Investing in Bitcoin (BTC-USD) is full of potential because cryptocurrency is still a relatively new asset. There is still a huge basket of people who refuse to acknowledge it as an asset. But therein lies the potential for the future of BTC-USD prices. As Bitcoin wins over more and more of those doubting investors, the increased demand will be good for Bitcoin prices.
I do understand many of the reasons behind the skepticism about BTC. I had to overcome some of them myself before jumping in. The first step was to realize that there aren’t real experts. The whole field is too dynamic to nail down. Therefore I’ve been successful trading Bitcoin by simplifying things.
At the base of my approach is to treat Bitcoin like just another stock. My method relies on the fundamentals, but with a very heavy influence from charts.
Where Bitcoin Stands
The current Bitcoin trade has been unfolding for four months. Late last year, I identified a potential pitfall near $46,000. My thesis was that if Bitcoin lost that level, it would be at risk of a sharp correction.
I presumed that said correction would unfold in three waves, and it included a bounce near $33,000 per coin. Eventually, if all three waves complete then BTC-USD may revisit the December 2020 breakout from $20k.
It sounds silly but I didn’t see it happening in a fiery crash. The first bounce happened on schedule, and I deployed one third of my position in crypto. This time I opted to not use Bitcoin, but rather start building other budding coins like Solana (SOL).
Today prices are above my $46k neckline but I need it to hold convincingly. BTC has had attempts before that failed, but this time it could be different.
I would be happy with either outcome, since I am already long and very green.
Bitcoin Is Here to Stay
Long term, I am optimistic about the outlook of digital currencies. Central banks ought to worry about that.
This year’s Bitcoin range has been wide and broad between my two zones. Whichever one breaks first will carry momentum in that direction. So, if this attempt at pushing above $46,000 fails, the next test of support better hold. Otherwise my secondary bearish leg would target $28,000.
These numbers might upset some of the Bitcoin faithful, but please note that I am not bearish. I already mentioned deploying new positions when Bitcoin fell to $33,000. This left me with handsome profits. I have already planned to add two more batches lower if the selling persists.
If I’m wrong and Bitcoin recovers the Jan. 5 neckline, then I’m already long.
They don’t ring bells at perfect entries and exits. That’s why I developed my modular thesis. My forecast from last year called for three entries and I’m still in the first of them. I am patiently waiting to see the outcome of this battle this week.
If the bulls recover last year’s glory days, then I will enjoy my win with a partial position. I’d rather do that than wait for a perfect all-in moment. Patience is a real asset when trading Bitcoin.
I urge readers who are shy about participating to just dip their toes in the crypto pool. It is amazing how cheap it is to start. Most platforms allow for partial coin ownership, so you don’t need $45,000 to buy Bitcoin.
The cryptocurrency concept may be foreign to many still, but understanding it is absolutely essential to our financial future. Not every technology will make it, but these are the concepts that absolutely will. Getting a head start learning decentralized finance is essential.
And if you do get started, then pullbacks in top-tier cryptos like Bitcoin are excellent entry opportunities.
On the date of publication, Nicolas Chahine held SOL coin. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
