Cryptocurrencies are on their way back says Wall Street analyst
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Good news for investors in the market for digital currencies.
The bear market for alt-coins, or alternative cyptocurrencies, is “largely over” according to a group of analysts at Fundstrat, the Wall Street research firm led by noted bitcoin bull Tom Lee.
Alt-coins generally refer to the more than 1000 cryptocurrency alternatives launched after the success of bitcoin. Examples include Litecoin, Ripple and Dogecoin.
For the most part, smaller cryptocurrencies have been stuck in a rout since the beginning of 2018. In total, the market for digital coins has shed more than $US500 billion of its value from an all-time high above $US800 billion at the beginning of the year.
Since then, Fundstrat has advised clients to stick with large-cap coins such as bitcoin and ether to weather the storm.
Recently, Lee said bitcoin would retest its highs close to $US20,000 set in December by July of 2018.
Now, it’s telling clients to get ready for the end of the alt-coin bear market. Here’s Fundstrat in a note out to clients on Tuesday:
“After a 75 per cent decline in Alt-coins since 1/13/18, our alt-coin indicator (“% of alt-coins rising >200% in past 90D, or 3X) now sits at 3 per cent, suggesting the bulk of the alt-coin retracement is done-in other words, we believe the alt-coin bear market is largely over.”
That doesn’t mean the firm is advising crypto-lovers to dive head first into their favourite alts just yet.
“While the bulk of the decline is behind us, a bull market for alt-coins, however, is not necessarily underway,” Fundstrat said.
According to the firm, alt-coins have historically gone through “purgatory periods” following a bear market, which have lasted as long as 231 days.
“Given this expected purgatory, we advise sticking with large-caps,” the firm said.
The firm’s top bets include bitcoin cash, bitcoin, and litecoin.