The largest cryptocurrency in the world, Bitcoin (BTC)has been flirting at levels around $20,000 after a brutal correction in the last two months. Global macro factors are giving worrying signals and market sentiment has turned extremely bearish.
However, the senior commodity strategist at Bloomberg, Mike McGlone, has a different opinion on this point. Defying broader market sentiment, Mr. McGlone believes that Bitcoin could be about to kick off the biggest bull run in history during the second half of 2022.
He further added that there is a growing consensus that BTC adoption will continue to rise. The Bloomberg strategist wrote:
“Bitcoin could be one of the biggest bull markets in history at a relatively low price to start 2H. Or crypto may be a failed experiment in the process of being fired, like #crudeooil. Our bias is that Bitcoin adoption is more likely to continue to rise”.
As we are currently in the middle of the year, McGlone also explained the outlook for crypto assets. Many analysts believe that this could be the right time to accumulate Bitcoin considering there is too much bearish sentiment. The Bitcoin Fear and Greed Index shows that investors are still in a state of extreme fear.
Mike McGlone went on to compare the current Bitcoin bear market to that of 2018. He said:
“With the Bloomberg Galaxy Crypto Index approaching a similar drawdown as the 2018 bottom and Bitcoin discounting to its 50 and 100 week moving averages.” As with previous foundations, the risk versus reward is skewed toward receptive investors in 2H.”
Bitcoin on-chain metrics
Honestly, there is not much of a change in Bitcoin’s on-chain metrics after the recent correction to $20,000. CryptoQuant CEO Ki Young-Ju explains that BTC’s on-chain data remaining anemic is one of the factors that pressure from the sell side is reducing. He wrote:
I have not seen any significant activity on the Bitcoin chain for the last 7 days. Who knows the future, but at least the $BTC market is safe from sell-side liquidity as long as the chain is calm.
In fact, no one knows how long the cryptocurrency bear market will last. Some of the global macro indicators have been suggesting that the US and Europe may be hit by a recession given the solid security on inflation. The Federal Reserve has already announced its plans for successive rate hikes.
Mike McGlone compares the current state of crypto to the internet bubble of the 2000s. He added:
“A common theme in cryptocurrencies is hugging the bear and building a better financial system, especially from the longer-term and institutional approach, similar to the internet bubble burst of 2000-02. Purging excesses was the state of all risk assets in H1”.