As Bitcoin and cryptocurrencies in general make strides when it comes to global adoption, all the eyes are closely watching the evolution of their price. After all, it is one of the primary factors that will attract or scare off investors in the short, medium, and long terms. In the same vein, markets have been alternating periods of stability with steep declines in value for months.
The whole community is monitoring Bitcoin’s price to see if it gains momentum and finally establishes a floor over the $4,000 threshold; one that it has failed to surpass for good after the market crashed following Bitcoin Cash hard fork in mid-November.
Breaking a Tradition
And while he technically broke a tradition while doing so, famous crypto personality and Fundstrat Global Advisors co-founder Thomas Lee forecasted that Bitcoin price can welcome back the bulls in six months from now. He made the prediction on Thursday, March 14th, to CNBC.
Lee observed, in an interview with CNBC, that the month of August could be the moment in which Bitcoin’s price starts showing sustainable signs of life. Lee is a Bitcoin bull, but he said, in December, that he would refrain himself from providing his insight about a possible date for a price U-turn.
The 200-day Moving Average: the Crucial Indicator
In the process, Lee made it clear that a specific indicator is the crucial one to monitor in the coming weeks or months, in order to identify if a price rebound is plausible or not. “I think the key number to watch is the 200-day moving average,” he told the network during the brief encounter.
“If Bitcoin holds above $4,000, it’ll cross its 200-day [moving average] by August, so I think the outside window is five to six months before Bitcoin starts to look technically like it’s back in a bull market,” he said, providing a glimpse of optimism to an industry that needs it.
As the moment of writing this piece, Bitcoin was exchanging hands at $3,989.74, just about to break the necessary and elusive $4,000 barrier. The number represents a 1.53 % increase in the last 24 hours, with the last day’s trading volume at $9,804,410,675. The total market cap of the world’s most valuable digital asset is $70,182,928,079.
Since the start of 2018, when it peaked at nearly $20,000, Bitcoin has been steadily losing value with each passing month. And just when it seemed like it had found some sustained stability, the events of November 14-15 unfolded and then it started to collapse yet again, falling as low as $3,200 and failing to truly recover ever since.
Damage to be Repaired
About the dreaded BCH hard fork of November 2018, Lee expressed that “I think the damage that really needs to be repaired is that drop from $6,000 to $3,100,” suggesting that it had a devastating effect on the industry as a whole. “I think it really undermined investor confidence and the dynamics around the market.”
In a span of just over a year, Bitcoin went from more than $19,000 to slightly over $3,000, which can be considered the longest bear market in the history of the cryptocurrency. And there are two camps when trying to provide a market forecast: those who think it will turn around sooner rather than later, and those, like Tone Vays, who believe BTC can fall to around $1,000 before a bull market begins.
By Andres Chavez