Tom Lee, the head of research at independent financial analysis firm Fundstrat, reiterated his optimistic outlook for Bitcoin prices and predicted that the cryptocurrency is likely to reach the $100,000 mark by the end of this year.
Optimistic Bitcoin price outlook
In a recent appearance on CNBC's Squawk Box, Lee discussed the political landscape's implications following Donald Trump's victory over Kamala Harris in the presidential election, suggesting Bitcoin could play a key role in the upcoming government.
Lee clarified that Bitcoin can serve as a solution to some of the financial challenges facing the U.S., especially if it is designated as a national reserve asset— a commitment made by Trump earlier this year at the national Bitcoin conference in Nashville.
The Fundstrat executive also emphasized Bitcoin's robust security features and its underlying blockchain technology, believing these elements position it as a viable alternative to some existing financial structures.
Lee believes that Bitcoin's attributes can address several issues inherent in the current economic framework, further enhancing its appeal among investors.
In discussing his price prediction, Lee expressed confidence, saying, "I think it makes sense to exceed $100,000 before the end of the year."
Lee pointed out that the current trajectory of Bitcoin prices aligns with historical patterns observed during previous halving cycles, events that typically reduce the creation rate of new BTC and ultimately have a positive impact on price trends.
Key support levels to watch
Cryptocurrency analyst Ali Martinez also provided insights into the current price dynamics of Bitcoin, comparing it with historical market behavior. He noted that during the 2017 bull market, Bitcoin surged 156%, surpassing previous historical highs, and then experienced a substantial -39% correction.
Similarly, in 2020, Bitcoin rose 121% before correcting -32%. Based on these patterns, Martinez believes Bitcoin could reach at least $138,000 before facing its first significant adjustment.
Further analyzing past trends, Martinez noted that Bitcoin initially surged 26% after breaking the historical high of $19,700 in 2020, consolidated for about a week, and then jumped to $40,000.
Currently, Bitcoin has risen 28% after breaking previous historical highs and has been consolidating for the past six days, leading Martinez to speculate that history may repeat itself.
However, he also warned that Bitcoin may be on the brink of a sharp correction. He emphasized the growing sense of greed among crypto enthusiasts, evidenced by a significant surge in Google searches for Bitcoin, which reflects the profits realized by investors, totaling over $5.42 billion.
From a technical analysis perspective, Martinez marked the TD Sequential indicator, which issued a sell signal on Bitcoin's daily chart. Additionally, the Relative Strength Index (RSI) indicates that Bitcoin is currently in the overbought territory, suggesting a price correction may be imminent.
If a correction occurs, Martinez identified key support levels to monitor, particularly between $85,800 and $83,250, and further down to between $75,520 and $72,880.
The analyst emphasized that to maintain a bullish outlook, Bitcoin prices need to hold above a daily close of $91,900. Such a close could invalidate bearish sentiment and potentially trigger a breakout towards the $100,680 target.
At the time of writing, the leading digital asset was trading at $90,970, having risen nearly 2% in the past 24 hours.
