Shift in Price Prediction
BitMine Chair and Fundstrat CIO Tom Lee has adjusted his year-end price target for Bitcoin (BTC), now indicating that it is "still very likely" to trade above $100,000 before the close of the year. In a recent interview with CNBC, Lee also suggested that Bitcoin might reach a new all-time high (ATH) before the end of 2025. This marks a departure from his earlier, more aggressive prediction of $250,000 for Bitcoin by year-end.
Lee had consistently maintained his $250,000 price target for BTC throughout early 2024. This prediction remained firm even as Bitcoin surpassed $126,000, setting a new ATH in early October. However, a significant liquidation event shortly after this peak, which saw $19 billion wiped from the market, appears to have influenced Lee's revised outlook for the remainder of the year.
Following this liquidation event, Bitcoin experienced a sustained downtrend. Data indicates that Bitcoin has fallen by more than 19% in the past month and is over 27% down from its October ATH. Despite this downturn, Bitcoin has shown signs of recovery, trading back above the $90,000 level.
As of 2:27 a.m. EST, Bitcoin was trading at $91,318.66, showing a rebound of over 4% in the past 24 hours.
Bitcoin's Future Potential
Despite the adjusted year-end forecast, Tom Lee remains optimistic about Bitcoin's long-term prospects, stating that its "best days are going to happen" before the conclusion of 2025. He highlighted Bitcoin's historical tendency to achieve the majority of its annual gains within a concentrated period, often within just 10 trading sessions.
This sentiment is shared by other market observers. Bitwise CEO Hunter Horsley noted in February 2024 that missing Bitcoin's top 10 performing days each year could mean missing out on nearly all of its returns.
It’s hard to pick the perfect time to buy Bitcoin.
Yesterday is a reminder.
A fantastic analysis by @fundstrat below illustrates this.
TLDR: if you miss the 10 best days of Bitcoins return each year, you miss all the return. And you don’t know when those days will be.… pic.twitter.com/vulIAapQX9
— Hunter Horsley (@HHorsley) February 28, 2024
Analysis of Bitcoin's 2024 performance supports this perspective. The asset's strongest 10 days in the past year accounted for a combined return of 52%, while the remaining 355 days saw an average return of -15%.
Historical Forecasts and Market Signals
This adjustment in Lee's forecast is not the first time his predictions have deviated from expectations. In early 2018, he projected Bitcoin to reach $125,000 by 2022. While Bitcoin did eventually hit this level in October of the current year, his prediction was off by approximately three years. However, Lee has also made accurate calls, such as his July 2017 forecast that Bitcoin could reach $20,000 by 2022 in a base-case scenario, and a more bullish $55,000 over the same period. Bitcoin surpassed $20,000 in December 2020 and reached $55,000 in March 2021.
Technical indicators on Bitcoin's daily chart are currently showing bullish signals that could support a year-end rally. The Moving Average Convergence Divergence (MACD) line has crossed above its signal line, indicating a shift from bearish to bullish momentum. Additionally, rising Relative Strength Index (RSI) readings suggest increasing buyer strength.
These signals suggest that BTC could potentially overcome the $94,000 resistance level and aim for $105,000. Conversely, a failure to break through this resistance could lead to a price drop to $82,600.