Bitcoin (CCC:BTC-USD) is the crypto market’s biggest and at times, most celebrated asset. And during other occasions like in today’s market, quite simply “it is what it is” with regards to the digital currency champ. Let’s dive both off and on the price chart to unlock that somewhat cryptic message and how tomorrow’s BTC investors might buy the digital token with less risk and greater odds of success.
When it comes to Bitcoin, there is no shortage of what BTC is worth and its relevancy to investors. Ark Invest’s Cathie Wood – as savvy a soothsayer as you’ll find on Wall Street – these days has been an outspoken proponent.
The swashbuckling investment manager owns more than 7.5 million of shares of Grayscale Bitcoin Trust (OTCMKTS:GBTC) in its Next Generation Internet ETF (NYSEARCA:ARKW). The firm has its reasons, too. Ms. Wood envisions BTC as a new safe haven trade and argues the crypto offers insurance against unhinged monetary policy and even wealth segregation. In her estimation, which has been wise to follow, she sees BTC’s market cap extending firmly into the trillions of dollars and far north of today’s $1 trillion flirtation.
Far From Alone on Bitcoin
As mentioned, Ark Invest is far from alone in its bullish commitment to BTC. A brief perusal of headlines for Bitcoin suggests the decentralized finance (DeFi) champ could surge to $300,000, albeit caveating the five-fold ride with a warning a brutal crypto winter for the digital currency could arrive first.
Other devout analysts, in this instance bowing before both Bitcoin and Islamic finance, predict BTC could trade over $111,000 per token this year. And more famously above the other crypto zealots on the planet, earlier this year the CEO of cryptocurrency platform Kraken has stated BTC could be worth at least $1 million per coin.
But today shares of BTC are down a fairly stiff 5%. And the past three months have been anything but a walk in the proverbial park for bulls. But to be fair in a market known for its often-whimsical behavior, there are good reasons for the excitement. Right? We’re all buying and selling using BTC these days, right? Yeah, not exactly. Most of us have yet to buy a slice of pie with Bitcoin or rather and today, a down payment on a Domino’s (NYSE:DPZ) franchise.
Still, given the digital currency’s important implications for allowing businesses to operate more efficiently and securely in the years to come, there’s something very real to Bitcoin. As well, and with cutting edge companies Square (NYSE:SQ), Tesla (NASDAQ:TSLA) or even staid MassMutual exposing their businesses to Bitcoin and only the U.S .dollar and euro larger in terms of circulated currency, there’s other reasons to remain positive. However, that doesn’t mean buying BTC today is a great idea.
Bitcoin (GBTC) Weekly Price Chart
Source: Charts by TradingView
Closer to home and a revelation nearer to today’s fair value pricing of $54,150 and chinny chin, chin valuation of $1.01 trillion, Bitcoin is expected to rise with $60,000 following a “leverage wipeout.” That was days ago with BTC fetching roughly 4.5% more than May 4. Maybe there’s still some unwanted stragglers?
Bottom line, BTC is still the de facto crypto heavyweight, but a first-mover advantage is also never an absolute guarantee of anything.
Moreover, it certainly doesn’t preclude an inevitable bearish or corrective cycle from happening now and again. And right now, that’s exactly what’s playing out in Bitcoin.
On the provided well-doctored weekly chart of GBTC, a very well-supported high-level double-bottom base confirmed its second pivot out-the-gate Monday by a hair. With shares of Bitcoin firmly entrenched within the weekly candlestick, what was a classic sign of a corrective cycle nearing completion has had a monkey wrench thrown at it.
Wait for a Second Reaction
My advice for those wanting to buy Bitcoin through GBTC is to wait for a second reaction through the hammer pivot high of $48.21. It’s a prudent strategy which averts owning shares as an increased chance of pattern failure is happening.
And from there, should it signal?
Hopefully, the sky is the limit or rather $111,000, $300,000 or more happily $1 million in BTC. At a minimum though, with any luck bulls won’t be technically compelled to pull the plug before Bitcoin adds some real dollars to our trading accounts.
On the date of publication, Chris Tyler holds, directly or indirectly, positions Grayscale Bitcoin and Ethereum Trusts (GBTC, ETHE and ETCG), Ark Invest Funds (ARKK, ARKG) and their derivatives, but no other securities mentioned in this article.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100% the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.