Tom Lee: "Bitcoin will stage a pretty big recovery sometime this year"

20 Apr, 2019 | Updated: 20 Apr, 2019
by Richard Allen
Opinion
Tom Lee: Bitcoin will stage a pretty big recovery sometime this year

During a recent interview with CoinTelegraph, head of research at Fundstrat, Tom Lee stated that Bitcoin is likely to "stage a pretty big recovery” in the coming months.

Lee began with the Bitcoin Misery Index (BMI), an indicator developed by his firm. The Fundstrat co-founder explained that the Misery Index is designed to track the sentiment of a crypto holder by analyzing several factors. He goes on to say that the most recent reading was 89 (signifying a very happy sentiment), which is the highest its been in “more than a few years.”

Lee explains that since 2011, a misery index of over 67 has never taken place during a bear market. Based on this, and the fact that the index is reading above 67 “means that a bull market is likely starting.” However, when the reading gets to the 90’s Lee explains that six out of six times Bitcoin fell by 25% on average as investors cash out. With that being said, Lee made it clear that even if a drop is incoming, it’s not an extension of the bear market.

Lee then made reference to Bitcoin surpassing its 200-day moving average. The reason for this is because “in any market, people tend to think an instrument or an asset is in a positive trend when it’s above its 200-day.” According to Lee, this means Bitcoin’s recovery is “taking place a lot faster than we would have expected, and it maybe means that the price recovery cycle won't be any different than in the past.”

Expanding on this, Lee explains that given cryptocurrency’s relatively small size, “it makes more sense for the cycles to be similar and Bitcoin will stage a pretty big recovery starting sometime this year and easily recover to new highs, exceed all highs and then how far it goes is the unknown.”

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