Fundstrat Global Advisors’ Managing Partner and Chief Analyst Tom Lee said that the current Bitcoin price is giving a “huge bull signal”.
Tom Lee on Sudden Spike in Bitcoin Price
After a week of trading in the range between $6150 and $6750, Bitcoin (BTC) [coin_price] broke out, surging past $7000 in roughly around five minutes July 17, reaching highs above $7500 on some exchanges.
While many are still trying to figure out the exact catalyst of the sudden movement in the price of the largest cryptocurrency, Lee says it’s a combination of both TA and positive news.
Speaking to CNBC’s Fast Money, Bitcoin’s permabull says that the increase of price could be attributed to both factors. Lee:
Over the weekend there were quite a lot of folks who were talking about TA and the potential formation of either an inverse head or shoulders or a Wyckoff buy off so it sounds like the technical were really starting to become more favorable.
At the same time, though, he also doesn’t deny the impact of positive news on the price of Bitcoin. Speaking on the recent patent granted to MasterCard for increasing the speed of cryptocurrency payments, Fundstrat’s head analyst said:
I think something like the MasterCard news is positive because it’s really validating the idea that digital money or blockchain-based money is a valid form of transactions…
Current Price is a “Huge Bull Signal”
The current price point of the world’s first and foremost cryptocurrency is a massive bull signal according to the analyst. He notes that BTC trades roughly around 30 percent below its 200-day moving average.
“It turns out that that’s actually a pretty positive signal,” Lee said.
The reason for this is because it has happened a few times before – back in October 2011 and in December 2014. This leads to two majorly positive conclusions according to the permabull.
First off, Bitcoin has bottomed within a month of this price point in both situations. This suggests that the price has either reached its bottom or that we are nearing the end of a correction.
The second positive signal is that when “Bitcoin is trading 30 percent below its 200-day it’s a huge bull signal because … if you look forward six months you’re gonna do pretty well owning Bitcoin.”
What is more, Lee’s take on this is so confident that he says that one’s “probability of making money is over 90% within six months” if you buy BTC when it’s trading around 30 percent below its 200-day moving average.
Do you think we’ve already entered a bull run or are we about to see another serious pull back? Don’t hesitate to let us know in the comments below!
Images courtesy of Bitcoinist Archives; CoinMarketCap.