On Sunday (May 19), Thomas Lee, Co-Founder, Managing Partner and the Head of Research at independent research boutique Fundstrat Global Advisors explained why his firm believes that certain events that have occurred over the past six months "confirm" that crypto winter is over.
This is the tweet that Lee posted yesterday:
After a disturbing pullback to ~$6,200, #Bitcoin back >$8,000 further cementing positive trend intact.— Thomas Lee (@fundstrat) May 19, 2019
As we said a few weeks ago, Consensus 2019 @coindesk was to prove whether crypto winter is over...
Although all of the 13 "signals" that are mentioned in Lee's tweet are interesting, in this article we are going to focus on those that we have seen during the past month or so (i.e. since mid April 2019), which means items 7–13 in Lee's list.
Adamant Capital's "Bitcoin in Heavy Accumulation" Report
Here are some of main conclusions:
- Bitcoin is in the last stage of the bear market, i.e. the "accumulation phase." More specifically, their analysis of the Bitcoin blockchain shows that "Bitcoin HODLers are committing for the long term again."
- Bitcoin's fundamentals are improving as it gets embraced by both millennials, who tend to like disruptive technologies, and institutional investors, many of whom see Bitcoin as "an uncorrelated, highly liquid financial asset."
- Bitcoin has the most "favorable" long term risk-reward ratio of "any liquid investment in the world."
- We are going to "mass market adoption" of Bitcoin during the next five years.
Multiple OTC Brokers Reporting Surges in Trading Volumes
One example is Binance's OTC desk. On 17 April, Decrypt's Tim Copeland reported that, according to Binance CFO Wei Zhou, the "volume of over-the-counter Bitcoin trades" had "significantly risen" in April. The Binance CFO told Decrypt:
“Last month we saw a lot more volume than, say, three months ago. This was mainly due to the increase in price of Bitcoin and altcoins over the past few months. We’ve witnessed more trading activity—and demand."
Surge in On-Chain Activity
In a report published on May 6 (Volume 3, Issue 13), crypto research firm Diar had this to say about Bitcoin's on-chain activity:
"The number of transactions on-chain is also just shy of the all-time-high of December 2017. Since hitting a low in February of last year, month-on-month growth for the number of transactions has been clearly evident (see chart)."
As for Ether (ETH), this is what they said:
"776k Ether was transacted on DApps last month turning on-chain activity higher than the previous period for 4-months in a row. This year is the most prolonged period of growth in terms of transacted volumes DApps have witnessed, ever."
Willy Woo's Survey of Top Crypto Influencers, Analysts, and Traders
I surveyed notable influencers, analysts and traders for their probability that the bottom is in for this bear market. Here are the results:— Willy Woo (@woonomic) April 22, 2019
95% @woonomic (Adaptive Capital / On-chain Analyst)
90% @jespow (Kraken founder)
90% @arjunblj (Analyst)
85% @novogratz (Galaxy Digital)
Bitcoin's "Golden Cross"
As CryptoGlobe reported on April 23, this event, which had not been seen in around 3.5 years, was confirmed on that day.
Here is how Investopedia explains what a "golden cross" is and why it is significant:
"The golden cross is a candlestick pattern that is a bullish signal in which a relatively short-term moving average crosses above a long-term moving average. The golden cross is a bullish breakout pattern formed from a crossover involving a security's short-term moving average (such as the 15-day moving average) breaking above its long-term moving average (such as the 50-day moving average) or resistance level. As long-term indicators carry more weight, the golden cross indicates a bull market on the horizon and is reinforced by high trading volumes."
A "classic" golden cross is defined as one "when the 200 and 50 day moving averages cross, with the 50 crossing above the 200," and indeed this is what happened on April 23.
Market's Calm Reaction to New York Attorney General's Court Order Agaist Bitfinex and Tether
As you probably know, on Thursday (April 25), New York Attorney General ("NYAG") Letitia James issued a press release to announce that her office had obtained a court order against iFinex (the operator of Bitfinex) and Tether Limited (the issuer of stablecoin Tether) "enjoining" the two firms "from further violations of New York law in connection with an ongoing activities that may have defrauded New York investors that trade in virtual or 'crypto' currency."
Consensus 2019 Conference
The Consensus 2019 conference (May 13–15 in New York City) delivered several pieces of good news, two of which are listed below:
- Crypto payment network Flexa announced that via a partnership with the Winklevoss Twins' digital asset exchange Gemini it was able to bring the "limited launch of its network and mobile app to enable instant cryptocurrency payments in stores and online for several retail merchants." These merchants include Amazon’s Whole Foods and Barnes & Noble. Flexa said that its new SPEDN mobile wallet app would allow merchants to "easily accept bitcoin, ether, Bitcoin Cash, and the Gemini dollar."
- Kelly Loeffler, the CEO of Bakkt announced that Bakkt is working with its customers "over the next several weeks to prepare for user acceptance testing (UAT) for futures and custody" (expected to start in July).
Chart Courtesy of Diar Research