Bitcoin has been on everyone's radar recently, especially with all the news of the SEC approval of Bitcoin ETFs. While some may believe Bitcoin is extended, I am of the view that this is merely the beginning of a much larger move. In this blog post, I will lay out my thesis why I believe the move in Bitcoin has "only just begun."
Bitcoin is already up over 40% since early February. However, when we look at a weekly chart, we can see it is still in a base-building phase and has not made an all-time high yet. Just like a stock, new-all time highs after large corrections are usually when all the fun begins. Why is that? It's simple. When a stock or cryptocurrency is at an all-time high, everyone is happy and thus less likely to sell.
A Bitcoin monthly chart is a fantastic tool to get a view of what is taking place from a long-term perspective. From this higher-time frame, it is easier to analyze how Bitcoin has done in the past. Notice that in prior cycles all the momentum began after Bitcoin made a new-all time high. If this scenario plays out again, 2024 will indeed turn out to be the year of Bitcoin.
It's also interesting to look at the charts of some of the Bitcoin ETFs. IBIT and BITB have seen insane accumulation recently. That's not your "Aunt Suzy" buying, as the great William O'Neil would say. It is funds and institutions coming in to purchase Bitcoin.
Finally, from an anecdotal and sentiment perspective, I'd say we are in the interest phase of the sentiment cycle. We certainly are not in panic or capitulation, and we definitely have not hit euphoria yet. A case can be made for greed, but with Bitcoin still below it's all-time high, it is extremely unlikely that we've already hit euphoria like we did in the first half of 2021.
Here's to Bitcoin in 2024! I have a feeling we've only just begun.
Risk right. Sit tight.
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Full Disclosure: I currently own Bitcoin.
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