Crypto Analyst Tom Lee: Bitcoin Dip Triggers ‘Tactically Positive’ Signal for Ethereum, XRP, EOS, Stellar and the Alts

The head of research and co-founder of Fundstrat says his firm’s recommendation is to stick with Bitcoin, but notes that the recent crypto flash crash could present an opportunity to trade in altcoins.

In a series of tweets, Lee compares the crypto market’s recent dive to historical trends back in 2014, noting that altcoins saw a 2.7X gain after falling 87%.

CRYPTO: 1/ To put the alt-coin sell-off in a historical context: we created an “alt-coin correction index” which measures what % of alt-coins are down 70% from their 9-month high. Recently, this index hit 97%, the highest reading since 10/25/14. pic.twitter.com/0Oy9lgzHMQ

— Thomas Lee (@fundstrat) September 6, 2018

CRYPTO: 2/ Back in 2014, when this figure hit 87% (all-time high back then, and there were 349 tokens with actual trading volume back then), this was followed within 1 week by a mini alt-coin rally. Alts saw a 2.7X gain (nearly a triple) in 7 weeks. pic.twitter.com/sL812nxwq4

— Thomas Lee (@fundstrat) September 6, 2018

CRYPTO: 3/ While we recommend sticking with #BTC (etc), the alt-coin correction index does seem to suggest this latest downdraft is actually a tactically positive signal for alt-coins.

— Thomas Lee (@fundstrat) September 6, 2018

So far, Lee hasn’t offered his rational for the recent crypto market sell-off.

Current speculation includes market manipulation and a recent report from Business Insider that cites anonymous sources who say Goldman Sachs has shelved plans to create a Bitcoin trading desk in the near future.

Related: Neural Network Prompts Speculation of Bitcoin Market Manipulation in Recent Crypto Dip

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