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Bloomberg senior analyst Mike McGlone said Bitcoin is currently trading at a huge discount and could become a global digital security.
According Forbes, McGlone relied primarily on technical analysis of the 100-week moving average. In July, Bitcoin reached its lowest price relative to its 100-week moving average.
That’s a sign it’s trading at an “extreme discount in a sustained bull market,” McGlone said.
The senior commodities analyst also touched on the Federal Reserve raising interest rates in the face of current inflation and what that might mean for Bitcoin.
He pointed out that cryptocurrencies have benefited from the low interest rate levels of 2021 and it is no surprise that they are also affected by rising interest rates.
But he believes that the performance of Bitcoin and Ethereum may soon defy interest rate hikes and rise despite this, as several indicators point to the possibility of an upside.
“Bitcoin is well on its way to becoming the global digital security in a world going that way, and Ethereum is the main driver of the digital revolution, as evidenced by enabling the most widely traded cryptocurrencies – dollar tokens,” he said.
Bitcoin is in a Market Zone
In addition, he explained that the Puell Multiple currently means market. The Puell Multiple estimates the level of BTC selling pressure from miners by calculating the division of the daily Bitcoin issuance value in USD by the 365-day moving average of the daily issuance value.
It is currently below 0.5, which puts it in the green zone and represents a strong buy signal. So all these metrics point to BTC being on the verge of a breakout.
Meanwhile, other stakeholders share the same view. Budd White, head of product at crypto software company Tacen, believes that BTC is “incredibly undersold, but also in a significant accumulation zone.”
He added that Bitcoin has shown its resilience and has come down to $18k despite trading higher than that. This may be because markets are pricing in any additional hike from the Fed.
The performance of the cryptocurrency has already improved investor sentiment. According to the Crypto Fear & Greed Index, the indicator is currently at 31, representing fear. This is a far cry from June 19, when it was at 6 – extreme fear.
Bitcoin prices have been stuck in the lowest $20k range since June.
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