SOURCE OF POST LINK

Fundstrat’s Tom Lee is making a bullish call on bitcoin in the next two years, suggesting that the latest 70% drop actually bodes well for the future BTC price.

The head of research at the New York-based market research firm predicts that based on historical trading patterns, the bitcoin price could reach $91,000 by March 28, 2020. To illustrate his point, Lee and his team have developed a robust database on bitcoin comprised of charts and graphs that identify trends for the top digital coin over both the short- and long-term durations.

For instance, Fundstrat’s bitcoin misery index, a contrarian barometer that debuted earlier this month, is at 18, its lowest point since 2011, which is a bullish sign for the future price of bitcoin.

Fundstrat’s Lee isn’t deterred by bitcoin’s 70% decline, saying instead that bitcoin remains in a “bull market phase.” In fact, it’s not the first time the bitcoin price has shed this much or more. Similar losses occurred over stretches in 2011 and again in 2013 and could actually be a harbinger of profits.

Lee points to a previous 70% sell-off in the BTC price over a four-month stretch in 2013 that preceded what the firm describes as a “monster rally” in which bitcoin generated what appears to be unparalleled returns. Here’s the chart, courtesy of Fundstrat (as Forbes points out, Fundstrat’s “logarithmic scale” isn’t as dramatic as the typical linear chart)

There’s more. Bitcoin has also exhibited similar trading patterns of the past in that its downside volatility has been greater than its upside performance. For instance, the BTC price has advanced 37% in the latest three-month stretch compared to an eight-year average of 38%. Fundstrat explains:

“The lack of up days is not particularly unusual for Bitcoin. But it is down from 2017, when this figure peaked at 56%.”

Fundstrat’s bullish forecast extends to other leading cryptocurrencies, including ETH in 2018, which in addition to BTC will benefit from “larger and more established blockchains growing in dominance” this year, according to the Fundstrat report. Meanwhile, Forbes suggests there will be a separation of the wheat from the chaff, so to speak, with the leading coins capturing most of the investments.

History Repeats Itself?

While the Fundstrat charts clearly reveal patterns, there’s no way to tell for sure if history will repeat itself and the bitcoin price will rally once again to achieve $91,000 by 2020. As Forbes points out, regulators have the ability to interrupt any fundamental trading in the bitcoin price. Having said that, they also conclude that bitcoin is currently in an “oversold” state.

Follow us on

Youtube
Twitter
Facebook
Page
steemit
Dailymotion