising rebound, while the goal is to reach a new resistance target close to $60,000.
The strategist wrote: “When Bitcoin remains below its 20-week moving average threshold of about 30%, more tactical trade-oriented short positions appear to surge, which makes buy-and-hold types Time accumulates.”
Moving Average Trio
Bitcoin’s bearish and bullish cycles seem to oscillate around three key moving average indicators: the 20-week exponential moving average (20-week EMA; green wave) as temporary support/resistance, and the 50-week simple moving average (50-week SMA) ; Blue wave) and 200-week simple moving average (20-week SMA; orange wave).
During a bull trend, the Bitcoin price usually stays above the three moving averages. At the same time, the bear market trend saw the price of cryptocurrencies close below the 20-week moving average and the 50-week moving average, as shown in the chart above.
The 200-week moving average is usually the last line of defense in a bear market. So far, Bitcoin has bottomed twice near the orange wave, each time making the price explosively higher. For example, taking off from the 200-week SMA in 2018 pushed the price of Bitcoin to nearly $14,000.
Similarly, during the crash caused by COVID-19 in March 2020, wave support limited the downward attempts of cryptocurrencies. Later, the price rebounded from as low as US$3,858 to more than US$65,000.
Bitcoin fell below this trend line for the third time since 2018. The cryptocurrency has fallen below the 20-week moving average (close to $39,000) and is now aiming at the 50-week moving average (approximately $32,200) as support. If the old fractal repeats itself, it should continue to fall towards the 200-week moving average (approximately $14,000).
However, Magron believes that it may rebound early.As a bullish fundamental, the strategist pointed out that recently China’s encryption ban.
The tether took the cake
Beijing announced a total ban on cryptocurrency operations in May. The decision hindered mining operations in the country, which were forced to stop or move bases abroad. In response, the price of Bitcoin fell sharply.
Nevertheless, Magron emphasized that China’s rejection of open source software and encrypted assets is a plateau for its economic growth.In a tweet Publish On Friday, the analyst attached an index showing the trading volume and capitalization of U.S. dollar-backed digital assets including Tether.USDT).
He then compared the growth in demand for the digitized U.S. dollar with the exchange rate of RMB against the U.S. dollar and pointed out that the logarithmic scale of market value fluctuations between the two legal currencies is lower than the zero baseline from 2018 to 2020. This means that the renminbi is depreciating against the dollar.
This ratio has just returned to above zero, indicating a medium-term increase in the exchange rate of RMB against the US dollar. But its upward trend still pales in comparison to Tether, which has a market capitalization that has risen by more than 40% from the baseline. McGron pointed out:
“China’s rejection of open source software and encrypted assets may mark a period of stagnation in the country’s economic upswing. We believe that while praising the value of the U.S. dollar and Bitcoin.”
In addition, Petr Kozyakov, co-founder and CEO of Mercuryo, a global payment network, pointed out that although the U.S. government has not officially launched a central bank-backed digital dollar like China, the availability of many other alternatives-including Tether, U.S. dollar coins (USDC) And Binance Dollar (BUSD)-may pose a challenge to the digital renminbi controlled by China.
“These cryptocurrencies have a 1:1 exchange rate against the U.S. dollar. As shown in the chart shared by McGlone, the U.S. dollar is leading the rise of digital currencies against the renminbi,” Kozyakov said.
“Although China’s crackdown has had an impact on the price of Bitcoin as it hovered above US$30,000 on June 23, the fundamentals have improved greatly since 2018 due to the institutional FOMO. […] By the end of the year, Bitcoin should rebound to $50,000. “
China’s economy will continue to grow
However, Yuriy Mazur of CEX.IO Broker rejected McGlone’s view. He pointed out that China’s economy should continue to prosper with or without cryptocurrency, and said that this has nothing to do with the demand for digital assets.
“The Chinese government is too smart to miss what the world considers valuable,” Mazur told Cointelegraph.
“Therefore, they are expected to take considerable measures to launch cryptocurrencies backed by the yuan that they fully control (in the future).”
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