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The price of Bitcoin marked a decisive leg up during the past 7 days, gaining more than 18 percent during the period. More importantly, it broke the important psychological level of $10,000, which caused serious hype throughout the entire cryptocurrency community. With this, the popular commentator and chief analyst at Fundstrat Global Advisors, Tom Lee, says that if Bitcoin breaks its previous ATH, this could suggest that it was never actually a bubble.
Was It Ever a Bubble?
In 2017, Bitcoin went on a parabolic move to hit a whopping price of around $20,000. This undoubtedly pinned all eyes on it. However, what followed was a steep correction in which the cryptocurrency lost upwards of 85% of its value to drop to around $3,000 in 2018. The sharp increase, followed by an equally sharp decrease, caused many people to believe that the market looked a lot like a bubble.
However, as it turned out, 2019 has so far been rather good for the market. Bitcoin is up more than 250% since January 1 and is currently trading at close to $11,000.
Speaking on the matter was Thomas Lee, the popular cryptocurrency commentator and head analyst at Fundstrat Global Advisors. He noted that if Bitcoin manages to hit the previous all-time high this year, it will have only taken 18-20 months to do so. He made the point that this could mean that the previous parabolic move wasn’t a bubble, as many considered it to be.
Just an observation, but if $BTC re-attains its all-time high this year, it is only 18-20 months from prior high.
When a market re-attains a high so quickly, one could argue the prior high was not a bubble after all.
Hmmmm
— Thomas Lee (@fundstrat) June 22, 2019
If we follow Lee’s chain of thought that 2017’s ATH might not have represented a bubble, the most logical conclusion is that the market saw a serious and prolonged correction.
It Can Get Easier From Here
As noted, $10,000 was an important psychological barrier for Bitcoin. Many have already argued that the break above it could propel the price even higher. Tom Lee himself noted a few days back that FOMO could take the cryptocurrency’s price to $20,000 within months.
And while we have yet to see how the price action will develop, we can take a look at what happened last time Bitcoin was trading at its current levels.
Nov 2017 – Dec 2017 $BTC
$8000- $9000: 9 days
$9000-$10000: 2 days
$10000-$11000: 1 day
$11000-$12000: 6 days
$12000-$13000: 17 hours
$13000-$14000: 4 hours
$14000-$15000: 10 hours
$15000-$16000: 5 hours
$16000-$17000: 2 hours
$17000-$18000: 10 minutes
$18000-$19000: 3 minutes— frx [Bitcoin] | Moon (@frx49) June 22, 2019
As you can see, the pattern is pretty clear. The cryptocurrency is gaining steam and hype as it appreciates in price. It took 9 days for it to get from $8,000 to $9,000, but only 3 minutes to move from $18,000 to $19,000.