Ether Set for Strong Rally: Tom Lee
While well-known crypto bull Tom Lee of Fundstrat Global Advisors has only three months to prove that his forecast of bitcoin going above USD 20,000 is correct, now he’s looking into his magic ball for ether.
The number two cryptocurrency by market capitalization has had a difficult time so far this year, trading down more than 80% since its peak earlier this year.
Now, however, Lee is calling a bottom in ether, saying that he believes it is about to “stage a trend reversal and rally strongly.”
According to CNBC, Lee expressed his view on the beaten-down cryptocurrency in a note to clients on Thursday, explaining that the last four times ether has lagged other coins by as much as now, two standard deviations or more, it later saw a “major trend reversal.”
Lee expects the token to reach USD 1,900 by the end of the year, according to Bloomberg. It’s currently trading at around USD 229.
He further added that the investor sentiment surrounding Ethereum is “overly negative,” and said that its weak performance is “a sign of capitulation” in the market. Lee also suggested that much of the selling of ether this year was due to supply from EOS, a blockchain protocol powered by the native cryptocurrency EOS, which was originally built on Ethereum but later switched to its own blockchain, as well as panicking by initial coin offering teams trying to save capital raised in token sales.
As traders know, “capitulation” in a market happens when seemingly all market participants have given up on an asset, normally a sign that a bottom is in the making while a foundation for the next leg up is being built.
However, some in the crypto community question this recent forecast:
You see this happening even if there isn't another ethereum-based ICO boom/bubble to spur demand for ether? ICO projects effectively dripping supply onto market without it.— Kyle Torpey (@kyletorpey) September 27, 2018
As of press time, the price of ether was up more than 5% in the last 24 hours.