20 Mar Altcoin bear market may be over, purgatory awaits
In his Mar 20, 2018 client newsletter, Fundstrat Managing Partner Tom Lee says the Altcoin bear market is showing signs of an end by late summer.
From now until then, Altcoins will be in “purgatory” until a possible return to a bull market.
Fundstrat monitors 250 small-cap coins which are down 75% since the start of the year:
“After a 75% decline in Alt-coins since 1/13/18, our alt-coin indicator (“% of alt-coins rising >200% in past 90 Days, or 3X) now sits at 3%, suggesting that the bulk of the alt-coin retracement is done— in other words, we believe the alt-coin bear market is largely over.”
First “purgatory”, then a bull market
Fundstrat has advised cryptocurrency investors to stick with the ten or so large-cap coins such as Bitcoin, Bitcoin Cash, Litecoin and Ethereum until the current Altcoin consolidation, or “purgatory” is over.
Based on past charts and analysis, Lee expects the Altcoin purgatory will last for another 150 to 175 days, before an expected return to a bull market between mid-August and mid-September.
SEC and news headlines impact
Lee says the longer than expected consolidation for altcoins is partly due to a lack of clarity from the US SEC about whether initial coin offerings (ICOs) are considered coins or securities that require registration. Headlines about ongoing investigations have also affected investor sentiment, he writes.
He suggests investors stay with large-cap investments throughout the summer. Because Altcoins have already declined 75%, Lee says most of the potential regulatory risk appears to have been priced into the market.
Throughout the day, bitcoin has been on a recovery path, up 6.00% reaching $9,007. Other Altcoins were showing similar recoveries in value by midday.
Editor’s note: Information on Blockcoin Today is not intended as investment advice. Please consult your own investment advisors for appropriate guidance and counsel.