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

With the recent Bitcoin price crash, some speculation has come out of the market. Both amateurs and experts have made their predictions about what they think will happen in the future. While most have been bearish, Mike McGlone’s forecast is rather bullish. The 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 prediction for the leading cryptocurrency in the market. Panic had swept through investors when the digital asset had fallen to the $20,000 level, just slightly above it. While many believe this signaled further downtrend, some have said it marked the bottom for the asset.

Related literature | Bitcoin Financing Rates Remain Negative, But Open Interest Tells A Different Story

In his tweet, the Bloomberg analyst points to the early days of adoption as opposed to bitcoin’s dwindling supply. This argument is certainly not new. The limited supply of BTC has long been one of the draws of investors who believe that eventually the scarcity of the cryptocurrency will drive its price. Mainly, McGlone suggests that BTC is approaching “too cold” levels, and as such, $20,000 may well be the new $5,000.

This implies that the bottom of the current downtrend is possible. Looking at the previous bear market, it is clear that the bottom was clocked precisely as the price dropped below $6,000 in the first days of 2022. If so, then there is no further decline for the digital asset from this point.

BTC Resume Downtrend | Source: BTCUSD on TradingView.com

But is the bottom in it?

Just as one historic move can tell one story about the bitcoin bottom, so do the others. Now it is known that the latest bear market saw the price of bitcoin fall by more than 80% from its all-time high. This trend has been closely followed through the bear markets. Despite the brutal crash of the past few days, bitcoin is still less than 70% lower than its all-time high in November. Given this, there could be more decline to come if it followed this trend.

Related literature | Bitcoin Bounces Back Before It Hits 2017 Peak, Is The Bottom In It?

However, there is another trend that makes McGlone’s prediction credible. This is the fact that regardless of the decline, the price of the digital asset has never fallen below the previous cycle peak. Since bitcoin’s last peak was just under $20,000, the bottom could indeed be if this trend is sustained.

However, one thing to note is that the current market is diverging from previously established trends. It started with the multiple bull rallies of 2021 and has now penetrated into the bearish market of 2022. So perhaps more historical trends will be broken.

Featured image from Cryptoknowmics, chart from TradingView.com

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