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Global equities need to post fresh highs before Bitcoin re-enters its bull market, one of the industry’s best-known analysts has said.

In two tweets beginning on September 25, Fundstrat Global Advisors founder Tom Lee calmed fears about the state of Bitcoin 00 markets. 

The largest cryptocurrency fell 15% this week, causing many to raise concerns about a new protracted bearish phase appearing. 

“It’s overbought and needs to see weaker sentiment. Our (Bitcoin Misery Index) has been saying this since July… and it’s stuck time until S&P 500 ends this ‘trendless macro’ period,” Lee summarized.

As Bitcoinist noted, the S&P 500 shed value just before Bitcoin’s own drop on Tuesday. For Lee and Fundstrat, the two are closely correlated.

“The downturn in (Bitcoin) followed the risk-off selloff in (equities),” he continued in a further tweet.

This, he added, “reinforces our ‘unpopular’ opinion bitcoin does not do well in a ‘trendless macro’ environment.” 

Lee concluded:

“New highs needed in S&P 500 before $BTC can blast off. Why? We think crypto is retail and thus, risk on.”

Bitcoin’s fall to lows of $8000 prompted various theories to emerge about how the largest cryptocurrency could suddenly deflate to such an extent after almost six months of bullish advance.

Some, such as an alleged crash in hashrate, have already proven false. Others, such as the impact of Bitcoin futures settlement dates, continue to be subject to scrutiny. 

On Tuesday, just before the dip, fresh research warned that futures likely manipulated markets in the days prior to payouts. That would rationalize this week’s behavior, too, as Friday sees 50% of Bitcoin options interest expire. 

Lee meanwhile told followers to wait for his Bitcoin Misery Index (BMI) to flash more bearish. The metric gives an idea of market sentiment, and hit lows in December 2018 when BTC/USD dropped almost 50% to $3100. 

Now at 56, Lee says the ideal range for “favorable risk/reward” is between 40 and 53. At the height of the bull market in late June, BMI reached 92 on its scale of 0-100. 

At press time on Thursday, Bitcoin traded around $8400, having briefly hit $8600 before abruptly heading lower. Markets are now at their lowest since June 14.

What do you think about Tom Lee’s latest forecast? Let us know in the comments below!

Images via Shutterstock, BMI chart by Fundstrat

The post Fundstrat’s Tom Lee: Bitcoin Bull Market Will Follow S&P 500 Surge appeared first on Bitcoinist.com.

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