Managing partner and head of research at Fundstrat Global Advisors, Tom Lee has predicted that another bull run is about to kick in for Bitcoin which will see the cryptocurrency reach new highs by 2020.
Lee, who made this assertion while speaking on CNBC noted that despite the pullback that Bitcoin experienced last Friday – which saw it trade close to $5,100 – it is bound to go higher, and may even be in the bull run already.
The reason for Tom Lee’s prediction is a combination of positive signs from 11 key indicators that suggest that the “crypto winter” is over. However, out of the entire pack, three indicators that stand out for Lee are those surrounding:
An observation by Lee’s team in January 2019 reflected a YOY positive turnover on trading volume across blockchain platforms. The economic instability in Venezuela and Turkey were identified to have played key roles towards the surge in the use of blockchain systems for transactions. As citizens of these nations lost confidence in the national currencies, blockchain served as a reliable alternative for them.
In April 2019, Bitcoin closed above the 200-day moving average in a move that most people regard as a confirmation of a trend reversal. This is the second indicator upon which Tom Lee upholds his prediction. Trading above the 200-day moving average is widely accepted in the industry as a bullish momentum.
Increased activity across Over The Counter (OTC) platforms, as observed by Tom Lee’s Fundstrat is another pointer towards a bullish market. This is because the OTC secondary market is seen as the activity spot for institutional investors. Therefore, increased activity in this sector implies that there is more participation from these class of participants.
Based on a report by Lee’s team, activity levels for this group, based on the number of clients saw a 60% to 70% increase and trading volume per client also went up.
“I think you’re seeing signs that fundamentals are improving, technicals are improving, and now there’s real activity by, essentially, crypto hodlers”, said Lee.
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