Bitcoin is back, according to longtime bull Tom Lee.
Despite the cryptocurrency's drop in early Friday trading – a symptom of worries around the legitimacy of another digital currency called tether – it's going higher, and may even be in a bull market already, Lee tells CNBC.
This is a terrible year for crypto, a massive bear market, and we just published this week just highlighting … 11 signs that historically only take place in a bull market. Fundstrat Global Advisors, said Thursday on "Futures Now."
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The first sign came in January, when Lee's team noticed the trading volumes on the blockchain – a technology to turn over and sell bitcoin – turned positive year over year. That boost was helped by turmoil in Venezuela and Turkey, where people lose faith in their countries currencies may have turned to bitcoin as an alternative, Lee explained.
"Just taking those two countries, they're close to 30% of the increase in on-chain activity, so it's meaningful," he said. I'm going to start using bitcoin. 'People are saying,' Look, I do not trust using local currencies. '
The second sign came in April, when bitcoin closed above its 200-day moving average, a widely accepted technical indicator of bullish momentum.
The third sign from a fund survey survey of over-the-counter brokers, who said they are "really important in terms of institutional investor trade crypto." They have 60% to 70% increase and trading per client surged.
Crypto hodlers, "Lee said," using the cryptocurrencies rather than trading or selling them .
Lee's eight other bullish signs include shrinking supply; a swing to the positive in Fundstrat's Bitcoin Misery Index; consensus among "original" bitcoin bulls that has been put in for bitcoin; and a recent "golden cross" for bitcoin, or when the 50-day moving average overtakes the 200-day.
All this, he said, goes to show that bitcoin's not done climbing, and that these are "likely" to drive it to new all-time highs "around" 2020.
Lee, who predicted a 2019 bull market for bitcoin in March, added that the cryptocurrency's standard deviation from the S & P 500 – which could be about 2.5 – could also help push it higher.
"One thing to keep in mind is the S & P has made a big move, … it's almost always a big move in crypto later this year," he said. "So I think … a 2.5 standard deviation move for bitcoin would take it to $ 14,000." I'm not saying that's where it's going to go, but that's the magnitude of the move that would be a catch-up. "
Bitcoin traded in a broad range Friday in the broader cryptocurrency market, settling in the $ 5,100 per coin range. CNBC that tether's issues do not have much effect on bitcoin, "since most people are" long tether because [they] do not want to be long bitcoin. "