The community is split right in the middle with Bitcoin at the moment. Over the past few weeks, the largest digital asset has failed multiple times to breach $10,000 and certain market analysts indicated that BTC might falter under falling buying pressure.
Regardless of that, Bloomberg’s long-term outlook for Bitcoin remained completely bullish. According to Bloomberg’s June 2020 edition of Bloomberg Galaxy Crypto Index (BGCI), the company expected that asset to re-test its all-time high valuation of $20,000.
That is a relatively big ask for Bitcoin considering the asset has yet to rally past its yearly high of $10,500. BTC also has immediate resistance at a yearly high of 2019 at $13,800, which should be its current long-term target.
However, Bloomberg’s Mike McGlone analyzed the market a little differently than the rest of the industry. McGlone suggested that due to the COVID-19, the maturation rate of Bitcoin has accelerated which has led to the ever-increasing appetite of the institutional investors. He believed that Grayscale’s intent and action in terms of accumulation of more than 25 percent of the BTC supply in 2020 stands true to that fact.
Is $20,000 attainable at the current rate though?
Without attempting to rain on Bloomberg’s parade, it is important to note that we currently reside in an ever-changing environment went it comes to the larger financial landscape.
To be fair, Bitcoin has a strong chance of breaching 2019’s yearly high of $13,800. A consistent position between $8500-$10000 over the last month are clearly indicators that a bottom at this range might be strong enough as well in the future.
Hence, considering its next bullish cycle starts during Q3 2020, with the possibility of the world economy becoming more stable, it will be hard to argue that strong bullish momentum would easily push the asset above the $13,000 mark.
However, as observed since 2019, Bitcoin does not pump like 2017 anymore. A sudden jump of thousands of dollars has been a rare occurrence, and even though the valuation jumped 178 percent from April 2019-June 2019, over the next 6 months, we saw the asset shaved 50 percent of its valuation.
Now, many people in the community criticized such retracements but it is actually a healthy sign when the price corrects itself after a huge plunge.
From an on-chain point of view, the utilization has dropped down significantly as well.
The above chart indicates the number of unconfirmed transactions in the BTC mempool. As observed the total number of unconfirmed transactions has been going down since the halving ended. Although it appears positive on the surface, it also indicates that users were no longer using the chain as fervently as before the halving. Less congestion equals to less unconfirmed transactions.
Hence, it becomes incredibly difficult to sustain a bullish rally that will not be backed with fundamental metrics.
Therefore, at press time it won’t be a wise bet to pinned down all your hopes on Bitcoin to reach $20,000. At least not at the moment, when the market is still trying to find its bearing back.