Altcoin Markets in ‘Purgatory’, Will Turn Bullish Late Summer: Bitcoin Bull Tom Lee
The altcoin bloodbath may finally be nearing its culmination, but small-cap coins will likely spend the next quarter in “purgatory” as they await a late-summer bull market.
That’s according to market strategist and noted Bitcoin bull Tom Lee, whose firm — Fundstrat Global Advisors — was the first Wall Street strategy firm to recommend cryptocurrencies to clients.
Altcoins — to a greater extent than even Bitcoin — embarked on a parabolic 62-day rally during Q4 2017, but most coins have seen 75 percent declines in the bear market that followed. Altcoins have also lost significant market share, allowing Bitcoin dominance to rise as high as 45 percent in recent days.
Lee, along with Fundstrat strategists Robert Sluymer and Sam Doctor said in a new report that this precipitous decline is likely nearing or has already reached its culmination, although this does not mean altcoins will immediately resume their prior climb
“We believe the current purgatory period will last for 150-175 days, implying a bull market for alt-coins really starts mid-August to mid-September,” Fundstrat wrote in a Tuesday note to investors, according to a Bloomberg report. “The reason for this longer duration is the current dark clouds overhanging crypto are really alt-coin specific.”
Previously, Fundstrat has predicted that the Bitcoin price will hit a new all-time high as soon as July, and — citing data from the firm’s new “Bitcoin Misery Index” — Lee has forecast that Bitcoin could reach $91,000 within two years.
Since the firm believes Bitcoin’s bull market will already be in high gear by the time altcoins begin to rally, Tuesday’s note advised investors to concentrate their assets in large-cap cryptocurrencies for the time being.
Moreover, Fundstrat has recommended that clients buy into Bitcoin’s recent dip, citing the flagship cryptocurrency’s long-term fundamentals and potential to replace gold as a store of value among millennials and other younger investors that are far more comfortable with the concept of digital assets than their elders.
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