It would be fair to say that Bitcoin didn’t perform too well in March. For those who have been living under a rock, the cryptocurrency shed more than 50 percent of its value on Mar. 12 and 13, plunging from a price just shy of $8,000 to lows at $3,800 in a dramatic fashion, liquidating over $1 billion worth of long positions in the process.
Even after the recent recovery we’ve seen, Bitcoin remains 51 percent lower than the $13,800 high seen at the end of June in 2019, which many thought would kickstart the next parabolic growth phase for our favorite orange coin.
With that in mind, the obvious answer to the question “Is Bitcoin in a bull or bear market?” is seemingly the latter, the bear market option.
Though, according to a top Bloomberg analyst, Mike McGlone of the commodities desk, the asset is actually in a “consolidating bull market” rather than a full-blown bear market, similar to the one seen in 2018.
Here are four reasons why he thinks so.
Reason #1: Growing futures volume & options trading suggests “more mainstream adoption”
Despite the recent decline in volumes seen in the Bitcoin futures market, McGlone suggested that the “advent of listed futures” and options trading, which have been adopted as evident by the open interest and volume metrics, are “key for the nascent digital asset with limited supply.”
He added that due to the nature of futures, these derivatives are likely to “pressuring volatility [lower]” while “buoying prices,” as the increased demand for the scarce asset is likely to increase its price just going off simple supply-demand dynamics. As McGlone wrote:
“Limited supply points to demand and adoption as the primary price determinants for the benchmark crypto.”