Bitcoin permabull, Tom Lee, believes that the gradual return of Bitcoin’s dominance of the cryptocurrency market points to an imminent price rally. Lee is confident Bitcoin can quickly recover from any price dips that occur in the interim due to the prevailing market conditions.
The Return of the BTC Market Dominance
The Fundstrat chief recently identified the Bitcoin market share as an essential metric for gauging the likely growth trajectory for the BTC price. Speaking to CNBC on Monday (August 6, 2018), Lee said the fact that the increase in BTC market dominance is a sign of a favorable price movement. According to Lee:
I think bitcoin dominance is actually showing the market is reacting to what’s been taking place.
At the start of 2018, the BTC market share stood at 36 percent, a significant difference from the 80 percent level it began the previous year. However, in the past few weeks, Bitcoin’s market dominance has grown considerably, almost reaching the 50 percent level. At the time of writing this article, BTC’s market share stood at 48 percent.
Bitcoin Isn’t Broken
Lee also touched briefly on Bitcoin’s performance in 2018. Despite the over 60 percent decline in the price of BTC since the start of the year, Lee remains confident in the long-term prospects of the top-ranked cryptocurrency.
On Monday afternoon, BTC slipped below $7,000 for the first time in three weeks leaving investors worried about another significant dip like the ones experienced in June. Commenting on the issue, the Fundstrat managing partner said:
Bitcoin isn’t broken if it’s holding at these levels. I think people are afraid it is going to go back down to $6,000 and never come back from those bear markets.
At the time of the price rally in July, opinions among BTC enthusiasts was split. On the one hand, people like Barry Silbert were confident that BTC had bottomed out at the $5,700 low reached in June. However, Bitmex chief, Arthur Hayes said that BTC would still test $5,000 before any significant price rally can happen in 2018. As for Tom Lee, he has consistently affirmed his $25,000 end-of-year BTC price forecast.
Positive News Will Soon Affect Bitcoin Price
Despite the price lull, Lee expressed confidence that the recent positive developments will soon start to impact BTC price. Last week, NYSE owner Intercontinental Exchange – in conjunction with Microsoft and Starbucks – announced a collaboration geared towards creating a regulated virtual currency ecosystem. Lee believes that such developments coupled with the SEC’s stand on the cryptocurrency are good news for Bitcoin, saying:
The news that we have seen, from the SEC, saying Bitcoin’s a commodity, to … the potential for an [exchange-traded fund] is causing investors to decide that bitcoin is the best house in a tough market.
At press time, BTC was trading slightly above $7,000 gaining about 0.3 percent in the last 24 hours.
Do you agree with Tom Lee’s position on the immediate future of Bitcoin? Keep the conversation going in the comment section below.
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