There has been a changing sentiment lately regarding the crypto market. Bitcoin has been on the rise in the last months. In fact, despite the Tether shenanigan, Bitcoin has remained above $5,000. Many now believe that Bitcoin could actually come back to its bullish ways.
Longtime Bitcoin bull, Tom Lee is back. Lee who is the head of research for Fundstrat mentioned that “Last year was a terrible year for crypto, a massive bear market, and we published this week just highlighting…11 signs that historically only take place in a bull market. So I think the evidence is mounting that there’s a bull market”.
Signs of a Bullish Bitcoin?
He first noticed last January that trading volumes became positive year over year. There were a lot of things that may have contributed to the increase in trading volumes ranging from Venezuela’s economic problems to Turkey. And mainly, there are those countries that have relied on cryptocurrencies. He said that Turkey and Venezuela alone exhibited “close to 30% of the increase in on chain activity”. Lee also added that people’s distrust on banks may have led to the increase in the trading volume.
As for the second sign, Lee and his team noticed it in April when Bitcoin was able to close above its 200-day moving average. As for the third sign, Fundstrat had a survey of over-the-counter brokers. They noticed that the activity level based on the number of clients spiked up between 60% to 70%. Lee believes that it is an important indication for the involvement of institutional investors.
Among the signs that Lee mentioned is the shrinking supply. And also, recently, there was a report wherein a “golden cross” has been seen in Bitcoin. And because of all these things that he mentioned, he believes that there is a likelihood that we are going to see Bitcoin break its all-time high around 2020.
Could Lee Be Right?
This isn’t the first time that Tom Lee made a prediction. There were other incidences wherein he believed that Bitcoin was on its way to break the all-time record of near $20K level in 2017. Keep in mind that Bitcoin dropped a bit after the New York Secretary-General claimed that Bitfinex has been using Tether’s funds to cover up for its losses.
For Lee, he believes that Tether’s issues really don’t have “much effect on Bitcoin”. According to him, those who “long tether because (they) don’t want to be long Bitcoin”.
There is one sign though that could potentially sign flashes of a bearish market. Bitcoin’s RSI could potentially indicate that there will be large retraces soon. According to HornHairs who is a popular crypto analyst on Twitter, RSI divergences found on a two-day chart could potentially follow a large dip.
Now, could Bitcoin be ready to make a comeback? In reality, it is still too early to tell. There are a lot of things that still need work in the crypto market. For instance, there is a need for regulatory clarity still. Though there are efforts such as the bill that would clarify Bitcoin and other cryptos not as a security, these are some things that could take some time to become a reality.