The head of research and co-founder of Fundstrat says his firm’s recommendation is to stick with Bitcoin, but notes that the recent crypto flash crash could present an opportunity to trade in altcoins.
In a series of tweets, Lee compares the crypto market’s recent dive to historical trends back in 2014, noting that altcoins saw a 2.7X gain after falling 87%.
CRYPTO: 1/ To put the alt-coin sell-off in a historical context: we created an "alt-coin correction index" which measures what % of alt-coins are down 70% from their 9-month high. Recently, this index hit 97%, the highest reading since 10/25/14. pic.twitter.com/0Oy9lgzHMQ
— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) September 6, 2018
CRYPTO: 2/ Back in 2014, when this figure hit 87% (all-time high back then, and there were 349 tokens with actual trading volume back then), this was followed within 1 week by a mini alt-coin rally. Alts saw a 2.7X gain (nearly a triple) in 7 weeks. pic.twitter.com/sL812nxwq4
— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) September 6, 2018
CRYPTO: 3/ While we recommend sticking with #BTC (etc), the alt-coin correction index does seem to suggest this latest downdraft is actually a tactically positive signal for alt-coins.
— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) September 6, 2018
So far, Lee hasn’t offered his rational for the recent crypto market sell-off.
Current speculation includes market manipulation and a recent report from Business Insider that cites anonymous sources who say Goldman Sachs has shelved plans to create a Bitcoin trading desk in the near future.
Related:Â Neural Network Prompts Speculation of Bitcoin Market Manipulation in Recent Crypto Dip
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