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. The largest cryptocurrency climbed to its highest since November.
“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 May 2. 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.”
Bitcoin advanced as much as 7.2 percent to $5,795.50 as of 8:05 a.m. in New York, according to Bloomberg composite pricing. The 55 percent jump in 2019 has helped pull rival tokens higher. Litecoin has soared more than two-fold.
Sluymer warned in mid-November, when Bitcoin was trading around $5,500, that the asset had suffered “significant technical damage” that could take months to repair. Over the next several weeks, Bitcoin slid to 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 early April.
Fundstrat was an early mover in analyzing cryptocurrencies and developed its 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.”
“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.”
© Copyright 2023 Bloomberg News. All rights reserved.