Bitcoin (BTC)’s meteoric rise above $50,000 this week is likely to continue into the fourth quarter, as psychological resistance flips to support the next phase of the bull market, according to Mike McGlone, chief commodity strategist at Bloomberg.
On Tuesday, McGlone circulated the October 2021 issue of the Bloomberg Galaxy Crypto Index, which provided an overview of where digital assets could head for the rest of the year. In the report, McGlone speculated that Bitcoin’s $50,000 resistance – a level that has proven impenetrable since the May dump – was about to flip support.
“Bitcoin’s $50,000 resistance point since May appears to have matured into crypto support value in the fourth quarter,” he wrote, adding:
“We are looking at the $40,000 mark as similar to the $10,000 crypto launch pad from 4Q20. Parallels are visible from about 4x higher. The average price in 2021 is $44,500, adoption and demand are rising against diminishing supply.”
Related: Bitcoin outperforms stocks and commodities to become the best performing asset for 2021
Bitcoin price surged to $55,000 on Wednesday, as the confluence of technical, fundamental and sentiment factors pushed the cryptocurrency to multi-month highs. As Cointelegraph reports, Bitcoin is increasingly decoupling from the broader macro environment. Case in point: BTC’s 9% rally came on Wednesday as the Dow Jones index fell more than 200 points and the US dollar rose 0.4% against a basket of rival currencies.
The McGlone report indicated that Bitcoin is still at a discount when compared to traditional stock market indices such as the Nasdaq. “Rising stocks should keep the high beta booming, but if the stock market falls, more stimulus will bolster the underpinnings of digital reserve assets,” he explained.
The report also had positive things to say about Ether (ETH) amid widespread adoption of DeFi, decentralized exchanges and non-fungible tokens. Regarding the price of Ether, McGlone has set a target of $5,000, arguing that the path of least resistance is higher.
