On Tuesday (February 4), Thomas Lee, Co-Founder, Managing Partner, and Head of Research at independent research boutique Fundstrat Global Advisors, explained during an interview with Yahoo Finance why his company is "really optimistic on crypto and Bitcoin this year."
During this interview, Lee was asked by reporter Yahoo Finance reporter Emily McCormick what is next for Bitcoin.
Lee started by saying:
"So we're really optimistic on crypto and Bitcoin this year. You know, last year, Bitcoin was up almost 90% -- so the best performing asset class by a factor of three. And we think the return this year will be even stronger because you have some catalysts. You know, the halvening, which is upcoming... I think ... coronavirus and geopolitical tensions really improve the use case..."
He then went on to add:
"Enough times past where that post the starvation of capital like the space has not really seen any capital inflows... Only good projects are surviving now. So, there's actually a lot of interest in looking at what's still alive because these things actually have real progress and fundamental values. So ,I think it's a good time to look at crypto."
Lee then mentioned that although it is interesting that January was a great month for Bitcoin ("up 26%), what is perhaps even more noteworthy is that during that month Bitcoin also "recovered its 200-day moving average", which he considers "a big deal" since (according to technical analysis) this means that Bitcoin is "back in the bull market."
Finally, Lee came up with this price prediction for Bitcoin:
"Whenever Bitcoin breaks back into its 200-day, its average six-month gaini s 197%. So, we're sort of talking about potentially a levitation taking place."
"Yeah, 2020 should be great for Bitcoin because you got number one the halvening happening -- the block reward for miners getting cut in half -- that's a good supply demand change. I think last year the White House killed the Bitcoin rally with their opposition, but with the presidential election cycle underway, it's not gonna be in the headlines, and that's bullish for Bitcoin. And then with geopolitical tensions in the Middle East, I think that's good for crypto... We're getting a lot more interest in it from our clients."
And then on January 29, Lee tweeted that Bitcoin crossing its 200-day moving average on January 27 should be seen as a "positive milestone" and reinforces his belief that 2020 should be a "great year" for Bitcoin.
Lee explained that whenever the Bitcoin price breaks above its 200-day moving average, the "win-rate" (over the next six months) increases to 80%, and means that Bitcoin is "re-entering" bullet market territory:
Bitcoin moved back above its 200-day moving average on 1/27... positive milestone and reinforcing 2020 shaping up to be great year for $BTC #bitcoin— Thomas Lee (@fundstrat) January 29, 2020
- whenever BTC >200D, win-rate (6M forward) jumps to 80% and essentially "re-entering" bull market (>200D)#BTD #bestasset2020 pic.twitter.com/YbpQYHpLaj