Bitcoin Bounces as ETF Inflows Impress

This report covers:

• The latest GBTC outflow and ETF inflow charts

• Long-term outlook and game plan for BTC and ETH

• Why I’m turbo bullish on stonks

Sentiment: Bullish

• Many people are bearish because they’re worried about GBTC outflows (sentiment is a contrarian indicator)

Fundamentals: Bullish

• The new Bitcoin spot ETFs are receiving strong inflows, absorbing much of the GBTC outflows

• The Fed is expect to cut interest rates aggressively in 2024

Technicals: Neutral

• Monthly chart is in an uptrend (bullish)

• Below $45.5K resistance (bearish)

• Above $35K support, but not close enough to it to be a screaming buy (neutral)

Game plan

• I still think Bitcoin can pull back to around $36K, but waiting to buy there vs DCA-ing now isn’t going to make that much of a difference from a long-term perspective

• I’m more bullish on Bitcoin than ETH because ETH/BTC has retraced back down below the 0.055 level.

Grayscale has now sold over 100,000 Bitcoin because of GBTC shareholders selling shares. The selling, as well as the narrative that the dumping could continue, has put downward pressure on Bitcoin’s price.

Fortunately, the new spot ETFs are absorbing much of the GBTC outflows. It seems that many GBTC shareholders are rotating into other ETFs with lower fees.

Bitcoin is changing hands from crypto natives to Wall Street. Crypto is moving from the Missionary Era to the Mercenary Era. I expect that Bitcoin will continue to perform well in this new era, but not as well as in the past.

Bitcoin pulled back to the top of the green box zone that I’ve been talking about buying. This wasn’t enough of a signal for me to buy BTC, but it was enough for me to cover my MSTR short trade (which was a huge 30% win for me).

BTC has had a nice bounce off this area. Bitcoin is up about 5% today. Is the dip over?

I was hoping to be able to buy in the middle or bottom of the green box at around $36K, and I think it’s still moderately likely that Bitcoin gets down there in the coming weeks. However, I’m transitioning my strategy from swing trading and timing market cycles to dollar cost averaging and long-term holding, and there isn’t much difference between buying at $35K and buying at $40K in the long-term.

I now see three good options for buying Bitcoin:

• Buy $36K (as I’ve been talking about in the past few reports)

• Buy above $45.5K. This would signal to me that Bitcoin is unlikely to go back down to $35K and is likely to continue up to $58K in 2024.

• DCA now. If Bitcoin goes down to $36K, you get to buy $36K. If Bitcoin doesn’t go down to $36K, you get to buy now (below $45.5K).

Ethereum still looks long-term bullish on it’s monthly USD pair chart. However, it’s getting stuck in the green horizontal box area.

This area provides a clear line in the sand for being bullish or bearish on ETH:

• I’d be bearish below 2125 (I’d expect a scenario like the blue arrow line in the chart above)

• I’d be bullish above 2275

• I’m currently neutral because it’s smack dab in the middle

The ETH / BTC pair chart paints a more bearish picture:

ETH/BTC pulled back from the orange box resistance zone that I covered in my previous report. It pulled all the way back below the key 0.055 level and is no longer outperforming BTC this month.

I’d rather own BTC than ETH as of right now but I’m perfectly comfortably holding some ETH for the long-term because the USD pair chart looks fine.

The S&P 500 is breaking out above it’s prior all-time high in December 2021.

It could pull back and retest 4766 at some point in the next few months, but I think it would turn into support, and I’m very bullish on the stock market this year.

From a fundamental perspective, inflation numbers have been improving, and interest rate traders are expecting the Fed to cut interest rates aggressively this year.

I loaded up on S&P 500 index funds this week and took swing trades on a few individual tech stocks, including Coinbase:

I bought Coinbase yesterday because:

• It’s in an uptrend (dotted diagonal green line)

• It pulled back to a support area: thin horizontal green line + 20-week moving average (green rounded line)

• A lot of the GBTC outflows are getting sold on Coinbase so they should be racking up fees

• They’re partnered with many of the BTC spot ETF managers

COIN can certainly pullback further, which is why I have some slack in my stop loss, but the risk to reward ratio is still good enough for me to be pretty bullish.

I’m also long and bullish on Box, Hubspot, Toast, BlackRock, and JP Morgan.