Analyst Fundstrat Tom Lee believes that the factors pointed to by skeptics who expect a further decline in the price of bitcoin, do not reflect the real state of things. He told about it on the air of the transfer of “Fast Money” to CNBC.
The first factor that Lee considered was the decrease in searches related to bitcoin in Google. According to recently published data, since the beginning of the year the number of such requests has decreased by 75%, and for the last 3 months – twice. Many skeptics believe that this indicator directly reflects interest in bitcoin as an investment object, but Lee argues that he does not give a complete picture of what is happening.
“Requests on Google are not the defining indicator for bitcoin. This is a matching indicator. Therefore, it should not be considered as a tool for predicting the price of bitcoin,” the analyst said.
In other words, the decrease in the number of search queries occurs together with the drop in the price of bitcoin, but does not determine the future behavior of the market. Lee also assured the audience that traditional financial institutions are still interested in bitcoin, despite the short-term decline.
Another factor often used by “bears” in forecasting negative dynamics is a general decline in trading volumes. According to CoinMarketCap, the volume of trading in cryptocurrencies fell by 75% compared to December.
Lee argues that at the end of last year there was a “parabolic outburst”, that is, this indicator should be regarded as a deviation from the norm. He also compared activity on the market today with activity in early 2017.
“If we compare with the same period last year, the volume of bitcoin trades grew by 900%,” the analyst said, adding that now the market is characterized by “healthy” activity.
And finally, Lee turned to the point of view that bitcoin could face significant difficulties while overcoming the psychological and technical barrier at $10,000. To support his bullish forecast, he turned to the study conducted by FundStrat:
“Bitcoin is gaining all positions in 10 days in any year. I do not think that his current location at current levels will not allow him to rise higher by the end of the year. “
Previously, Lee said that if you exclude 10 days, during which bitcoin grows most confident, then on average, each year the cryptocurrency will fall by 25%. At the same time, the analyst says that if the depreciation continues, then, most likely, it will not fall below the average production cost of one bitcoin, which today is about $6,000.