Fundstrat’s Tom Lee stated Bitcoin passed a major stress test when it rallied during a weekend surge in oil prices tied to Middle East tensions. He argued this indicates the asset is re-emerging as a credible store of value after a historic deleveraging event cleared market speculation.
Fundstrat’s Tom Lee said Bitcoin passed a major test after it rallied over the weekend while oil prices surged due to the ongoing conflict in the Middle East. According to him, this price action signifies that the massive deleveraging from last October is finally behind the market.
He pointed out the crypto market had already been through its bear market. “We had a bear market already in software, the Mag-7 and in crypto,” he said.
Lee noted Bitcoin’s recent performance during market stress contrasted with its behavior last October. “Bitcoin did basically break on October 10 because that was the biggest deleveraging event in the history of crypto,” he stated. “When gold went up, Bitcoin went down.”
He asserted that the market has now cleared out much of its speculation and leverage. Lee cited Bitcoin holding above $70,000 as oil prices climbed sharply when Iran closed the Strait of Hormuz. “This weekend kind of showed Bitcoin is coming back in vogue as a store of value,” he concluded.
As of the time of this writing, Bitcoin was trading at around $70,000 per CoinGecko data. Over the past week, it is up about 3% although it remains down around 12% year-on-year.
The picture from on-chain data is mixed according to Binance Research analysis. Approximately 29,000 BTC were withdrawn from exchanges while the price traded between $65,000 and $75,000.
