The Mindful Investor

The Renewed Rise of Bitcoin

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In hosting The Final Bar on StockCharts TV, I get the opportunity to ask successful traders and market practitioners which charts are top of mind in their process at any given time. I've found this to be a fantastic way to track market sentiment from some of the top technical analysts in the industry, and it has helped me broaden out my own process of market analysis.

When we invite someone on the show, we let them bring whatever charts they want. So it can be very interesting to see which charts make the cut, given the fact that they could pretty much discuss any financial topic. So when two of my three guests chose to make a bullish argument for Bitcoin, it certainly made me take another close look at the chart.

Roman Bogomazov of Wyckoff Analytics spoke of the consolidation phase for Bitcoin over the last three months. He stressed that the crypto would need break out of that pattern to the upside, and, when it did (which was likely), then there was upside all the way to the previous all-time highs in the 61,000-64,000 range.

I would absolutely echo Roman's take on the chart, including the higher lows in February and March, which speak to increased buying power over the last two months. And with the positive move on Friday, Bitcoin appears to have broken out of Roman's consolidation range, opening up the way to much higher price targets.

Back on Tuesday, I had the pleasure of speaking with legendary trader and technical analyst Peter Brandt. Peter took a fairly long-term view of Bitcoin and reflected how the crypto has essentially been rangebound since early 2021. 

Now granted, that's a pretty wide range between 28,000 and 68,000, but his point is very well taken. The Bitcoin story is evolving not over days and weeks, but over months and years. As I like to say, "Make short-term decisions with short-term charts and long-term decisions with long-term charts."

Peter's point was twofold. First, Bitcoin is at the lower end of the range, and has plenty of opportunity to retest the upper end of that range near the 2021 highs. Second, the long-term story is bullish, and investors should understand that the long-term potential is positive until proven otherwise.

I like to remind investors that certain products, like leveraged ETFs, futures and cryptocurrencies, provide the opportunity for significant upside, but also significant downside. The potential opportunities are worth it as long as you weigh the potential risks.

My conversations with Roman Bogomazov and Peter Brandt confirmed what I have seen on my chart of Bitcoin. The short-term consolidation phase appears to be resolving to the upside, and there is plenty of daylight between current levels and the November 2021 highs. 

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my YouTube channel!


David Keller, CMT

Chief Market Strategist

StockCharts.com


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. 

The author does not have a position in mentioned securities at the time of publication.   Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

David Keller
About the author: , CMT is Chief Market Strategist at StockCharts.com, where he helps investors minimize behavioral biases through technical analysis. He is a frequent host on StockCharts TV, and he relates mindfulness techniques to investor decision making in his blog, The Mindful Investor. David is also President and Chief Strategist at Sierra Alpha Research LLC, a boutique investment research firm focused on managing risk through market awareness. He combines the strengths of technical analysis, behavioral finance, and data visualization to identify investment opportunities and enrich relationships between advisors and clients. Learn More
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