As bitcoin prices surged by over $1,000 in less than one-hour, bullish investors finally found some relief. The sudden upsurge in prices, following a two week long sideways movement is helping the bulls recalibrate their positions and think about the next breakout at over $8,000.
Bitcoin watchers were also thrilled as a longtime supporter and crypto bull Tom Lee said that the value of the primary crypto is set to triple by the end of this year. He is the co-founder and head of research at Fundstrat and frequently shares his bullish insights on the market. Talking to CNBC on Thursday, he said, “We still feel pretty confident that bitcoin is a great risk-reward and we think it could reach $25,000 by the end of the year.”
At the time of mid-afternoon on Thursday, the crypto was trading at $7,662. If Lee is to be believed, the currency could spiral into a bullish pattern, reaching $25,000 by the end of 2018. If this has to happen, the investors will experience a 225 percent increase in the value of their coins in the next 8 to 9 months.
However, considering the currency position, it looks that reaching the highs is rather difficult. After reaching a price of over $19,000 in mid-December, bitcoin came crashing. In fact, since the highs, the price of the currency has dropped by over 61 percent, with a 28 percent drop in April only. Even after the coin surged quickly and aggressively for about 3 hours, it started having off the gains too.
Lee is assured that these problems will not hamper the coin’s march to $25,000. He said that it is high time that the coin ‘recouped those losses.’ Lee said, “It’s overdue. Bitcoin was incredibly oversold. When you look at metrics like price-to-book, which is ‘money cost,’ or our bitcoin misery index, it’s pretty much what you saw at the end of the 2014 bear market, not the start.”
Earlier, he said that Tax Day is making the currency move into the oversold zone. He said that investors in the US could owe as much as $25 billion in taxes to the authorities, which could make up for 20% of the total receipts for 2017. This year, Tax Day falls on April 17th as April 15th is a holiday. Lee is confident that prices will jump back as investors who dumped cryptos for dollars will return to the market. He said, “As a consequence, if this analysis is correct, selling pressure for bitcoin should be alleviated after April 15th.”
This is not the first-time bitcoin has entered a bear market. After the Mt. Gox incident, the currency remained relatively low profile in 2014 and 2015, with prices hitting rock bottom in mid-January 2015. Even at the current low levels, prices as 43 times as high as 2015. This time, the bearish trend has continued, especially since the end of March which is making investors feel fear. At the same time, several authorities around the world are cracking down on exchanges, creating more FUD. Therefore, a bullish reversal will have to wait till at least mid-April.