Bitcoin has soared almost two-fold over the last year and is up circa 35% on a year-to-date basis. The world’s oldest cryptocurrency incurred a massive correction in May after a drop from its April $65,000 all-time high. But not all is lost for the bitcoin price. Bloomberg’s senior commodity analyst Mike McGlone recently stated that bitcoin is likelier to pull off a blistering rally to $100,000 than fall to $20,000 in 2021.
Bitcoin Is About To Make Another Massive Move. The Question is: Where?
Bloomberg’s crypto arm has published its June 2021 crypto report, in which McGlone noted that bitcoin is in a “resting crypto-asset bull market”. The Bloomberg Galaxy Crypto Index (BGCI) indicates that a bull market could commence in June. The strategist describes bitcoin as “stronger, greener, and less extended” than in April. This means that the bellwether cryptocurrency is more likely to continue on its path to $100,000 than take a clobbering to the $20K level.
The report cites the shrinking supply and the huge amounts of institutional money flowing into the bitcoin market as one of the reasons for the possible continuation of bitcoin’s uptrend.
“Akin to the big rally years of 2013 (55x) and 2017 (15x), 2021 follows a cut in supply. The 2020 halving came amid unprecedented global fiscal and monetary stimulus, along with institutions tilting toward Bitcoin allocations,” the report says.
Bitcoin’s mainstream adoption is still in the nascent days and Tesla adding bitcoin to its balance sheet proves that bitcoin has won the race. The cryptocurrency appears to be ranging within the $30,000 handle in recent days. The Bloomberg analyst, however, expects prices to slice through the hurdle and advance higher in the coming months after the ongoing consolidation period.
Bitcoin’s Fundamentals Look Healthy
Bitcoin is currently trading where some said it would never trade again — below $40,000. Many traders have expressed their concerns over the short-term performance of bitcoin, primarily because of the haunting energy usage debate. Nonetheless, the coin’s fundamentals point toward an optimistic future.
As aforementioned, the report points to the 2020 bitcoin block reward halving, unprecedented global money printing, and other fundamental market conditions as key factors that could banish a bleed out to $20,000 in 2021.
“Add last year’s supply cut, the migration to institutional portfolios, Ethereum futures and the launch of ETFs in Canada and Europe, and we see greater potential for Bitcoin to head toward $100,000 than sustain below $20,000.”
The combination of robust fundamental factors and technical underpinnings buoy the near-term bull case of bitcoin. In essence, the probability of another massive correction remains low, according to McGlone.