Tom Lee, the only major Wall Street strategist covering bitcoin and co-founder of Fundstrat Global Advisors, recently revealed that his analysis shows bitcoin will hit a new all-time high by July, if historical performance is to be trusted.
Bitcoin, the flagship cryptocurrency, saw its value plunge from a $19,300 December high to $6,900 in early February, according to data from CryptoCompare. The cryptocurrency is now up by 8.28 percent in the last 24-hour period, as it is currently trading at $10,078.
According to Tom Lee, bitcoin bottoms are “V-shaped,” and there’s a pattern in them. According to the strategist, an analysis of the 22 corrections of over 20 percent the cryptocurrency had since 2010, shows that in “bull” periods, bitcoin takes about 1.7-times the duration of the decline to recover.
As Lee puts it, this “implies that 85 days are needed to recover prior highs – this is July 2018.” The steep correction bitcoin recently endured lasted 50 days. According to some analysts, the correction was necessary for the market to consolidate, so it can then chase new highs.
“This recent 70% decline is severe. We can see a case for Bitcoin’s resilience here given the sharpness of the recent decline.”
Lee added that he’s seen sentiment toward bitcoin improve in the past few weeks, which further signals a bullish period may take it to a new all-time high. Part of the bullish sentiment for bitcoin is based on its resilience. Lee said:
Back in January, Tom Lee predicted bitcoin will hit $25,000 by the end of the year, and $125,000 by 2022. Lee’s framework to value the cryptocurrency, according to CNBC, takes into account money supply growth, the ratio of alternative currencies such as gold, and bitcoin’s share of those alternatives.
Late last year, Lee argued bitcoin was a good bet for millennials, as its value isn’t correlated to stocks, bonds or gold. He compares millennials’ acceptance of the cryptocurrency space, to the acceptance previous generations such as baby boomers had towards gold.
