Tom Lee explains why he thinks Bitcoin could hit $40,000 by year end

04 Jul, 2019 | Updated: 04 Jul, 2019
by Richard Allen
Interview
Tom Lee explains why he thinks Bitcoin could hit $40,000 by year end

Since April this year, Bitcoin has been on rather a wild ride, pumping from $4,100 to almost $14,000, grabbing the attention of mainstream media and piquing public interest. The sentiment, however, is still mixed but Fundstrat’s Tom Lee explains why he’s bullish on Bitcoin.

During a recent interview, Tom Lee elaborates on a statement he made recently where if Bitcoin can find support at $10,000, it’s very likely we’ll see it rise to $40,000 by the end of 2019.

“This year has been a cascade of things that have reinforced that crypto winter is over. I think the first, most important thing was Bitcoin reattained its 200-day moving average,” Lee said. “And in its ten-year history, whenever it's above its 200 day, its price return is 10 times better than when it’s below its 200 day. And then we had the golden cross, the 50 day crossed above the 200 day.”

Lee then provides a little more insight into the importance of the $10,000 level, saying $10,000 “represented a price that Bitcoin’s only traded at in 3% of its history. So if you look at the prior cycles, anytime Bitcoin gets into that rare range, like when it's only traded in 3% of its history, a type of FOMO kicks in. And I think we saw that dynamic because as soon as we broke above $10,000, we almost went straight to $14,000.”

He then states that once you break above that 3%, Bitcoin generally sees a surge of 200% to 400% over the next four months which would bring it to about $40,000. 

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