Bitcoin Breaks Out as ETF Inflows Accelerate

In my previous report, I shared my three options for buying Bitcoin:

• Buy the dip at $36K

• Buy the break out above $45.5K

• Dollar cost average now because it’s not going to make a big different in the long-term

I chose to buy then, but via Coinbase stock, and that’s in profit for me. (I’ll share an update on that later)

Last week, the break out trade was signaled. Let’s take a look at how it played out and what happens next:

Bitcoin had been trading in a ~10% range for about 2.5 months. At the end of last week, it finally made a move—to the upside. It broke out of the top of the range, triggering a bullish signal.

Bitcoin is now on it’s 6th straight month of positive performance. It continues to show strength—despite the scary narrative about GBTC outflows.

Bitcoin did pull back about 21.5% from low to high around the ETF approval news. I played that by shorting MicroStrategy, which went down even more than Bitcoin. (I covered that short after a 30% gain).

What happens next? According to the weekly chart above, it can pull back a bit, or it can consolidate for a bit, but there’s not much to be worried about in the long-term.

Let’s take a look at the monthly chart to see why:

Bitcoin’s monthly chart makes me bullish for two reasons:

• It’s in a clear uptrend

• The next major area of resistance is around $59K and we’re well below that

The longer your time horizon, the less you need to worry about your exact entry point(s). Similar to how I said in my previous report that buying at $36K isn’t that much better than buying at $40K in the long-run. Buying at $45.5K isn’t that much better than buying at $48K in the long-run.

Here’s what would make me bearish on Bitcoin:

• Teleporting to $60K within the next month or two. That’s a key resistance level plus it would likely happen along with sentiment getting too bullish.

• Pulling back below $45.5K back into to the recent weekly range. This wouldn’t make me bearish per say, just not bullish in the short-term.

• A bad fundamental news event such as one of the ETFs messing up their custody, or inflows slowing down.

TLDR: Bitcoin looks bullish in the long-term.

Now let’s take a look at Coinbase stock, ETH, and close out with the latest ETF flow data.

I bought Coinbase stock a few weeks ago as a way to express a bullish trade on Bitcoin because:

• It’s been in an uptrend

• It pulled back to a nice support level

I’m playing this as a conservative swing trade rather than an investment, so I’ll be taking profits at $160 if it gets there. However, $175 seems doable, and much higher longer-term.

I'm more bullish on BTC than ETH right now because the ETH/BTC chart looks bad, but you don’t need to decide between one or the other, you can own both. I own some ETH because the ETH/USD monthly chart looks good:

I’m long-term bullish on ETH because:

• It’s been in an uptrend

• It just broke out above a key resistance level / reclaimed the bottom of a prior range

I’d be bearish on ETH if it dropped below $2,200, or if another layer 1 blockchain starts gaining more traction.

GBTC outflows have slowed down, and inflows into the new 9 ETFs have accelerated.

Bitcoin is trading hands from crypto native custody to Wall Street. Fortunately, the total size of the pie is increasing.

GBTC still manages a ton of Bitcoin, but as long as the other ETFs keep soaking up the outflows, we should be all good.

Bottom line: Fundamentals and technicals look bullish.