Bitcoin Looks Bullish, According to Fundstrat
After 14 months of brutal bear market conditions, data and other pieces of evidence are finally starting to accentuate that Bitcoin bulls are taking control of the BTC price wheel once again. In a recent Twitter thread, Ken Xuan, a researcher at Fundstrat, noted that while there remains a “fairly high level of skepticism and apathy towards [the] recent recovery in crypto prices,” evidence is mounting that bulls are back in control, and more importantly, are preparing to kickstart a large rally to new heights.
Xuan notes that the Bitcoin Cash and Bitcoin SV fork wars have now exhausted, which is notable because the start of this debacle is what seemingly caused BTC to drop $6,000 to $3,000 in November and December of ’18. He adds that sentiment has begun to flip notably bullish, as seen with the Bitcoin Misery Index’s recent move past 67, the influx of on-chain accumulation of BTC, and a growing number of cheery tweets from market leaders, further hinting that the bottom is in. Case in point, it has been noted that the Misery Index readings of above 67 are only seen during bull markets.
This comes just days after Tom Lee, the co-founder and head of research at the New York-based group, further broke down Fundstrat’s current investment thesis on Bitcoin.
As reported by Ethereum World News previously, firstly, Lee looked to blockchain statistics, specifically that of Bitcoin. He explained that the transactional value of on-chain transfers has turned positive on a year-over-year basis, signifying that BTC is still seeing constant use for its intended purpose, in spite of the brutal conditions in the market. What’s even more positive is the fact that average daily transactions processed on the Bitcoin chain are reaching near-all-time highs, but that the fee market has yet to froth.
Secondly, the long-standing cryptocurrency optimist (who is also hopeful that traditional markets and emerging markets will do well too) looked to the fact that BTC has moved above and held on top of its 200-day simple moving average.
Throughout Bitcoin’s history, and the history of other liquid, tradable assets, the aforementioned technical level has been seen as a kind of ‘make or break’ point, in that holding above it signals that bulls have the upper hand.
Combine this with the fact that Bitcoin’s daily chart recently printed a golden cross, which saw the 50-day simple moving average cross over the 200-day, is another reason, in Lee’s eyes, that “spring” might finally be inbound for digital assets across the board.
Lastly, and arguably most importantly, is the growth in trading activity in cryptocurrency markets, especially over-the-counter (OTC) desks. Citing closed-door conversations, Lee explained:
“We surveyed OTC brokers, who are really important in facilitating institutional investors, and they’ve all talked about a 60% to 70% increase in activity/number of clients and trading volume per client. Fundamentals are improving; technicals are improving, and activity by HODLers too.”
Photo by Giovanni Calia on Unsplash
