Bitcoin may be well off its mid-December peak of $19,511, but it will be touching new highs again by July, according to Fundstrat Global Advisors LLC’s Tom Lee.
The world’s largest cryptocurrency tumbled 70% from its high on 18 December to the 6 February low, but has since recovered and is trading around the $10,000 level. That, Lee says, follows a pattern: Bitcoin bottoms are “V-shaped.”
Based on an analysis of the 22 corrections of 20% or more that the digital coin has seen since 2010, Lee determined that in “bull” periods, Bitcoin takes about 1.7 times the duration of its decline to recover. That time frame implies that it will take 85 days for the cryptocurrency to fully bounce back from its latest plunge, which lasted for 50 days—meaning it should rise to fresh records by midyear.
Lee said that he’s seen sentiment toward bitcoin improve in the past few weeks, signalling that crypto investors are still bullish and there is upside for the digital asset.
“This recent 70% decline is severe,” he wrote. “We can see a case for bitcoin’s resilience here given the sharpness of the recent decline.” Bloomberg