Tom Lee of Fundstrat Global Advisors has once again given cryptocurrency market predictions. The long-term Bitcoin bull stated earlier that sentiment will once again turn positive during 2019.
Lee draws on technical, macro, and fundamental indicators to make these conclusions. However, we all know that he has been wrong on more than one occasion when it comes to Bitcoin price.
Tom Lee: Bitcoin Cash “Fork Wars” Terrible for Investor Confidence
Tom Lee, the co-founder of Fundstrat Global Advisors appeared earlier today on a CNBC segment titled, “Futures Now”. There, he was asked about his outlook for the Bitcoin (BTC) and general cryptocurrency markets.
Lee opined that 2019 was a year of “repair” for BTC. He stated that the Bitcoin Cash hard fork and the subsequent “fork wars” as he refers to threats made by Craig S. Wright to 51% attack the Bitcoin ABC side of the split out of existence had been massively detrimental for investor confidence.
During the so-called “fork wars”, the price of Bitcoin dropped steeply from the low $6,000 range it had held for many weeks down to just above $3,000. Lee therefore expects this range to serve as massive resistance on the way back up.
The conversation then turned briefly to Venezuela. Lee pointed out that people there were starting to use cryptocurrency thanks to the hyper-inflated bolivar:
“Turmoil is causing adoption to grow.”
Lee: JPM Coin is No Competition for Bitcoin
When going through the various positive factors that would boost the Bitcoin price when sentiment finally improved, Lee mentioned the launch of digital currencies by some of the planet’s largest financial institutionsand companies. This prompted a question about whether such centralised digital assets posed a threat to Bitcoin’s value proposition. The research analyst replied that he did not think that it represented competition and that Bitcoin would remain at the centre of the digital currency universe:
“It’s not a threat to Bitcoin because it doesn’t offer upside but it probably makes other stable-coin projects less useful… Bitcoin is essentially starting to look like a reserve currency for digital currencies in general.”
Finally, Lee was pushed for a timeline for market sentiment to improve. The Fundstrat co-founder stated that he felt it needed perhaps five or six months more to recover from the plunge into the $3,000-4,000 range, which he attributes to the Bitcoin Cash fork last year.
It is worth remembering that Tom Lee has been spectacularly wrong about BTC price predictions in the past. He spent most of 2018 calling for BTC to exceed its previous all-time high set at the end of 2017. This, of course, never happened. His new outlook appears more measured by contrast and the analyst has been aloof from giving precise figures this time round too.
Bitcoin Correction to $9,500 Could Be Followed by 20% Drop: Analyst
Bitcoin (BTC) has been absolutely slammed over the past week. Since passing above $13,000 for the second time this year last Wednesday, the crypto has been on a clearly downward-sloping trend.
In fact, as of the time of writing this article, Bitcoin has lost 25% in the past week, falling to as low as $9,300.
Despite the fact that optimists are expecting for bulls to experience some form of short-term reprieve, historical trends and other key indicators predict a further unwinding of the cryptocurrency bull market.
Bitcoin Poised to Hit $7,500
Conceptualized by Trace Mayer, an early Bitcoin investor and funder of Kraken, the Mayer Multiple is a way of determining if BTC is either overbought, fairly valued, or oversold. It is calculated by putting the asset’s current price over its 200-day moving average.
Per an analysis of this indicator (currently sits at 1.6) by CryptoKea, a little-known analyst that accurately called the recent drop to at least $9,700 earlier this month, if you consider the Multiple, the ongoing correction looks much like the first “major correction” of 2017’s bull run.
He notes that if history repeats itself and Bitcoin reverses out of its current short-term bearish trend like it did in 2012 and 2017, it could find support anywhere from $7,148 to $8,700. This corresponds to 1.20 times to 1.46 times of the 200-day moving average, which currently sits at $5,957.
Most likely, however, Kea notes that the “most probable target” as per the use of the Mayer Multiple will be $7,505 — another 20% drop from the current Bitcoin price of $9,600.
This somewhat lines up with the target of $8,000 that other analysts hold. Per previous reports from NewsBTC, Timothy Peterson, a prominent American crypto fund manager, notes that Bitcoin’s current active account figure suggests that BTC is overvalued.
According to Peterson’s model, which takes a 30-day median (as of July 13th) of the number of active accounts on the Bitcoin blockchain, BTC currently has a fair valuation of just above $8,000.
