11 signs that Bitcoin could make a comeback and return to $14,000

On April 28, Tom Lee, a long-term bullish Bitcoin analyst, believed that although the price of Bitcoin fell on Friday, signs related to blockchain, technical indicators and trading volume showed that the price of Bitcoin is expected to continue to rise in the future and even enter a bull market. In addition, the volatility of Bitcoin is 2.5 times that of the S&P 500 index, which can be calculated that Bitcoin is expected to return to the high of $14,000.

Analysts say Bitcoin is expected to continue to rise and may have entered a bull market

In an interview, Tom Lee said that Bitcoin fell early last Friday because of concerns about the legitimacy of another digital currency called Tether. He believes that Bitcoin will continue to rise and may even have entered a bull market.

Bitcoin performed well in 2017, soaring from around $2,975 to $19,511 in just three months from September to December, shocking the financial market. However, Bitcoin subsequently plummeted due to the bursting of the bubble, and continued to be bearish in 2018. It rebounded after hitting a low of $3,136.04 on December 15 and is currently around $5,180.

Tom Lee pointed out: "2018 was a bad year for Bitcoin, and it fell into a severe bear market. We published an article this week highlighting 11 signs that only bull markets have appeared in history. Therefore, I think there is more and more evidence that Bitcoin has entered a bull market."

These 11 signs indicate that the crypto winter is over. Tom Lee’s three most bullish factors for Bitcoin are related to blockchain, technical indicators, and trading volume.

The first sign came in January, when his team noticed that transactions on blockchain, the technology some use to buy and sell bitcoin, were rising year over year. Lee explained that the boost was due to unrest in Venezuela and Turkey, where citizens have lost confidence in their currencies and may turn to bitcoin as an alternative.

He said that the supply chain transaction activities in these two countries increased by nearly 30%, so it is very meaningful. People said that they no longer trust their own currencies and banks and want to start using Bitcoin, which is the real reason for the surge in supply chain transactions.

The second sign came in April when Bitcoin managed to close above its 200-day moving average.

The third sign comes from Fundstrat's survey of over-the-counter brokers. Tom Lee said that these brokers play a very important role in how institutional investors trade cryptocurrencies. The brokers surveyed told Fundstrat that the level of activity based on the number of clients has increased by 60% to 70%, and the volume of transactions per client has surged.

Tom Lee believes that there are signs that both Bitcoin's fundamentals and technicals are improving, and that Bitcoin holder activity is now really active.

Eight other bullish signals for Bitcoin include shrinking supply; Fundstrat’s Bitcoin Misery Index turning positive; Bitcoin bulls agree that Bitcoin has bottomed out; and the recent “golden cross” of Bitcoin, where the 50-day moving average exceeds the 200-day moving average.

Tom Lee said all these signs suggest that Bitcoin has yet to climb higher and that these catalysts “may very well” push Bitcoin to new all-time highs around 2020.

Bitcoin is expected to rise to $14,000

In March, Tom Lee predicted that Bitcoin would see a bull run in 2019. He added that Bitcoin’s volatility, which is about 2.5 times that of the S&P 500, could help push it higher. One thing to remember is that whenever the S&P moves significantly, this almost always leads to big moves in Bitcoin later in the year.

Therefore, Tom Lee believes that: "The standard deviation of Bitcoin volatility is 2.5 times that of the S&P 500 index, and based on the increase in U.S. stocks since the beginning of the year, this will push the price of Bitcoin to $14,000. I am not saying that this is definitely the future development direction of Bitcoin, but there is such a catch-up trend."

Bitcoin prices saw a sharp swing on Friday, settling at around $5,100 per coin amid overall weakness in the cryptocurrency market. Lee noted in an interview on Friday that Tether’s problems “don’t have a big impact on Bitcoin” because most people simply choose to go long Tether because they don’t want to go long Bitcoin.