As the cryptocurrency market losses of the first six months of 2022 spill over into the second half of the year, most participants are watching closely for the next move in the industry. Along these lines, Bloomberg Senior Commodity Strategist Mike McGlone believes that Bitcoin’s first-half losses can serve as a basis for investors.
In a Tweeter on July 6, McGlone said the current price movement could be beneficial for reactive investors based on previous rallying foundations.
The strategist stress that it is necessary for the general market to adopt the current market sale to build a sound financial system. According to McGlone, the current situation correlates with the bursting of the dot-com bubble in the early 2000s.
“A common theme in cryptos is to embrace the bear and build a better financial system, especially from the institutional and longer-term focused, similar to the dot-com bubble burst of 2000-02. Excess purge was the state of all risky assets in 1H Bitcoin’s pullback from its 50 and 100 week moving averages similar to past foundations, the risk versus reward leans toward 2H reactive investors,” McGlone said.
Bitcoin and gold will dominate the H2
McGlone’s latest take on Bitcoin comes after he predicted the asset, alongside gold, would likely dominate the markets for the rest of the year. He noted that dominance would emerge if the stock market continued to slump based on monetary initiatives implemented by the Federal Reserve, such as raising rates.
However, Bitcoin and the broader markets have reacted negatively to the current high inflation environment, shattering the idea that the flagship crypto is an inflation hedge. Bitcoin’s plunge peaked with the asset recording its worst quarter in Q2 2022 with returns of -56%.
Despite the bullish outlook for the sector, several market leaders believe that the crypto market is still struggling.
As reported by Finbold, Danish bank Saxo Bank has concluded that the crypto sector is still at a crossroads. The bank noted that the general market recovery would depend on developments in general macroeconomic sentiment, regulation and institutional adoption.
Disclaimer: The content of this site should not be considered investment advice. The investment is speculative. When you invest, your capital is at risk.