A technical indicator is pointing to a rebound for the price of Bitcoin.
The GTI VERA Bands Indicator, which measures up and down trends to identify price patterns, is pointing to a bounce for BTC. The previous four times that Bitcoin dropped below the band, a rally soon followed.
Bloomberg Intelligence analyst Mike McGlone says mounting concerns about the global economy could boost Bitcoin in the long term. For now, McGlone told on Bloomberg TV he believes BTC is consolidating after its quick rise to nearly $14,000.
“I think it’s backing and filling its gains. It got up to around $14,000 recently and it’s pulled back to just above $9,000. It’s just basically retracing the big bear market from 2018. But it went too far too fast. It’s up about 200% on the year. The significance is the broader market like the Bloomberg Galaxy Crypto Index is up only 60%. So it’s Bitcoin breaking away from the pack and right now it’s just backing and filling.”
McGlone says Facebook’s Libra and Binance’s plans to create a stablecoin of its own further make the case for Bitcoin’s strength as an independent store of value.
“Every time I hear of a new stablecoin intended to be launched like the latest from Binance, and Libra, to me it creates a greater disparity in Bitcoin and the rest of the market. It makes Bitcoin become more like digital gold because it’s so unique. There’s no one else’s liability and it separates from the pack.”
As for the coming launch of Bakkt’s physically-settled Bitcoin futures, McGlone says it’s part of the leading crypto’s maturity and path to price stability.
“Volatility is the key thing. Volatility in Bitcoin is virtually guaranteed to reach new lows. And if you look at 180-day volatility, the low in 180-day volatility was around 40% and that was from October of 2015. That marked the bottom in the market and then it took off. But with more and more vehicles coming in the space, with Bakkt and futures and all of the ways for people to get involved in Bitcoin, that volatility is virtually guaranteed to get suppressed, which I think is what it’s doing now.”