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

A screenshot from McGlone'due south latest analysis on the flagship cryptocurrency, showtime shared by Bloomberg senior ETF annotator Eric Balchunas, shows him comparison Bitcoin's ongoing cost activity with the "too-cold" period of the 2018–2019 trading session.

In item, the BTC/USD substitution charge per unit entered a prolonged consolidation period near $4,000 following an 80%-plus crash in 2018, merely a sudden run-up in 2019 sent its prices to as high as $xiv,000 on some exchanges.

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

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

The moving boilerplate trio

Bitcoin's bearish and bullish cycles appear to wobble around three central moving average indicators: the 20-calendar week exponential moving boilerplate (xx-week EMA; the green wave), which serves every bit acting support/resistance, the 50-calendar week unproblematic moving boilerplate (fifty-week SMA; the blue wave), and the 200-week simple moving average (xx-week SMA; the orangish wave).

Bitcoin bear trends tend to exhaust after BTC price tests the 200-mean solar day simple moving boilerplate equally resistance. Source: TradingView

During bull trends, Bitcoin prices typically stay above the 3 moving averages. Meanwhile, bear trends see the cryptocurrency'due south prices closing below the twenty-week EMA and the fifty-week SMA, as shown in the chart higher up.

The 200-calendar week SMA typically serves as the last line of defense in a bear market. And then far, Bitcoin has bottomed out twice nigh the orange wave, each fourth dimension sending the prices explosively higher. For instance, a take-off from the 200-week SMA in 2018 drove Bitcoin prices to about $fourteen,000.

Similarly, the wave support capped the cryptocurrency'due south downside attempts during the COVID-nineteen-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 cleaved beneath the xx-week SMA (most $39,000) and is now targeting the fifty-week SMA (circa $32,200) as support. If the old fractal is repeated, it should continue falling toward the 200-week SMA (around $fourteen,000).

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

Tether takes the cake

Beijing announced a complete ban on cryptocurrency operations in May. The conclusion stonewalled the mining operations in the country, which were forced to either stop or movement their base outside. Bitcoin prices fell sharply in response.

However, McGlone highlighted Mainland china's rejection of open-source software crypto assets as a plateau in their economical ascension. In a tweet published Friday, the analyst attached an index showcasing booming volumes and capitalization of U.S. dollar-backed digital avails, including Tether (USDT).

He then pitted the ascension demand for digitized dollars against the Chinese yuan-to-dollar exchange rates, noting that the logarithmic calibration of market capitalization fluctuations betwixt the two fiat currencies was beneath the baseline zero betwixt 2018 and 2020. That means the yuan was depreciating against the dollar.

Tether'southward appreciation against the U.South. dollar index and Chinese yuan. Source: Bloomberg Intelligence

The calibration just went back higher up nil, signaling interim growth for the yuan confronting the dollar. Merely its uptrend still appeared dwarfed by Tether, whose market cap rose past more than than twoscore% above the baseline. McGlone noted:

"China's rejection of open-source software crypto-avails may mark a plateau in the country'southward economical ascent, we believe while extolling the value of the U.South. dollar and Bitcoin."

Additionally, Petr Kozyakov, co-founder and CEO of global payment network Mercuryo, noted that while the United States government has not officially launched a key bank-backed digital dollar as China has, the availability of many other alternatives — including Tether, USD Coin (USDC) and Binance USD (BUSD) — could pose a claiming to the Chinese-controlled digital yuan.

"These cryptocurrencies are pegged 1:one confronting the U.S. dollar and as shown in the chart McGlone shared, the dollar is leading the digital rise over the Chinese Yuan," Kozyakov said.

"While Red china'due south crackdown has had an impact on Bitcoin'due south price as it hovers above $30K on 23rd June, fundamentals take improved vastly since 2018 due to institutional FOMO. [...] Bitcoin should recover to $50K by the plow of the year."

The Chinese economic system will keep growing

Nevertheless, rejecting McGlone's take, Yuriy Mazur of CEX.IO Banker noted that the Chinese economy should continue flourishing with or without cryptocurrencies, saying that it has nothing to exercise with the demand for digital assets.

Related: US–People's republic of china trade war and its upshot on cryptocurrencies

"The Chinese regime is too smart to miss out on something the world deems valuable," Mazur told Cointelegraph.

"So, expect them to take considerable measures to roll out a Yuan-backed cryptocurrency (in the future) that they accept consummate control over."

The views and opinions expressed hither are solely those of the writer and do not necessarily reflect the views of Cointelegraph. Every investment and trading motion involves risk, and you should conduct your own inquiry when making a decision.