Bitcoin has broken the sentimental support line at $6,000 and has dipped into the $4,200 region after staying in the $6,500 price range for the whole of October.
Fundstrat’s CEO, Thomas Lee aka Tom Lee, in a CNBC interview, explained that the sentiment in the Bitcoin and cryptocurrency markets, in general, are playing a massive role as Bitcoin has shattered the support lines. He said:
“Markets around the world are fragile, and panic and sentiment are playing a disproportionate role right now, does this mean bitcoin is broken? No. The use case is still there, but in the short term, panics are panics.”
He explained that Bitcoin’s use-case will always remain the same no matter how much panic and FUD exists. Lee added that bear markets cause assets to fall and that is exactly what is happening right now, people are panicking.
Lee went on to say that the sudden drop in Bitcoin prices can be attributed to two reasons. He said that the price drop below the $6000 triggered the “stop-losses” for traders which deteriorated the price of Bitcoin to lower lows.
The second reason, according to Lee, could be the Securities and Exchange Commission [SEC]’s probe and enforcement into multiple cryptocurrency projects.
SEC’s chairman, Jay Clayton has put out his intentions regarding every other cryptocurrency except Bitcoin and Ethereum being considered as securities. He said that SEC would regulate every other cryptocurrency as securities.
Lee spoke recently on CNBC and re-adjusted his end of the year prediction for Bitcoin to $15,00 based on the research by the Fundstrat’s research team. According to their data science-research team, Bitcoin has surpassed the break-even price at $8,000 and reached $7,000.