In a tweet issued on Saturday, Josh Rager, a prominent technical analyst and cryptocurrency commentator, looked to this same level. View image on Twitter
Rager notes that a “confluence” of chart data and on-chain data suggests that a pullback “would likely bottom out at $8,000”. As he explained in the chart above, $8,000 acted as a key horizontal support and resistance level in the recent rally and 2018’s crash.
What’s more, there is also a CME Bitcoin futures gap around $8,500, which is one of the last gaps waiting to be filled.
And as Alfonso Esparza, senior market analyst at Oanda Corp, recently told Bloomberg: “[Bitcoin] continues to trade lower as comments from President Trump put downward pressure on the cryptocurrency. It could fall further to $8,000, giving back all the gains made in June.”
Drop Might be Over?
Despite this, one analyst believes that the drop is most likely over. In fact, he drew attention to almost five signs why this may very well be the case, even if it sounds crazy.
Firstly, the one-day Relative Strength Index (RSI) and the Stochastic iteration of this indicator are at their lowest levels since at least February, entering the “oversold” range. The one-day Moving Average Convergence Divergence (MACD) has tapped the zero level, despite the fact that Bitcoin is in a raging bull market according to most analysis.
Also, the Elder’s Forse Index, an indicator meant to exhibit the strength of moves, is at its lowest since November 2018; and historical volatility is almost at 100%, implying a move to the upside to return volatility to levels deemed normal.
Bitcoin Network Is Moving $3 Billion Daily, Up 210% Since April
Bitcoin’s average transaction volume is topping $3 billion per day, data from crypto analytics site Coinmetrics.io reveals as of July 16.
Bitcoin’s Uptrend in Daily Transaction Value Eclipsing Altcoins’
The data — which has been adjusted to remove noise and certain artifacts, per Coinmetrics — shows an impressive uptrend in the USD value for the volume of the coin’s transactions and transfers over the past 90 days.
On April 17, the average daily value was at $1.04 billion as compared with $3.22 billion on July 16, an almost 210% increase.
The top coin has seen a significantly higher spike in volume as compared with ether (ETH), which saw a 77% increase over the same time period — from a daily average of $370 million to $657 million. XRP has seen a still milder uptrend, at 61% — with the value of daily transactions climbing from $152.5 million in mid-April to $245.6 in mid-July.
3-month chart for BTC transactions, transfers, value, adjusted, in USD. Source: Coinmetrics.io
Bitcoin broke the $3 billion daily average mark on July 11, Coinmetrics’ data shows, when the coin was circling the $11,500 price point. Despite trading roughly $2,000 lower as of today — having taken a steep 11.4% hit on the day and over 24% on the week — average daily transaction value has continued to climb.
Commentators have today argued that the coin’s short-term downtrend was triggered by an antagonistic response from the United States government to Facebook’s Libra coin, which has extended to the cryptocurrency space more broadly.
Veteran trader Peter Brandt anticipates that total market cap could now correct by as much as 80% — yet argues that most of the damage will be shouldered by altcoins, not Bitcoin.
On July 7, Cointelegraph reported that Bitcoin’s hash rate had hit a new all-time high of 65.87 EH/s. Nevertheless, despite the week’s price fluctuations, this figure has continued to soar north, reaching almost 73 EH/s to press time.
Bitcoin (BTC/USD) forecast and analysis on July 17, 2019
Cryptocurrency Bitcoin (BTC/USD) is trading at 10835. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates a bearish trend on Bitcoin. At the moment, cryptocurrency quotes are moving near the middle border of the Bollinger Bands indicator.
Bitcoin (BTC/USD) forecast and analysis on July 17, 2019
As part of the Bitcoin exchange rate forecast, the test is expected to be at the level of 11250. Where should we expect an attempt to continue the fall of BTC/USD and the further development of the downward trend. The purpose of this movement is the area near the level of 9450. The conservative area for selling Bitcoin is located near the upper border of the Bollinger Bands indicator at the level of 11950.
Cancellation of the option to continue the decline in Bitcoin will be the breakdown of the area of the upper border of the Bollinger Bands indicator. As well as the moving average with a period of 55 and closing of quotations of the pair above the area of 12100. This will indicate a change in the current trend in favor of the bullish for BTC/USD. In case of a breakdown of the lower border of the Bollinger Bands indicator bands, one should expect an acceleration of the fall of the cryptocurrency.
Bitcoin (BTC/USD) forecast and analysis on July 17, 2019 implies a test level of 11250. Further, it is expected to continue falling to the area below the level of 9450. The conservative area for selling Bitcoin is located area of 11950. Canceling the option of falling cryptocurrency will be a breakdown of the level of 12100. In this case, we can expect continuation growth.