Wall Street’s foremost cryptocurrency analysts, Fundstrat Global Advisors, has indicated the cryptoeconomy’s current bearish cycle may be starting to turn around.
The firm detailed as much in their 2019 crypto outlook, which they released on April 2nd — rather fittingly on the same day the bitcoin (BTC) price acutely surged nearly $1,000 USD to briefly top $5,000 for the first time this year.
In their report, Fundstrat detailed how their view on the space in the coming months was one of general optimism, with the analysts projecting the 2019 cryptoeconomy to have “positive risk/reward” tradeoffs:
“Bottom line: We see fewer reasons to question the recent recovery Bitcoin prices—the best quarter since 2017. While the key technical price hurdle is BTC closing above its 200D (currently ~$4,600 and falling by $15 per day), we see 2019 as positive risk/reward.”
The firm highlighted several areas that were positively converging for the cryptocurrency ecosystem in recent times, including bitcoin crossing above its 200 day moving average, institutional custodian progress, the advance of the Lightning Network scaling solution, and a slowing of initial coin offerings (ICOs).
Whenever we survey CT, we share our results
>50% of CT bearish, a contrast to the “sense of capitulation is in” view from panelists at CFA TX Summit.
Our take. Anyone who is a long term believer in crypto, price dynamics so much healthier. Less scamshttps://t.co/kfJ7Ar0LN4
— Thomas Lee (@fundstrat) April 2, 2019
The analysts also noted all their proprietary crypto indices, like the FS Crypto Platform and FS Crypto Exchange indices, were in the green over the past week and that so-called “Big Money” — wealthy or enterprise investors — seemed to be buying bitcoin and ether (ETH) with renewed vigor because bitcoin futures shorts have been declining while volume for Coinshares’s “proxy” crypto ETNs have been rising.
Zooming out from Fundstrat’s report, use of the space’s top cryptocurrency has also been booming over the last week, as transactions in the Bitcoin mempool grew more than 3,000 percent in that span.
That surge seems to be at least partly derived from rising sentiments. Fundstrat’s outlook highlighted how the firm’s Bitcoin Misery Index is starting to indicate trending optimism among hodlers.
Things Looking Up Long-Term, But What Caused BTC’s Latest Quick Move?
The sharp 20 percent rise of the bitcoin price on April 2nd caused immediate debate regarding what had catalyzed the movement.
The absence of any obvious headlines driving the rise initially led to excited confusion. However, after the dust had settled, it seems price watchers got their answer: a single party was the culprit.
Pay careful attention to flows in the coming days. Institutions FOMO too. pic.twitter.com/rXa4jCCQDK
— Spencer Noon (@spencernoon) April 2, 2019
Oliver von Landsberg-Sadie, the CEO of digital asset firm BCB Group, noted as much to Reuters, having pointed out that a single entity appeared to have bought approximately 20,000 BTC in rapid succession across the exchanges of Bitstamp, Coinbase, and Kraken:
“There has been a single order that has been algorithmically-managed across these three venues, of around 20,000 BTC. If you look at the volumes on each of those three exchanges – there were in-concert, synchronized, units of volume of around 7,000 BTC in an hour.”
Who the buyer is or where they’re from may never be known. But their quick injection of buy pressure has crypto pundits wondering if the stage has been set for further FOMO (“Fear on missing out”) or if this sharp rise was temporary and BTC will settle back down near $4,000 in the interim.
That’s still anyone’s guess for now.
A Lot Can Happen In a Short Period of Time
In a subsequent tweet thread, Fundstrat’s Tom Lee outlined how bitcoin typically sees most of its upward price movements “within 10 [days] of any year.”
2/ Reminder that BTC generally generates all of its performance within 10D of any year.
–ex the top 10 days, BTC is down 25% annually since 2013 pic.twitter.com/zoEocEEZvu— Thomas Lee (@fundstrat) April 2, 2019
The takeaway? Bitcoin tends to move up in acute fits, with long periods of relative stability in between the surges.
To that end, Lee joked in his thread that it might simply be best to “HODL the other 355 days.” Of course, the past isn’t a clean map for the future, but if BTC’s historical performance is any indication, the cryptoeconomy may have further room to rip higher in the short-term.
