Bitcoin Rallies After BlackRock Files for ETF
This report covers:
BlackRock files for Bitcoin ETF—and other fundamental catalysts
Why Bitcoin's weekly chart looks ridiculously bullish right now
Read time: 4 minutes
TLDR—my outlook and game plan: I suspect Bitcoin will continue to rally to $33-35K. I plan to buy a pullback after that or a break out above $35K.
BlackRock Files for Bitcoin ETF
TLDR on Fundamentals: Despite the regulatory attack on the industry, crypto has not died. TradFi might be coming to the rescue to take the asset class to the next stage of its adoption curve.
Here are the top stories moving the markets this week:
$9 trillion asset manager BlackRock filed for a Bitcoin ETF. Although it seems likely that it will get approved, it would take several months before it actually launches. None the less, this is a nice stamp of approval for Bitcoin from the financial services giant and it should bring in some investors who lost trust in the products that they have available now.
Citadel, Fidelity, and Charles Schwab launched a new exchange platform, called EDX Markets. I would assume that all of these companies wouldn't be getting into crypto now if there wasn't demand from their investor clients.
I haven't heard any news or rumors of people being unable to withdraw their funds from Binance (yet?). From the outside, and as an amateur, it does look like Binance had poor financial controls. However, if they can survive this attack from the SEC without being proven insolvent or fraudulent, it would be a good sign. It will be difficult for Binance to fully recover financially from Gensler's public slander. Fortunately, TradFi might be here to pick up the pieces and help re-instill trust in crypto.
For the first time in 15 months, and after 10 consecutive rate increases, the Fed did not raise interest rated at their meeting last week. They’re expected to raise again at the end of July, however, if/when they do, lower rates could be a huge macro catalyst for Bitcoin.
Bitcoin’s next halving happens in about nine months. It seems like things are lining up for bullishness after the halving like in past market cycles.
Why Bitcoin's Weekly Chart Looks Ridiculously Bullish
TLDR on Technicals—here are the four bullish signals:
Broke out from short-term downtrend that started in mid-April (thin green line)
Long-term uptrend since November ‘22 lows still intact (grey icons)
Held above the $25K break out point (grey box)
Reclaimed the 200-week moving average (blue line)
I wrote last week that if Bitcoin reclaimed the 200-week moving average that it would be a buy signal, but that I would not buy primarily because trading volume on exchanges is at multi-year lows, so I didn’t have a high degree of confidence in how meaningful the recent choppy moves are in terms of signaling future direction.
However, the fact that Bitcoin didn't crash despite the regulatory attack on the industry, and the fact that Bitcoin has made such a strong move lately (this is the largest weekly candle since the SVB collapse) make me more confident that we can continue higher now.
I might be missing out on a potential 20% move up to the next resistance zone at $33-$35K (orange box), but I'm at peace with it because there are always more opportunities.
Here’s my game plan now:
Buy a pullback after Bitcoin rallies higher. I need to see how price action develops before I can create an exact entry plan for this.
Buy above $35K because it would be a break out above a key resistance level and an incredible sign of bullish strength in the market. I would expect continuation higher if this plays out.
If Bitcoin closes this week below $28K (thin green line), I'd flip to bearish because this would represent another lower-high within the short-term downtrend that started in mid-April.