Senior Bloomberg Analyst Mike McGlone has said that Bitcoin is currently trading at a massive discount and could become global digital collateral.
According to Forbes, McGlone relied mostly on technical analysis of the 100-week moving average. In July, Bitcoin reached its lowest ever price vs the 100-week moving average.
This is a sign that it is trading at an “extreme discount within an enduring bull market,” said McGlone.
He pointed out that cryptocurrencies benefited from the low-interest rate levels of 2021, and it’s not surprising that they’re also affected by the rate hike.
But he believes that Bitcoin and Ethereum’s performance might soon defy the rate hikes and rise despite it as several indicators point to the possibility of a bull run.
“Bitcoin is well on its way to becoming global digital collateral in a world going that way, and Ethereum is a primary driver of the digital revolution as evidenced by making possible the most widely traded cryptos — dollar tokens,” he said.
Bitcoin is in a Buy Zone
Additionally, he explained that the Puell Multiple currently signifies buy. Puell Multiple estimates BTC sell pressure level from the miners by calculating the dividing Bitcoin daily 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. Thus, all these metrics point to BTC being on the edge of a breakout.
Meanwhile, other stakeholders also share the same opinion. Budd White, the chief product officer at crypto software company Tacen, believes BTC is “incredibly undersold but also in a major accumulation zone.”
He added that Bitcoin has shown its resilience and has established a bottom at $18k even though it’s trading higher than that. This might be because the markets are pricing any additional hike by the Feds.
The performance of the cryptocurrency has already improved investors’ sentiment. According to the Crypto Fear & Greed Index, the index is currently at 31, representing fear. This is far from June 19, when it was at 6 -extreme fear.
Bitcoin prices have been stuck in the lower $20k range since June.
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