Bitcoin and Ethereum’s date with the $100,000 and $5,000 price levels respectively is still well on the course according to Bloomberg’s Mike McGlone.
According to a recent report by the senior commodity strategist at the media powerhouse, Bitcoin and Ethereum are poised to rally later in the year despite the year starting on a slightly low note.
Mike shares the Bloomberg Galaxy Crypto Index, a capped market capitalization-weighted index designed to measure the performance of the largest digital assets traded in USD. Although about 120% up in 2021, he says the index is set to keep marching higher in 2022.
“At about 80% of the Bloomberg Galaxy Crypto Index, we expect the top two cryptos to remain dominant and continue advancing in 2022,” he writes.
Bitcoin And Ethereum Unlikely To Revisit These Levels
Despite cryptocurrencies facing a long thread of headwinds that are driving the currency sell-off, the Pundit pinpoints certain levels that he believes will act as inflation areas for the top two cryptocurrencies.
“Bitcoin, Ethereum Have Solid Bases to Build On. Price supports exiting 2021 of about $30,000 for Bitcoin and $2,000 for Ethereum appear solid,” he adds. “A risk-off swoon like that of 2020 may put those key supports in play but is unlikely.”
He further notes that Bitcoin is more likely to head northwards as the year continues to unfold. “What’s more probable, we think, is Bitcoin heading toward $100,000 and Ethereum breaching $5,000 resistance”.
Fed’s Rate Hike Bullish For Bitcoin, Ethereum?
Mike warns that with the kind of growth witnessed across major risk assets in 2021, the Fed may be inclined to raise interest rates to suppress inflation. However, he believes that Bitcoin may be a primary beneficiary in the process, becoming a global reserve asset.
With the S&P 500 overstretched, a rate hike in 2022 by the Fed could bring a rotation of liquidity into commodities and Bitcoin which have always appeared to be early reversion leaders.
The pundit further adds that Bitcoin’s 2022 Foundation Rests on 2021 Hash-Rate Reset, its scarcity and overflowing demand. Despite the world’s largest Bitcoin mining hub, Kazakhstan falling coming under the grave danger of losing its hash rate following street unrests over power outages, Mike is convinced that with the full recovery from the 2021 hash-rate crash and price swoon, Bitcoin is on sound footings at the start of 2022.
At press time, Bitcoin is finding a footing along with $42,126 while Ethereum lingers at $3,168 with Mike predicting the likely resumption of an “enduring upward trajectory”.