The greater than 20% sell-off in bitcoin this week should not be a shock to buyers acquainted with the cryptocurrency, based on Fundstrat’s Tom Lee.
In a tweet on Tuesday, Lee mentioned bitcoin is liable to corrections of 40%-50%, including that the sizable corrections are “a part of its DNA and its historical past.”
After topping out at greater than $58,000 over the weekend and eclipsing $1 trillion in market worth, bitcoin sold-off to a low of $45,000 on Tuesday amid risk-off sentiment amongst buyers resulting from considerations of rising rates of interest.
However the decline in bitcoin “does not change truthful worth” for the cryptocurrency, Lee mentioned earlier than reiterating his $100,000 price target. A surge in bitcoin to $100,000 would symbolize potential upside of 117% from Tuesday afternoon ranges.
Lee’s value goal for bitcoin is based on his view that 2021 represents an analogous setup to 2017 for the cryptocurrency: a parabolic rally following a halvening occasion. A halvening in bitcoin is when the reward for miners finishing issues on the bitcoin blockchain is reduce in half. Bitcoin accomplished a halvening occasion final yr.
“Appears on sale, proper?” Lee requested.