Tom Lee, the co-founder of Fundstrat World advisors and a well known bitcoin bull, has not too long ago revealed by means of social media his agency created an “altcoin correction index” that exhibits the market’s downward development was a “tactically constructive sign.”
In response to Lee’s tweets, the altcoin sell-off noticed his altcoin correction index, which “measures what % of alt-coins are down 70% from their 9-month excessive” hit a brand new all-time excessive of 97%. Its earlier excessive was again in October of 2014.
CRYPTO: 1/ To place the alt-coin sell-off in a historic context: we created an "alt-coin correction index" which measures what % of alt-coins are down 70% from their 9-month excessive. Not too long ago, this index hit 97%, the best studying since 10/25/14. pic.twitter.com/0Oy9lgzHMQ
— Thomas Lee (@fundstrat) September 6, 2018
On the time, Lee added, the determine hit 87% and shortly after most altcoins noticed their value almost triple in a 7-week bull run. Again in 2014, he famous, there have been solely 349 altcoins with an “precise buying and selling quantity.”
In a subsequent tweet the Wall Avenue analyst clarified the agency nonetheless recommends buyers keep on with bitcoin, the flagship cryptocurrency, though the index suggests the downward development was constructive for altcoins.
In response to a reply questioning whether or not the index wrongly implied the entire variety of altcoins hasn’t modified all through time, Lee revealed it’s primarily based on an index that tracks round 700 liquid altcoins.
In response to accessible information there are actually nicely over 1,500 altcoins available in the market. Fundstrat’s index seemingly tracks these with the biggest market cap as those often have the most liquidity, together with EOS, ethereum, bitcoin money, XRP, ethereum traditional, litecoin, sprint, and NEO.
Lee, as CryptoGlobe not too long ago lined, has argued BTC could end the year “explosively higher” resulting from a correlation between the flagship cryptocurrency and rising markets. The analyst has been sustaining a $25,000 bitcoin price prediction all through the bearish development.
Though the analyst’s index seemingly makes a bullish case for altcoins within the close to future, Lee has up to now defined he would prefer to own bitcoin over ethereum and litecoin, and bitcoin money over XRP.
It’s price noting he predicted BTC would rally after this 12 months’s Consensus convention. On the time BTC’s value really dropped, and though his prediction went awry he owned up to it and explained the drop was attributable to a scarcity of regulatory readability.
The altcoin correction index isn’t the primary crypto-related index Fundstrat created. Earlier this 12 months, he created a “Bitcoin Misery Index” that was signaling it was time to purchase the cryptocurrency in March.