Bitcoin is back, according to the long time bull Tom Lee.
Despite the fall of the crypto course in early Friday trading – a symptom of concerns about the legitimacy of another digital currency called tether – it goes higher and may even be in a Bull market already, Lee CNBC says.
"Last year was a terrible year for crypto, a massive bear market, and we published a piece this week just emphasizing … 11 characters historically just happening in a bull market. So I think the evidence is about to come up for it to be a beef market, "Lee, managing partner and research manager at Fundstrat Global Advisors, said Thursday about" Futures Now. "
Of the 1
The first sign came in January when Lee's team noticed that the block chain's trading volume – a technology that ever used to buy and sell bitcoin – became positive year over year. This force was helped by turmoil in Venezuela and Turkey, where people lose faith in their country's currencies, may have turned to bitcoin as an alternative, Lee explained.
"Just taking the two countries, they are close to 30% of the increase in chain activity, so it's meaningful," he said. "People say," Look, I don't trust using these local currencies. I don't trust the banks. I'll start using bitcoin. "And that's what causes the volume of the chains to really get rid of."
The second sign came in April, when bitcoin closed the 200-day moving average, a widely accepted technical indicator for bullish momentum.
The third character comes from a Fundstrat survey of over-the-counter brokers, which Lee said is "very important in terms of how institutional investors act crypto." They told the firm that the activity levels based on the number of clients had an increase of 60% to 70% and that the trade per customer increased.
"I think you see signs that basics are better, technicals are better, and now there is real activity of essentially crypto hodlers," Lee said, using an industry term that refers to people who keep cryptographic baskets rather than to trade or sell them.
Lee's eight other bullish signs include shrinking supplies; a turn to the positive of Fundrats Bitcoin Misery Index; consensus among "original" bitcoin bulls that the bottom is set for bitcoin; and a recent "golden cross" for bitcoin, or when the 50-day moving average takes over 200 days.
All this, he said, shows that bitcoin has not finished climbing, and that these catalysts are "likely" to drive it to new all-time heights "around" 2020.
Lee, who predicted The 2019 bitcoin market in March, added that the standard deviation of the crypto curve from S & P 500 – which is about 2.5 this year – could also help push it higher.
"One thing to keep in mind is when S & P has made a big move, … it has almost always led to a big move in crypto later this year," he said. "So I think … a 2.5 standard deviation for bitcoin will take it to $ 14,000. I'm not saying that's where it should go, but it's the size of the movement that would be a capture."
Bitcoin traded on a wide range Friday due to weakness in the broader crypto competition market, settling in about $ 5,100 per coin area. Lee noted in a Friday call with CNBC that tethers problems have no "big effect on bitcoin", since most are "long tongs because [they] will not be long bitcoin."