Despite a massive drawdown in May, the Bitcoin (BTC) bull market appears to be intact, with a $100,000 price target more likely than a retrace to $20,000, according to Mike McGlone, Bloomberg’s senior commodity strategist. 

$20,000 or $100,000 in 2021?

The June edition of the Bloomberg Galaxy Crypto Index report described Bitcoin as "stronger, greener and less extended" than during the height of the rally in April. For that reason, the flagship digital currency is more likely to reach the coveted six-figure mark this year than incur a deeper correction back down to 2017 highs.

McGlone cited an overextended rally, Chinese restrictions and unwarranted focus on Bitcoin’s energy use as the primary catalysts for the May correction, which included a more than 50% drawdown peak-to-trough.

“Bitcoin’s 2021 Foundation Is Firm,” McGlone wrote, adding:

“Toward the end of 2020, Bitcoin's history suggested the crypto would move sharply higher in 2021, and we see improving supports for this.”

He continued:

“In 2020, 260-day volatility dropped to its lowest ever vs. most major asset classes, notably the S&P 500. Add last year's supply cut, the migration to institutional portfolios, Ethereum futures and the launch of ETFs in Canada and Europe, and we see greater potential for Bitcoin to head toward $100,000 than sustain below $20,000.”

Analysts remain divided

Still, analysts are divided about BTC’s trajectory in the short to intermediate timeframes. Several theorists are forecasting a retest of its 2017 high, with at least one classic indicator predicting a bottom of around $16,000. Others, such as on-chain analyst Willy Woo, have said the bottom is likely in thanks to improving network fundamentals and higher adoption rates.

Veteran trader Peter Brandt has speculated that the worst of the BTC price correction may not be over, but he told his Twitter followers that it’s not wise to bail if they’re holding spot positions:

Cycle theorist Bob Loukas believes there’s a good chance that BTC's price bottomed last month, but he did warn of an intermediate downtrend over the next 60 days. “Intermediate trend is now down,” Loukas tweeted on May 27. “But secular bull trend providing counter balance.”

Nevertheless, he acknowledged the potential for downside risk exposing the $20,000 handle, noting the difficulty of trading without a clear trend in place.