Dear Reader,
October has been quite a month for Bitcoin (BTC) and its crypto friends...
So much so that BTC clocked in a better than 30% jump (up from $27,000) in the last few weeks alone.
And while many may be looking at the recent "bad news" as a reason for lower prices ahead, I'm expecting a November rally ahead.
Here's why...
Bitcoin's Breakout is Just Getting Started
Isn't it amazing what a month can do?
Think about it... less than four weeks ago, Bitcoin couldn't seem to shake the mid-range of $20,000. Then suddenly, we get a hint of good news - and BTC skyrockets 30% in just ten days:
(To watch a video version of this article, click on the image above)
And the news that sent BTC hurling to $35,000?
To answer that, let's go back to June 15th of this year, when the world's largest asset manager, BlackRock, filed for SEC approval of its Bitcoin Exchange-Traded Fund (ETF)...
With all of the names out there filing for crypto approval (like the Winklevoss twins), what makes BlackRock's ETF any different from the roughly half dozen crypto ETFs already trading, such as BITO? To start, applications for physically-based bitcoin ETFs have been denied for the last ten years. So, most companies opted for futures-based ETFs instead due to the high approval rating of prior applications.
The problem is... this type of ETF is derivative-based, meaning it trades off of futures contracts. And between the management fees and contango (when the futures price of a commodity is higher than the spot price), these ETFs are always weighted against the long-term investor.
That's why I never suggest buying these for any extended period of time. But that might be about to change...
You see, BlackRock is applying for a physically-backed digital ETF, which means that this product will be backed by actual Bitcoin. And imagine how MUCH Bitcoin will need to be held in trust to support this ETF if approved - it's MASSIVE! All we need is the SEC to give approval...
Meanwhile, FTX founder Sam Bankman-Fried (SBF), was recently found guilty on all seven counts of criminal fraud related to the now-bankrupt FTX exchange. His sentencing is unlikely to happen until early next year. And until then, the media spotlight on this will continue to be a bit of a stain on the crypto community.
But...
Here's Why the SBF Scandal is GOOD News for BTC Holders
It's been widely said that when bad news is out and something stops going down, you have weeded out most of the sellers.
Think about this... in the last year, we've seen the collapse of Celsius (CEL) and Terra (LUNA) coins and the destruction of FTX. And what did BTC do? Well, it basically triple-bottomed in 2022. So, has crypto winter finally come and gone for the multi-year cycle of BTC?
Finally, there's what's to come next - halving.
To understand halving, you need to understand block rewards. Block rewards are awarded to cryptocurrency miners for being the first to solve a complex math problem and create a new block of verified Bitcoin transactions. Before 2013, each reward was 50 bitcoins. But this has been halved down a few times, and in April 2024, the reward will only be 3.125 - a mere fraction of where we started. That's because of the 21 million BTC to be mined, 90% are already in circulation. Projections are that the last Bitcoin reward will come around 2140.
So... what's next? Where do we go from here?
Well, some basic math on the recent chart shows a wide triangle that starts around $19,000 and runs into resistance around $31,000. Now that BTC's already pushed past this level, you want to add those two numbers ($19,000 and $31,000) to give us our next resistance at - you guessed it - $50,000.
Despite any negative media attention, I believe hitting $50,000 is very possible based on everything we've just discussed. Remember, even when the market was dropping in October, BTC finally decoupled itself as an asset of the markets and started trading as an asset of uncertainty - which is EXACTLY what it was created for in the first place. And while it's true that last week's charge to $36,000 could have been a false start, we've been pushing above $35,000 or the last week or so already.
We'll keep talking about this over the coming weeks and months. In the meantime, I would love to hear your thoughts. Leave a comment below and let me know what YOU think. Has the crypto breakout begun? What do you see as the future of crypto?
Talk soon,
Tom Gentile
America's #1 Pattern Trader
The post Bitcoin Jumped 30% in Just 10 Days - Here's What's Next appeared first on Power Profit Trades.
About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.