Bloomberg’s lead commodities strategist says that the second half of this year could be Bitcoin’s (BTC) time to shine, after nearly eight months of bearish price movement.
Analyst Mike McGlone tells his 47,000 Twitter followers that Bloomberg’s Galaxy Crypto Index, which follows a basket of the largest cryptocurrencies to track the market’s overall performance, is mirroring its behavior from the 2018 bear market bottom.
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“With the Bloomberg Galaxy Crypto Index nearing a similar drawdown as the 2018 bottom and Bitcoin’s discount to its 50- and 100-week moving averages similar to past foundations, risk vs. reward is tilting toward responsive investors in 2H.”
McGlone likens the current state of the crypto market to the internet bubble of the early 2000s. According to the analyst, a similar cycle is playing out whereby over-valued projects get purged from the space before the market reverses course on a long-term uptrend.
“Midyear outlook [on] crypto assets – A common theme in cryptos is to embrace the bear and build a better financial system, notably from the institutional and longer-term focused, akin to 2000-02’s bursting internet bubble. Purging the excesses was the state of all risk assets in 1H.”
While many crypto bulls fear the Federal Reserve for its potential to weigh down on digital assets with hawkish monetary policy, McGlone says that from here on out, the Fed may end up having to turn dovish again in the face of a struggling stock market.
He shares a chart from Bloomberg showing the S&P 500 potentially at a spot where reversals have historically taken place.
“Respite for the battered US stock market may be just a couple of Federal Reserve policy meetings away.”
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