With many popular stay-at-home stocks pulling back on heavy volume and Bitcoin testing $50,000, investors are wondering what’s in store for the world’s most popular cryptocurrency. While some traders have been—and still are—calling for a crash in Bitcoin, we see no reason to sell out just yet.
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Is This the Top?
After reaching a new all-time high of $58,300 over the weekend, Bitcoin is currently trading just under $49,000.
The downward move came on the heels of a warning by U.S. Treasury Secretary Janet Yellen that Bitcoin is an “extremely inefficient” way to conduct monetary transactions, and a tweet by Tesla CEO Elon Musk that the price seems high.
Bitcoin is still up more than 80% this year, and we’re long since $7,753 for a more than 580% gain in our I/O Fund, which is invested in the most important tech microtrends.
Currently we are monitoring the $53,000 to $56,000 region for Bitcoin, which the digital coin is trying to clear. This is an area we will likely begin to start taking small gains to reduce the percentage allocation of Bitcoin in our portfolio.
If Bitcoin can clear this level, the next level of interest is $70,000/$80,000, which will be the zone at which we will continue to monitor closey. If Bitcoin can clear this region, the next level up will be $100,000 to $108,000.
We believe that between $53,000 to $56,000, and the $70,000/$80,000 region, Bitcoin should make a local top. When stocks or crypto reach these levels, we re-assess to determine if we will buy more, hold or sell in our fund.
We’re Up 580% in Bitcoin! What’s Next?
Bitcoin is one of our largest holding at just under 8% of our I/O Fund.
In August 2019, when Bitcoin was trading at around $10,000—well below the 2017 high of nearly $20,000—Beth predicted that global unrest would help establish the digital currency as a safe haven for institutional and retail investors, pushing the market value to $1 trillion.
At the time, it was a contrarian call. But Beth’s analysis proved correct when Bitcoin’s total market value surpassed $1 trillion on Feb. 19.
We purchased Bitcoin in mid-March at around $7,750 and sent an alert to our premium subscribers. We alerted premium subscribers for additional entries at around $10,000, $11,000, $12,000, $20,000, and $49,000.
Our deep experience in technical analysis, as well as Beth’s conviction in her fundamental analysis that institutional investors, economic uncertainty, and mobile payments would push the price higher gave us the confidence to average up in Bitcoin as the trend continued along our projected path.
When Bitcoin was breaking out around $7,000 earlier this year, it was insane to predict Bitcoin would reach over $50,000. But that is what the technicals were suggesting at the time and this is what we published for our premium readers.
Is Bitcoin Due for a Pullback?
Remember when analysts and investors called for a top in Bitcoin at around $32,500? Instead of a top, we predicted a relatively mild pullback. We monitored $28,000 for a shallow pullback and $22,000 for a deeper pullback.
Over the long term, we believe there are a lot more gains to be made in Bitcoin.
In the short to intermediate timeframe we are due for a pullback, which we will view as a buying opportunity and alert premium subscribers. Until we see clear divergences at key technical levels, we plan to hold. However, once we start seeing signs of weakness at key levels, we often take gains and notify our subscribers.
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