Crypto Market Outlook Bitcoin: Hovering Above Support

By: Joshua Aldio, Business Associate

Disclaimer: Tokenomy does not provide any investment, financial, accounting, valuation, tax, legal or other professional advice. The opinions expressed in the article is the author’s personal view only. All decisions to buy, sell or trade any Digital Asset using the Services are made solely by you, and you are fully responsible for all such decisions.

The price of BTC could be set for a bullish rebound this year, says Bloomberg’s senior commodity strategist Mike McGlon, as the market shows similar signs to the bottom of 2018. Bloomberg’s senior commodity strategist Mike McGlone is tipping that the price of Bitcoin (BTC) will rebound in the second half (2H) of 2022. Sharing his thoughts to his 48,100 Twitter followers, McGlone saw positive signs in the data Bloomberg’s Galaxy Crypto Index (BGCI) and the 50-week and 100-week moving averages of BTC’s price. He suggested that the current indicators are showing similar signs to the bottom of the bear market in 2018, which preceded a strong rebound in the first half of 2019.

The Bloomberg’s Galaxy Crypto Index (BCGI) is designed to measure the performance of the largest crypto assets to ascertain a general view of the market’s overall performance. Moving averages pinpoint the average price of an asset over a specific amount of time, such as 50 or 100 days.

Crypto winter in 2018 was a rough time for BTC, as the price plunged down from the $16,000 region in January to a market bottom of around $3,200 by mid-December, according to data from CoinGecko. Following the carnage, however, BTC went on to pump to around $13,000 by late June.

McGlone predicted in a follow-up post that BTC is either on track for “one of the greatest bull markets in history at a relatively discounted price to start 2H” or that data is showing that the crypto market is starting to fail and scare away investors.

“Our bias is [that] Bitcoin adoption is more likely to continue rising,” he said.

McGlone likened the washout in 1H to the “2000-02’s bursting Internet bubble,” which saw many firms tank but also paved the way for top companies like Amazon and eBay to grow.

Weighing over the analysis, however, is the fact the bearish conditions have been in large part in response to the United States Federal Reserve’s hawkish monetary policy and inflation reel-in attempts via a series of interest rate hikes.

In 2022, BTC and the overall crypto market have suffered from several macro factors such as the Russian invasion of Ukraine, global regulation and unemployment rates. Meanwhile, crypto projects and companies imploding have turned sentiment even more bearish.

Bitcoin Technical Analysis

As shown in the chart above, Bitcoin is forming area of demand by ranging at $18,500 to $20,500. We see that Bitcoin also forming a potential reversal pattern called Double Bottom with bullish candlesticks is taking over the movement. We have to wait the break of the double bottom neckline to be confirmed for the next bullish move. 

If we see in the bigger timeframe and using Elliot Wave analysis, the next bullish move is only a rebound movement from its bigger bearish structure. Wave 2 has finished with Fibonacci 38.2 level, and we analyze that wave 4 will finish at Fibonacci golden area and continue its bearish to next target at $15,000. 

Bitcoin on-Chain Analysis :
Number of New BTC Addresses Reaches New All-Time High

Number of BTC Addresses

The total number of non-zero BTC addresses has been moving upwards since March 2018. This followed a sharp sell-off after the then all time high in December 2017. The rate of increase accelerated greatly after December 2018, when the current bull run began. 

Initially, the number of new addresses dipped slightly in April 2021 when BTC reached a local top. However, the upward movement continued afterward in Oct 2021. After another small dip this May, the number of new addresses reached a new all-time high of 42,171,167 on July 7.  So, despite the market correction, the interest at BTC is still at an all-time high.

Firstly, the number of addresses with more than one BTC (red) has increased significantly and is at a new all-time high. 

However, addresses with more than 10 (blue) and 100 (orange) has decreased since the beginning of 2021. While both have started to increase since March, they are nowhere close to their all-time highs. 

So, the data for medium sized addresses shows that while they are increasing since the beginning of the correction, the trend has been mostly downwards since the beginning of 2021.

The readings for large addresses are interesting. While accounts with more than 1,000 (purple) and 10,000 BTC (yellow) fell in the beginning of 2021, they have begun to increase sharply since March (red circle). Therefore, while large addresses started to distribute their holdings in the beginning of 2021, they have begun to stack at a significant rate since the correction began.

Trading Call : Buy on Neckline Breakout at $22,200

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