‘Once bitten, twice shy’ may be truer than ever in the Bitcoin world.
2018’s ‘Crypto Winter’ saw a painful bear market erase much of the gains of 2017 — and investors felt the pain as prices plummeted.
Tom Lee, managing partner and head of research at Fundstrat Global Advisors, says that’s about to change. His firm sees eleven signs that Bitcoin (BTC) has turned bullish for the long run. In fact, it’s so confident, Lee is predicting all-time high (ATH) prices in 2020.
Tom Lee Has A Sketchy Track Record of Bitcoin Predictions
Lee hasn’t had the greatest luck with price predictions. His suggestion in early 2018 that Bitcoin would hit $25,000 by the end of the year was wildly wrong — so why trust him now?
Previous predictions were built on Bitcoin market euphoria. More recently, such predictions have a stronger fundamental backing.
Firstly, Lee claims that an increase in transaction volume on the Bitcoin blockchain is a sign of bullish things to come. Most of the new transactions are coming from locations where national currencies are falling apart — like Venezuela and Turkey. Increased transactions mean increased demand, which is often a sure sign of growth.
On a purely technical level, Bitcoin crossed its 200-day moving average. This is an almost universally-accepted technical indicator of bull activity. With this came a ‘golden cross’ — the nickname for when the 50-day moving average overtakes the 200-day moving average. This is also a notoriously bullish signal.
The other eight signs all stem from Fundstrat research. These include larger buy orders from over the counter services, decreasing supplies, and a general consensus among early adopters. Taken together, the signs indicate that the market seems to have reversed.
These indicators are all entirely independent of the Bitfinex debacle that unfolded late last week, as the New York Attorney General’s office filed charges against the exchange and its stablecoin Tether (USDT). Bitcoin, in spite of the related negative news, remained strongly stable above $5,000.
This ability to weather negative news with strength lends further credence to Lee’s suggestion. While it may be another pipe dream, all the signs indicate that (this time) Lee is right. Whether Bitcoin will hit new all-time highs within a year remains to be seen — but the bulls seem to have returned.
Do you think Tom Lee is right and the Bitcoin bulls are back, or is there still more pain to come as the market seeks to find stability? Let us know in the comments below!