Bitcoin is in the middle of a sustained recovery and investors should use recent weakness to buy more, according to Fundstrat technical strategist Robert Sluymer.
“Use pending pullbacks to continue accumulating bitcoin in the second quarter in anticipation of a second-half rally through ~6 000 resistance,” Sluymer wrote in a note on 2 May. He sees bitcoin’s rebound from its 200-week moving average and breakout from its first-quarter trading range as “the early stage of a longer-term recovery developing”.
Sluymer warned in mid-November, when bitcoin was trading around US$5 500, that the asset had suffered “significant technical damage” that could take months to repair. Over the next several weeks, bitcoin slid as low as $3 136.04. In February, Sluymer cautioned that the technical position in the crypto space was still weak. Bitcoin didn’t recover the $5 000 level until 2 April.
Fundstrat was an early mover in analysing cryptocurrencies and developed their own indexes. And Sluymer’s colleague, Fundstrat co-founder Tom Lee, is regarded as a bitcoin bull. Lee started 2018 with a year-end price target of $25 000, before eventually abandoning time frames for his predictions in December when it was around the $3 000 to $4 000 range. Lee in March said he sees 2019 as a year the market can “ build better risk-reward”. Bitcoin rose 0.9% to $5 456.44 as of 12.04pm in Singapore.
“While it’s premature to conclude bitcoin will not retest support near $4 300, we would encourage traders and investors to remain focused on the bullish longer-term technical profile developing,” Sluymer wrote. “Bottom line: use recent weakness to accumulate.” — Reported by Joanna Ossinger, (c) 2019 Bloomberg LP