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Bitcoin Edges Closer to Breakout Territory

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I wrote about Bitcoin (BTCUSD) on May 5th.

That was my first public analysis, but I have been telling Daily Price Action members about my involvement in Bitcoin since early April.

To summarize, I’ve been buying Bitcoin every day for the last six weeks.

Before I get into the details, I want to make it clear that I’m writing to you today as an investor in Bitcoin, not a trader.

Most of you know I don’t use fundamentals when I trade.

However, I do take fundamentals into account when I invest.

With that out of the way, let’s talk about why I have been buying Bitcoin.

Apart from having incredible technicals, Bitcoin is a play on central bank intervention and plummeting US bond yields, among other things.

Think about it like this:

Where do investors go for yield when central banks are printing like mad, equities are unstable at best, and US bond yields are crashing?

One obvious answer is gold.

But the other, at least for me, is Bitcoin.

If you read my May 5th commentary, you know about the halving that took place on May 11th.

That was a significant event for Bitcoin as it cut the supply of newly minted coins by half.

We know the previous two halvings in 2012 and 2016 triggered multi-month rallies.

BTCUSD (Bitcoin) weekly time frame

The fact that Bitcoin is tightening its supply at a time when central banks around the world are inflating their balance sheets is a big deal.

That divergence alone is appealing to investors including myself.

Just last week, legendary fund manager Paul Tudor Jones announced his stake in Bitcoin as a hedge against inflation.

And he won’t be the last.

Keep in mind, however, that as long as the market trades below 10,000 on a weekly closing basis, it’s susceptible to pullbacks.

But as I mentioned last week, I’ll continue to accumulate on dips with a one to two year investment horizon.

Key support comes in at 9,000, 8,300, and 7,700.

A weekly close above 10,000 would open the door to 12,800 and 19,700.

Want to watch the BTCUSD video I just released in the member’s area?

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BTCUSD (Bitcoin) weekly time frame

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7 comments
Justin Bennett says

Want me to help you become a better Forex trader?

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Gordon says

Justin,
Where and how can I buy Bitcoin? Can you trade it just like USD/GBP?
Hows the best way to make a small investment in Bitcoin.
Thanks your help.

Reply
    Justin Bennett says

    You can use a service like Coinbase. There are many others depending on where you live.

    Reply
      Gordon says

      Justin, Thanks for info. I am in USA

      Reply
Andrew says

Yes its is BTCUSD and you can trade it just like any other pair.

Reply
Colin de Ste says

Ill have to stick to Gold and Silver. (-:

Reply
    Justin Bennett says

    Why not own all three? Bitcoin has outperformed gold and silver in the short time it’s been around.

    Reply
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