Recently, Bitcoin’s price formed higher lows and higher highs on its rising wedge pattern to signal a massive reversal. Additionally, Tom Lee, Fundstrat’s bitcoin analysts maintained his prediction, stating that the coin’s price could end the year explosively higher.
According to the daily chart, the 100 SMA is above the longer-term 200 SMA, to signal that the path of least resistance is to the upside. As such, the current bullish trend is more likely to continue than the reverse. A break above the $6,500 support may lead to a massive reversal towards $7,000 and above.
Tom Lee, the head of research at Fundstrat Global Advisors in an interview with CNBC, stated that it’s still possible for bitcoin’s price to reach $25,000 by the end of 2018. Lee based his prediction on the relationship between bitcoin’s price and BlackRock’s Ishares MSCI emerging markets exchange traded fund (ETF), which tracks large and mid-sized companies in emerging markets. He stated that both markets are running parallel to each other since they peaked and dropped at the same time of the year.
Further, Lee pointed out two factors connecting the two indicators. One is the hedge funds which usually rent emerging market stocks. The hedge funds risk on and risk off, and when they risk off, bitcoin also experiences the same. Second is the wealth effect; the impact of the stock activity on bitcoin buying. When people who invested in emerging markets experienced a fallout, they had no money to invest in the digital currency. As such, since there is a change in direction in emerging markets, the same may happen for bitcoin.
Therefore, bitcoin’s price may rise again, as predicted by key figures such as Lee, amid the fear of a cryptocurrency collapse after bitcoin and its rivals saw values plummet.
Do you support Tom Lee’s views regarding bitcoin’s price? If so, what’s your take on the coin’s future price?
Share your views in the comments section below
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