Big Beautiful Breakout
Good evening, and welcome to this week’s edition of Stealth Trades!
“[Trump voice] Would you look at that? What a beautiful move. Look at that breakout. Wow. I know breakouts and let me tell you… this one is the best. Really incredible.”
In all seriousness, this is a textbook move. If you didn’t get my text yesterday, Bitcoin broke out from a near perfect consolidation base.
After climbing nearly 50% from April to May, BTC consolidated for two months. A series of shallowing pullbacks and a clear resistance level formed the setup. And the buy signal was a breakout to new all-time highs.
The chart above is actually an IBIT – an exchange traded fund that holds bitcoin but trades like a stock on the regular stock exchanges.
Purists like to buy the actual cryptocurrency. I don’t trust most of those sketchy offshore crypto brokers, plus it is easier to buy an ETF since I can do it from any major brokerage account.
Bitcoin, at least to me, is one of the easiest instruments to trade. Since it has no sales or earnings like stocks, there are never any surprises. Transactions are driven purely by supply and demand.
Because of this, it tends to trend well and trade in an orderly manner.
Below is a chart of Bitcoin over the last few years. Notice the pattern…
Strong move. Consolidation.
Strong move. Consolidation.
Strong move (which was stalled by the trade war). Consolidation.
It’s rinse and repeat. Nothing is guaranteed. And when the stock market undergoes a deep correction, BTC tends to follow suit.
But right now, the major indexes are trading at all-time highs. Inflation is tamed. GDP growth is healthy. And analysts expect 6 rate cuts over the next year and a half.
The stage is set for another powerful move higher for Bitcoin.
Best wishes for your trading,
