Brokers See Surge in Buying Activity as Bitcoin and Crypto Markets Stabilize
Although the crypto markets lost some of their upwards momentum last week when controversy abounded regarding the controversial stable-coin Tether and related cryptocurrency exchange Bitfinex, Bitcoin has been able to maintain its position in the $5,000 region, which has led the aggregated markets to remain relatively stable.
Although it still remains unclear as to whether or not the bear trend has truly come to an end, a surge in buying activity on over-the-counter (OTC) brokerages may be a sign of increased institutional interest, which could help add fuel to the next bull run.
Analyst: Bitcoin and Crypto Markets May Be in the Early Stages of Another Bull Run
Although Bitcoin’s quick move into the $5,000 region was certainly a positive development for the entire markets, and it is increasingly becoming clear that its 2018 lows around $3,200 are a long-term bottom, there is still much debate amongst analyst and investors as to whether or not the next bull run is currently in its early stages, or if further losses are imminent.
Tom Lee, a notable Bitcoin bull and the head of research at Fundstrat Global Advisors, reaffirmed his long-held belief that significant gains are imminent in a recent interview with CNBC, explaining that he believes there is an abundance of information that points to the possibility that the “crypto winter” is over and the next bull run is right around the corner.
“Last year was a terrible year for crypto, a massive bear market, and we published a piece this week just highlighting … 11 signs that historically only take place in a bull market. So I think the evidence is mounting that there’s a bull market,” he explained.
One of these aforementioned signs that Lee points to is growing crypto adoption activity in countries like Venezuela and Turkey, which signals that Bitcoin and crypto in general can, in fact, be used as a viable alternative to fiat currencies.
He also points to Bitcoin recently breaking above its 200-day moving average, its constantly shrinking supply, growing trading volume, overwhelmingly bearish market sentiment, and its recent “golden cross” formation as a few of the other major factors that he believes mark the start of the next bull run.
Institutional Investments May Provide Fuel for Next Bull Run
If the next bull run is parabolic and is anything close to that witnessed in late-2017, it’s going to require a significant amount of capital to fuel it.
Lee points to an interesting trend occurring in the OTC markets as another piece of evidence supporting his theory that the bull run is imminent, explaining that these brokerages recently told Fundstrat that OTC purchases have ballooned significantly in recent times – which may signal that more institutions are foraying into the markets.
“[OTC brokerages are] really important in terms of how institutional investors trade crypto,” he noted, further adding that trading activity levels for a number of OTC clients have surged 60% to 70%.
Although Lee’s predictions regarding the future of Bitcoin have been faulty on multiple occasions, it is possible that improving fundamentals may be enough to spark greater institutional interest, which may act as kindling for the next bull run.