Mike McGlone Says $20,000 Is The New $5,000 For Bitcoin, But Is He Right?

With the recent collapse of the bitcoin price, a number of speculations exited the market. Hobbyists and experts alike make predictions about what they think will happen in the future. While most of it was bearish, the forecast from Mike McGlone is somewhat bullish. A Bloomberg analyst has sparked hope in some with his prediction that $20,000 is the new $5,000 for Bitcoin.

Good News for Bitcoin

McGlone took to Twitter to share his predictions for the market-leading cryptocurrency. Investors panicked when the digital asset fell to the $20,000 level, just above it. While many believed that this was a sign of more downside ahead, some said it may have marked the bottom of the asset.

Related reading | Bitcoin Funding Rates Remain Negative But Open Interest Tells Another Story

In his tweet, a Bloomberg analyst notes that the early days of adoption may prevail in contrast to the diminishing supply of bitcoin. This argument is by no means new. The limited supply of BTC has always been an attraction for investors who believe that the scarcity of the cryptocurrency will eventually drive its price up. Essentially, McGlone suggests that BTC is approaching “extremely cold” levels, and as such, $20,000 could be the new $5,000.

What this indicates is that the bottom of the current downtrend may be in place. Looking at the previous bear market, it is clear that the bottom was made just as the price fell below $6000 in the early days of 2022. If so, there is no further downside for the digital asset from this point on.

Bitcoin price chart from TradingView.com

BTC resumes downtrend | Source: BTCUSD on TradingView.com

But is the bottom inside?

Just as one historical movement can tell one story about Bitcoin’s bottom, so too can others. Now, it is known that the last bear market saw the price of Bitcoin drop by more than 80% from its all-time high. This trend was closely followed by bear markets. Despite the brutal crash of the past two days, bitcoin is still less than 70% from its November high. Given this, there may be more downside if you follow this trend.

Related reading | Bitcoin bounced back before hitting the 2017 peak, is the bottom inside?

However, another trend lends credence to McGlone’s predictions. This is the fact that regardless of the drop, the price of the digital asset has never fallen below the peak of the previous cycle. Given that Bitcoin’s latest peak was just under $20,000, the bottom might indeed be if the trend continues.

One thing to note though is that the current market has been deviating from previously established trends. It started with several bullish rallies in 2021 and has now moved into a bearish market of 2022. Therefore, there may be more breaks of historical trends ahead.

Featured image from Cryptoknowmics, chart from TradingView.com

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