Bloomberg Intelligence’s senior commodity strategist Mike McGlone says Bitcoin (BTC) could be in for a “price rise” during the fourth quarter thanks to several fundamental catalysts.
The analyst says a wide swath of investors concerned about debt and inflation may be ready to place their faith in the underlying technology that gives Bitcoin its hard supply.
[adinserter block="1"]“Relative to rising US debt and tensions over a potential default, Bitcoin may be entering a unique phase for a 4Q price rise as markets gain trust in the coding that defines the crypto’s supply.
The debt-ceiling drama may work against managers that avoid allocations to Bitcoin.”
In Bloomberg’s latest Crypto Outlook report, McGlone says that BTC appears to be in the middle of a discounted bull market. He cites Bitcoin’s 260-day volatility versus the S&P 500 as evidence to suggest that the top crypto has a lot further to rise before entering a new bear phase.
“Bitcoin looks like a rested and discounted bull market. The October 4 price at about $49,000 is just below its 10-year regression line and not far above the 2021 average ($44,500). Bitcoin was hot in April before correcting on concerns about energy consumption and a China ban, representing the uniqueness and strength of the world’s largest decentralized network.
Our graphic depicts a key foundational support – 260-day volatility dropped in 2020 to its lowest ever versus most major asset classes, notably the S&P 500.”
Looking at Ethereum, McGlone says the EIP-1559 update which put pressure on the ETH supply is improving the price outlook for the second-largest crypto by market cap.
“A bit overextended in May, Ethereum resembles a consolidating and discounted bull market. Demand and adoption are rising, but our graphic depicts a notable difference from a year ago – plunging supply.”
McGlone says that with ETH already fending off its 20-week moving average near $2,000, the path of least resistance is now up.
“Ethereum’s floor just below $2,000 from May-July appears to have added a handle to $3,000 for 4Q, tilting risk versus reward toward further price appreciation. It’s likely still the early price discovery days for Ethereum.”
The full Bloomberg report can be read here.
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