According to Mike McGlone, Bloomberg’s senior commodity strategist, Bitcoin’s meteoric rise to $50,000 this week will likely continue well into the fourth-quarter, as psychological resistance flips to support in the next leg.
McGlone distributed Tuesday’s October 2021 edition the Bloomberg Galaxy Crypto Index. This report provided an overview of where digital assets might be heading for the remainder of the year. McGlone suggested that Bitcoin’s $50,000 resistance, which has been impenetrable since May dump, was about to change support.
He wrote that Bitcoin’s $50,000 resistance level since May seems ripe for becoming the crypto’s support price in 4Q.”
“We see the $40,000 mark as being similar to the $10,000 launchpad for crypto from 4Q20. Parallels can be seen from approximately 4x higher. The average price for 2021 is $44,500. Adoption and demand are increasing vs decreasing supply.
Related: Bitcoin surpasses commodities and stocks to be the best-performing asset in 2021
On Wednesday, the BTC price soared to $55,000. This was due to a combination of technical, fundamental, and sentiment factors that drove the cryptocurrency to new multi-month highs. Cointelegraph reported that Bitcoin is becoming more disconnected from the wider macro-environment. One example is the fact that Bitcoin’s rise of 9% on Wednesday coincided with the Dow Jones plunging over 200 points, and the United States dollar rising 0.4% against a basket currency.
McGlone’s report showed that Bitcoin is still at a discount compared to traditional stock market indexes such as the Nasdaq. McGlone explained that while rising equities will keep high-beta Bitcoin buoyant but that if the stock markets drop, more stimulus can solidify the underpinnings of the digital reserve asset.
The report had positive comments about Ether (ETH), despite widespread adoption of Decentralized Exchanges (DeFis) and Nonfungible Tokens (NFTs). McGlone set a $5,000 target for Ether prices, believing that there is a better path to follow.