In the latest Crypto Outlook report released this month, Bloomberg senior analyst and commodity strategist Mike McGlone, proclaimed that in the worst case scenario, Bitcoin would revisit the $20,000 support level. Addressing $20,000 as the “extreme downside”, the commodity strategist said this would happen if we see an event similar to the global market crash that happened in March 2020.
However, McGlone remains bullish about Bitcoin in his sentiments. He forecasted that Bitcoin’s “initial target resistance” level is $50,000.
The analyst confirmed that Bitcoin is at present in a consolidating bull market. He said the increased adoption witnessed has so far assisted BTC’s price, pushing the support of the largest cryptocurrency by market cap to $30,000.
Commodity strategist McGlone proclaimed that Bitcoin’s growth and adoption also reveal the potential of the cryptocurrency in becoming a global reserve asset.
McGlone also highlighted some other factors that are contributing to the accelerating growth of Bitcoin in the market. The Bloomberg strategist said the “accelerating digitalization,” as well as the increasing “global liquidity” are factors assisting Bitcoin.
Even though, the rising debt-to-GDP levels, the global quantitative easing and unusual low interest rates are on the side of gold pushing its price, investors are beginning to have more interest in digital assets due to the rapidly growing technology around the world, McGlone said.
He added that by the end of 2020, Bitcoin was able to outpace Dow, by becoming a less risky asset.
On Bitcoin’s volatility, McGlone said the gradual maturation and fixed supply of the cryptocurrency would help reduce the volatility of the asset, and by next halving (scheduled for 2024) Bitcoin’s volatility would have reduced to the same level with that of gold.
The Bloomberg strategist explained the challenges and tests Bitcoin faced in the market over the years are normal for nascent technology, however, he said Bitcoin would probably become an asset substituting gold in investors’ portfolio.
McGlone also aired his take on Ethereum as the analyst seems convinced by the performance of the second largest cryptocurrency by market cap. He however explained that the performance of Ethereum still depends on Bitcoin’s price in the market, hence Ethereum “should do just fine” inasmuch as Bitcoin continues to rise.
At present Bitcoin continues to remain parallel around the $36,000 level with a weak support around the $34,000 level and a strong one around the $30,000 level. It is expected that a break above the $40,000 price will put the cryptocurrency back on the bullish ride.