While Bitcoin saw a 10% jump this week, rallying from the multi-month lows of $6,400 to surge as high as $7,300, there is still a sentiment in the cryptocurrency market that a return to the $6,000s, then a drop to the $5,000s is entirely feasible.
Related Reading: Research Group: Bitcoin’s Halving Unlikely to Catalyze Bull Run, But Here’s What Might
For instance, cryptocurrency trader Mac remarked that $5,100 — 30% lower than current prices — will be the ultimate bottom of the bearish move that has formed. He looked to a confluence of price levels: the double-month volume-weighted average price, a “price inefficiency fill” level, and the 200-week moving average.
This was followed by Bitcoin analyst Jacob Canfield, who as reported by NewsBTC previously, said that he thinks BTC is not yet near a macro bottom. He thus remarked that the cryptocurrency is likely to see a 20% drawdown from the current level of $6,900 to $5,500, for there is where the 0.786 Fibonacci Retracement of the rally from $3,100 to $14,000 lies.
Despite these analyses, a Bloomberg Intelligence strategist has asserted that Bitcoin has a higher likelihood of surging to $10,000 than retracing all the way to the $5,000s. Here’s why.
Bitcoin Could Gain 40% in Early 2020 for These Reasons
Mike McGlone, the senior commodities strategist for Bloomberg Intelligence, recently made the assertion that Bitcoin has a higher likelihood of surging 40% to $10,000 than falling by 30% to $5,000 in 2020, arguing that BTC is entering a consolidating bull market phase, marked by a tightening in moving averages.
Bitcoin in 2020: $10,000 Appears to Be More Likely Than $5,000 —#Bitcoin should continue to advance in a consolidating bull market, in our view, with maturation of the first-born crypto in the next decade the primary distinction vs. the current one. pic.twitter.com/JxEAhArwTf
— Mike McGlone (@mikemcglone11) December 19, 2019
As to why he has made this assertion, McGlone mentioned in his December Crypto Outlook report for Bloomberg Professional subscribers that there are a variety of bullish factors that have a good likelihood of boost BTC higher. They are as follows.
- As gold outperforms, so will Bitcoin: Gold’s strong year, which is abnormal due to strength in the equity market, comes on the back of a confluence of macro factors: a raging trade war that has resulted in billions in tariffs and widespread market uncertainty, coupled with liquidity injections by the Federal Reserve and other central banks, seemingly weakening fiat currencies against harder assets. McGlone has argued that this trend is likely going to perform well heading into 2020. This, he claims, will help Bitcoin due to it also being an alternative asset with similar characteristics to the metal.
- Adoption + halving will boost BTC: McGlone opined that a perfect storm is building for the cryptocurrency in terms of its “basic premises” — mass adoption and a fixed supply cap. “Bitcoin is winning the adoption race among crypto assets and is becoming increasingly scarce, which favors price appreciation. Plenty can go wrong with a nascent asset, but unless the basic premises reverse, there’s a higher probability to sustain price appreciation vs. depreciation,” he wrote.
Featured Image from Shutterstock