$60K is now more likely for Bitcoin than $20K, Bloomberg's senior strategist asserts

The analyst also treats the latest crypto ban in China as bullish for Bitcoin and the U.S. dollar.

Bitcoin (BTC) has a better probability of recovering back to $60,000 than breaking below its current support level of $30,000 to target $20,000, believes Mike McGlone, senior commodity strategist at Bloomberg Intelligence.

In detail, the BTC/USD exchange rate entered a prolonged consolidation period near $4,000 following an 80%-plus crash in 2018, but a sudden run-up in 2019 sent its prices to as high as $14,000 on some exchanges.

McGlone, who's known for his previous bullish calls on Bitcoin, noted that BTC, which has been consolidating near $30,000 since May, could post a similarly surprising rally while aiming to hit a refreshed resistance target near $60,000.

"The more tactical-trading-oriented bears seem to proliferate when Bitcoin sustains at about 30% threshold below its 20-week moving average, allowing the buy-and-hold types time to accumulate," the strategist wrote.

Bitcoin's bearish and bullish cycles appear to wobble around three key moving average indicators: the 20-week exponential moving average (20-week EMA; the green wave), which serves as interim support/resistance, the 50-week simple moving average (50-week SMA; the blue wave), and the 200-week simple moving average (20-week SMA; the orange wave).

During bull trends, Bitcoin prices typically stay above the three moving averages. Meanwhile, bear trends see the cryptocurrency's prices closing below the 20-week EMA and the 50-week SMA, as shown in the chart above.

The 200-week SMA typically serves as the last line of defense in a bear market. So far, Bitcoin has bottomed out twice near the orange wave, each time sending the prices explosively higher. For instance, a take-off from the 200-week SMA in 2018 drove Bitcoin prices to almost $14,000.

 

Similarly, the wave support capped the cryptocurrency's downside attempts during the COVID-19-led crash in March 2020. Later, the price bounced from as low as $3,858 to over $65,000.

Bitcoin is now in its third drop below this trendline since 2018. The cryptocurrency has broken below the 20-week SMA (near $39,000) and is now targeting the 50-week SMA (circa $32,200) as support. If the old fractal is repeated, it should continue falling toward the 200-week SMA (around $14,000).

However, McGlone believes there could be an early rebound. As a bullish fundamental, the strategist pointed toward the recent China crypto ban.

Cointelegraph