Bitcoin on the path to new all time record highs

Bitcoin has topped $57,000 for the first time since 2021. And from a technical perspective, the world’s largest cryptocurrency is on the path to printing new all time record highs.

In terms of fundamentals? The Bitcoin ETF. This was the catalyst many bitcoin bulls were waiting for. An ETF makes bitcoin ‘legit’ in the eyes of Wall Street and mainstream financial media. Why? Well because now major institutions can have positions in bitcoin without holding the actual coin. A Bitcoin ETF provides investors a way to gain exposure to Bitcoin via holding existing and traditional financial instruments. A Bitcoin ETF gives investors exposure to the value of Bitcoin without directly owning it. 

ETFs trade on traditional stock exchanges, and their value should rise when the underlying asset increases in price, or fall if it decreases.

And are institutions looking at cryptocurrency as a new asset class? It seems so.

With the recent price move in bitcoin, this past Monday’s trading volumes total passed the previous high mark set on BlackRock’s spot bitcoin ETF. Let me say that again. BlackRock’s bitcoin ETf saw record daily trading volume. More than 42 million shares of the iShares Bitcoin Trust (IBIT), worth roughly $1.3 billion, had been traded on the day as of 3:30 pm ET.

The $1.1 billion in trade volumes marked the highest daily mark for IBIT in its six-plus weeks on the market. The nine US spot bitcoin funds — excluding the Grayscale Bitcoin Trust ETF also collectively saw a record $2.4 billion in trading volumes Monday.

And what do bitcoin bulls see for the price of bitcoin? This:

We are going back to the moon! And it is hard to disagree with them given the recent price action. I trade what I see, not what I want to see.

If we start off on the weekly timeframe, you can see bitcoin is actually displaying market structure very cleanly. The downtrend ended with a break above $24,000 back in March 2023. We even had a dirty looking inverse head and shoulders pattern. Again, nothing is textbook when it comes to these patterns. All that matters is the market structure being displayed.

Since that pattern break, we had the retest of $24,000 and multiple higher lows. I wait for the first higher low to indicate the start of a new uptrend, and bitcoin is now on its second on the weekly timeframe. Things have been very bullish for bitcoin since the rumors of the SEC approved ETFs.

The major $50,000 psychological zone has been taken out, although I would bring support down currently to the $48,000 zone. $60,000 is the next resistance level which is about to be tested. Bitcoin could see a pullback as profits are taken. A weekly candle close above $60,000 sets us up for a retest of previous record highs and likely, a breakout into new all time record highs.

The daily chart is my preferred way of swing trading and you can clearly see the uptrend. There was a brief pullback/corrective wave when bitcoin broke below 42,000 earlier this year, but the uptrend remains intact. The higher low on the daily chart comes in at $50.513. A close below this could lead to a brief pullback to retest the $48,000 zone.

To call a shift in trends, an uptrend to a downtrend, would require multiple lower highs and lower lows. Trend shifts do tend to happen at major support and resistance levels so there is a chance bitcoin rejects at resistance.

For those with trigger fingers who want to trade bitcoin as it can be traded 24/7, I suggest going down to the daily chart. Here you can see multiple higher lows. The bullish trend is strong as there has been limited pullback. Upwards momentum is strong after the breakout above $52,800.

This price level is the major support on the intraday 1 hour chart. The current higher low comes in at $56,320. A 1 hour candle close below this level would see a larger pullback. The past few hours of price action has shown that bitcoin is ranging. There is a battle between the bulls and the bears here so it is worth watching.

But don’t let bitcoin have all the fun. Ethereum looks very bullish as well. The weekly chart is about to possibly confirm a major breakout here. I say possibly because we need a weekly candle close, and we still have multiple more trading days left in the week. But it looks like $3000 is major support, and buyers have jumped in on the brief pullbacks. $4000 is the next target before breaking out into all time record highs.

How about some doom and gloom before I end this article?

The full article can be read here. Just something to think about as talks of a central bank digital currency (CBDC) gains steam. Myself? My cryptos are off of the exchanges.

Oh and while I have your attention, be sure to check out my recent article on Japan. A “see I told you so” piece. Perhaps this Bitcoin article will by my next big technical call.