Mike McGlone says Bitcoin and Ethereum prices could rally higher given their respective supply-demand dynamics.
Bitcoin price has bounced from weekly lows of $33K to trade around $38,700, while Ethereum looks to strengthen above $2,600 after bouncing off lows of $2,200.
Crypto has traded in lockstep with stocks amid headwinds associated with US Federal Reserve’s monetary tightening.
Bloomberg commodity strategist Mike McGlone believes the prices of Bitcoin (BTC) and Ethereum (ETH), the top two cryptocurrencies by market cap today, are yet to peak.
According to the analyst, the two cryptocurrencies are still in “early adoption days.”
His suggestion? The potential for future price gains remains high as networks see more growth.
He points to the increasing demand for the digital assets versus their respective declining supply and believes these could be key metrics in projections of further price implications.
Bitcoin has a fixed supply of 21 million while Ethereum’s recent upgrades have seen millions of dollars worth of ETH burned as the network looks to a supply cut.
“By the rules of economics, a market with rising demand and declining supply will go up over time, suggesting that Bitcoin may be forming a bottom again around $30,000 as $60,000 resistance ages,” McGlone said in an earlier comment.
As for Ethereum, he says bullish fundamentals remain intact even as price continued to fluctuate in the $2,000-$4,000 range. The price range, he notes, has bulls buying the dip while sellers try to defend the $4K barrier.
McGlone, however, says that “something unlikely [that] reverses the proliferation of the nascent [crypto] technology” would be bad for crypto markets.
#Bitcoin and #Ethereum remain in early adoption days, with increasing demand vs. declining supply and related price implications. Our bias is why complicate it — unless something unlikely reverses the proliferation of the nascent technology, prices should rise over time. pic.twitter.com/SAgqWrfIMV
— Mike McGlone (@mikemcglone11) January 29, 2022
Bitcoin’s lockstep trading with stocks
The analyst’s projections come at a time when crypto markets have traded more in lockstep with traditional financial markets.
Since the start of the year, Bitcoin price has fallen and bounced in tandem with returns on Wall Street, with sentiment seemingly hinged on the US Federal Reserve’s hawkish tilt amid rising inflation.
Bitcoin price has bounced from this week’s low of $33,000 to highs of $38,780 on 30 January, its weekly gains currently at 8%. Ether (ETH) has also rebounded from seven-day lows of $2,200 to trade around $2,600.
The weekend uptick comes after similar recoveries on Wall Street on Friday. The Nasdaq closed 3% higher and the S&P 500 edged +2.4% to claw back some of the weekly losses.