The same analyst who predicted a Bitcoin at $40,000 now expects a major correction to occur in the near future.
Did you like the content? Share it
Click to share on Twitter (opens in a new window)Click to share on Facebook (opens in a new window)Click to share on LinkedIn (opens in a new window)Click to share on WhatsApp (opens in a new window)Click to share on Telegram (opens in a new window)Click to share on Skype (opens in a new window)
Bitcoin continues to rise parabolically without making any healthy Bitcoin Profit corrections, however with each historical high it marks more people are saying that a reversal should occur soon. Such is the case with analyst Tom Lee, who thinks a large 40-50% reduction is near.
Tom Lee is managing partner of Fundstrat Global Advisors, a group of researchers who predicted and hit the $40,000 target for Bitcoin.
That forecast is part of a thesis that lays out a vision where 2020 could be another exceptional year for the largest of the crypt currencies.
Only 10 days after that prediction was made, BTC achieved the goal. However, investors should prepare themselves for the volatility of the crypt currency. Volatility capable of creating losses as fast or even more than the gains we are seeing.
Tom claims that we are looking at a hyper volatile asset. Fundstrat’s proposed roadmap for risk assets indicates explosive stock performance since the beginning of the year.
He notes that the stock market will peak at the end of January, around 4,000 points on the S&P 500, before a major correction occurs.
If the S&P falls by 10%, Bitcoin will show a big drop, could be between 40-50%, says Tom Lee.
Bitcoin continues its historic run, what has driven it?
As drastic as it sounds, what the analyst predicts for Bitcoin is quite normal
Lee indicates that in terms of historical movements in the price of cryptomone, a fall like the one he predicts is quite normal. It was these same patterns of behaviour that hinted at an explosion to $40,000.
This is a fairly typical correction for cryptomonies, Lee said in an interview for yahoo!finance. He adds that Bitcoin fell more than 40% in just a few weeks in November 2019, and rapidly in March 2020 when the markets collapsed.
Even with a decline as deep as the analyst predicts, he also says that after this happens Bitcoin could recover more than 300% during the year.
If behaviour is similar to 2017, then BTC will rise by at least 300%. It will be a fairly uneven rise, but either way by the end of the year the price will be much higher, Tom Lee says.