Ether, the world’s second-most popular digital coin, is poised for a strong rally following a severe sell-off this year, according to cryptocurrency advocate Thomas Lee.
Lee, who is a Managing Partner and Head of Research at independent research boutique Fundstrat Global Advisors, wrote in a note to clients that the token is about to “stage a trend reversal”.
Ether has lost half of its value in the past three months and has underperformed large-cap coins by two standard deviations, which could signal it is ripe for a rebound, he says. The token has suffered as investors retreated from the virtual asset market, with its value plunging by more than 80% since mid-January.
According to the former JP Morgan Chief Equity Strategist, Ether’s poor performance has been caused by heavy supply being sold from EOS, questions about its blockchain technology’s road-map and “panic selling” by initial coin offering (ICO) teams.
“Sentiment is currently overly negative,” Lee claims. He points out that when Ether has underperformed peers by two standard deviations in the past, it has reversed those losses.
Overall, Lee expects Ether to reach $1,900 (£1,455) by the end of the year, up from its current value of just $230 (£176). Meanwhile, he has a $25,000 (£19,144) price target on Bitcoin, which is currently trading at around $6,800 (£5,207).