Short-Term Price Action in Bitcoin’s ETF (GBTC). . .
You know I had to write about it at some point, Bitcoin’s controversial exchange-traded fund, the GBTC.
The technicals are favoring an upward motion in the price.
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I’d recommend the coin over the ETF, but for those not familiar with the ins-and-outs of trading cryptocurrency on its exchanges, BTC’s ETF might not be a bad way to gain exposure to crypto’s premier coin through the regular ol’ stock market.
With the nuances of cryptocurrency trading aside, the Bitcoin Investment Trust is printing some interesting action especially visible on the 4-hour chart.
The first notable feature of the chart is price compressing into a tighter range. This is making itself apparent with a symmetrical triangle tracing out beginning with a significant bottom reached in early February. Bitcoin’s price still has some room to fall and still stay inside the triangle’s bounds, but GBTC has support right where price fell and rose on 5/11, so Bitcoin’s price may not fall enough to reach the bottom of the triangle.
In addition to a price bounce off support a few bars ago, an inverse head-and-shoulders pattern is tracing itself out – suggesting higher prices in the near future. However, the triangle’s upper boundary crosses through the projected completion of the upside-down head-and-shoulders pattern, suggesting resistance. The expected rise in price with the traced-out head-and-shoulders would put GBTC’s price above the triangle, which would in turn function as support rather than resistance in the near-term.
A volume feature also comes into play here. Light volume can accompany changes in the direction of price with subsequent major moves in the new direction. Light volume can suggest a top with the evaporation of buyers – or (as in this case) suggest a bottom with fewer sellers to push the price to new lows. GBTC’s volume has been relatively light since early March. This may signify price is ready to rise with the absence of sellers suppressing Bitcoin’s price.
If you can’t trade the coin itself, the Bitcoin Investment Trust can provide exposure to Bitcoin’s price moves in the over-the-counter stock market. Familiar patterns printing out on the shorter-term hour-level charts suggest Bitcoin (and its ETF) are ready to make a significant move higher.
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