An overnight increase in the prices of bitcoin reignited the optimism among the watchers of the cryptocurrency, and one of the most prominent bitcoin bulls on the street says that the cryptocurrency could more than triple in 2018.
On Thursday, the co-founder and head of research at Fundstrat, Thomas Lee, said to the “Futures Now” program of CNBC: “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.”
A march to $25,000 represents approximately an increase of 225 percent from its price on Thursday. Even if it retakes its highs last December, the target implies an upside of at least 25 percent. By midafternoon of Thursday, Bitcoin traded at about $7,662.
The world’s leading cryptocurrency has had a concerning start to the year after hitting a record high during the middle of December. Even after the surge on Thursday, the prices remain approximately 61 percent below the said highs.
Lee said that it is past time that bitcoin recouped those losses.
He stated: “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.”
The cryptocurrency slid into a bear market over 2014 and 2015 following the suspension of trading and filing for bankruptcy of Mt.Gox, a bitcoin exchange. Its prices hit a bottom during mid-January 2015. The current levels are approximately 43 times greater compared to the said low.
However, the recent weakness in price through the tail end of March 2018 and the first half of April may have revived concerns of a prolonged downturn. Lee says that the said worries are not justified – as pressure on cryptomarkets was probably tied to the tax-selling season. He said that various investors had unloaded some of their holdings of bitcoin during the past few weeks to cover taxes on capital gains that are tied to those positions.
According to the calculations of Lee, households in the United States owed as much as $25 billion in taxes on capital gains on their investments in cryptocurrency. With Tax Day set on the 17th of April, which is later than the usual this year, only days away, the pressure on selling has started to decline.
According to a research of Fundstrat, the trading of Bitcoin this April set a significant technical reversal that implies further upside ahead. During the past two weeks, Bitcoin stayed above $6,500, showing a level of support and breaking through the downtrend resistance last March. Fundstrat forecast the next major resistance band to be around $9,000.
On Thursday, Bitcoin increased by almost 11 percent higher. At one point early in the day, the prices surged by over 17 percent to top $8,000. The last time that the cryptocurrency moved above the said level was on the 28th of March.