Bitcoin marked a decisive leg up throughout the past 7 days, gaining more than 18 percent during the period. More importantly, it broke the important psychological level of $10,000, which caused serious hype throughout the entire cryptocurrency community. With this, the popular commentator and chief analyst at Fundstrat Global Advisors, Tom Lee, says that if Bitcoin breaks its previous ATH, this could suggest that it was never actually a bubble.
Was It Ever a Bubble?
In 2017 Bitcoin went on a parabolic move to hit a whopping price of around $20,000. This undoubtedly pinned all eyes on it. However, what followed was a steep correction where the cryptocurrency lost upwards of 85% of its value to drop to around $3,000 in 2018. The sharp increase, followed by an equally sharp decrease, caused many people to believe that the market behavior looked a lot like a bubble.
However, as it turned out, 2019 has so far been rather good for the market. Bitcoin is up more than 250% since January 1st as it’s currently trading close to $11,000.
Speaking on the matter was popular cryptocurrency commentator and head analyst at Fundstrat Global Advisors, Thomas Lee. He said that if we manage to hit the previous all-time high this year, this would suggest that it only took BTC 18-20 months to do so. He made the point that this could mean that the previous parabolic move wasn’t a bubble, as many considered it to be.
Just an observation, but if $BTC re-attains its all-time high this year, it is only 18-20 months from prior high.
When a market re-attains a high so quickly, one could argue the prior high was not a bubble after all.
— Thomas Lee (@fundstrat) June 22, 2019
If we follow Lee’s chain of thought that 2017’s ATH might not have been a bubble, the most logical conclusion is that the market saw a serious and prolonged correction.
It Can Get Easier From Here
As we said in the beginning, $10,000 was an important psychological barrier for Bitcoin. Many have already argued that it could propel the price even higher. Tom Lee himself outlined a few days back that FOMO could take the cryptocurrency to $20,000 in months.
And while we have yet to see how the price action will develop, we can take a look at what happened last time Bitcoin was trading at the levels it currently is.
Nov 2017 – Dec 2017 $BTC
$8000- $9000: 9 days
$9000-$10000: 2 days
$10000-$11000: 1 day
$11000-$12000: 6 days
$12000-$13000: 17 hours
$13000-$14000: 4 hours
$14000-$15000: 10 hours
$15000-$16000: 5 hours
$16000-$17000: 2 hours
$17000-$18000: 10 minutes
$18000-$19000: 3 minutes
— frx [Bitcoin] | Moon (@frx49) June 22, 2019
As you can see, the pattern is pretty clear. The cryptocurrency is gaining more steam and hype behind it as it appreciates in price. It took it 9 days to get from $8,000 to $9,000 but only 3 minutes to move from $18,000 to $19,000.