Fundstrat Global Advisors co-founder Tom Lee, the only Wall Street Strategist covering Bitcoin, recently created a chart that shows the flagship cryptocurrency surge to $91,000 by March 2020. The strategist, as covered by Core Media, has in the past stated that Bitcoin would hit $20,000 by mid-2018, and $25,000 by the end of the year.
As reported by Forbes, Fundstrat and Tom Lee have compiled a database on Bitcoin that helps visualize the cryptocurrency’s short-term and long-term trends. These include mining costs, trading trends, and technical analysis.
Lee’s new graph shows that the other four times Bitcoin saw its price fall by 70 percent or more, it experienced significant gains. Notably, the chart has a logarithmic scale, which shows Bitcoin’s movements as less pronounced than they would be if it were charted on a linear basis.
The chart essentially shows that once a bottom is formed, a bull run might ensure, one that will carry bitcoin to a $91,000 high by March 2020. Fundstrat’s strategy, according to Forbes, is to focus on established digital currencies, which could see others fail in the long run.
The fact that bitcoin has so far been able to bounce back from steep price drops doesn’t necessarily mean the same will keep on happening, the news outlet notes. The article reads:
“Just because a trend has occurred in the past (and looks very compelling on a chart) does not mean it will happen in the future.”
Technical indicators show Bitcoin is “a bit oversold”
Fundstrat further found that, upon analyzing Bitcoin’s technical indicators, they seem to show the cryptocurrency’s market is “a bit oversold.” The traditional RSI (Relative Strength Index) and the MACD (Moving Average Convergence/Divergence) were given as examples.However, Bitcoin’s price was somewhat low until 2017, meaning the RSI and MACD may not have enough data to be accurate, or as accurate as they would be if used in securities with longer track records.
Tom Lee has also created the Bitcoin Misery Index (BMI). The indicator takes various factors into account, including negative press and amount of successful trades. If the index is low, it's time to buy, as it is a contrarian indicator. It’s at its second lowest point in the past eight years.
Posted from my blog with SteemPress : https://cryptocoremedia.com/wall-street-strategists-bitcoin-91000/