Bitcoin’s Biggest Bull Is Still Bullish, New All-Time Highes Are Coming
Tom Lee Has Said It Again, Bitcoin Will Set A New All-Time High
Tom Lee, founder and chief market strategist at Fundstrat, has doubled-down on his Bitcoin prediction yet again. According to him Bitcoin is heading up to a new all-time higher, possibly this year, and the equity market is why. His prediction is that the S&P 500 will break out to new highs sometime this fall and that will spark a risk-on mentality for cryptocurrency. The idea is that, with the S&P 500 moving to new highs and the FOMC supportive of the economy, there will be plenty of liquidity and it will flow into the world’s leading assets.
Bitcoin has been wallowing for the last couple of months and that too is linked to the S&P 500, at least in Lee’s view. While I don’t see a direct correlation between U.S. equities and cryptocurrency I do agree that a rising tide will lift all boats. What I mean is, the same underlying fundamental conditions that drive risk on sentiment in equities, commodities and other volatile assets will also drive upside for Bitcoin.
Bitcoin’s movement over the last two weeks has been virtually flat. The world’s leading cryptocurrency continues to consolidate above the key support line of $9400 which is important. The $9400 line had been a strong point of resistance but resistance was worn down, a break-out occurred, $9400 became a pivot point and now it is strong support. Support can also be seen in Bitcoin’s hash-rate which just hit a new all-time high. The rise in hash-rate is a sign of confidence in the BTC market, an indication the number of holders is growing, and a long-term driver of BTC prices.
In the near-term, I see BTC moving back down to $9,400 where I expect to see support kick back in. Once the coin has reversed bullishly a move to the top of the narrowing range is likely, $10,500 is a good target. Longer-term, a move below support or above resistance would be a significant change in the market. A move lower below support could easily see BTC retrace back to $3000. A move up would break the narrowing the consolidation range and lead to a move higher.
The catalyst for prices I am really watching is the halvening. When BTC’s block-reward halvening gets close the price of BTC is going to get squeezed until it pops. At that time, I think a retest of the all-time high is the least of what’s to come. Bitcoin $30,000 becomes the next technical target when $20,000 is broken and when BTC is on the move those technical targets get wiped out pretty quickly.