Bitcoin Trades Above $18k Intraday; Market Is About To Sink
Three months ago, on August 10, 2020, I wrote an article bringing your attention to GBTC, a bitcoin ETF. At the time, GBTC was establishing a base at $13. I said, "I think within a few months, GBTC will test that $20-$22 range. This could be a good hedge against the market." Since then, bitcoin has been climbing, and today it hit above $18,000 intraday, which brought GBTC above $20:
While GBTC has been shooting up higher, the overall market has been volatile and trading sideways. Even though major market indices made new highs a couple of days ago, the new highs were not by much, and they looked "stretched" (meaning it took a lot of effort just to get there), and the market closed in the red today, Wednesday:
Today's closing action really was not good. Take a look at the intraday actions in SPX:
The market immediately traded lower after open, but, residual buying drove it up again. However, there was a volume spike on the selling midday, and the selling strengthened in the last 45-30 minutes.
So, be very careful on Thursday and Friday. This market is extended. NVDA reported great earnings and gave a fabulous report, and yet, its stock fell in the after-hours. This gives us a warning signal on the overall market conditions.
Gold and silver may need some time to consolidate. Bitcoin can continue to go higher if it clears $18k; for GBTC, watch the resistance level between $20-22. So, I raised cash today. It may be time to gear up to play the downside. VIX spiked at the close today. Keep an eye on VIX and UVXY. UVXY has a resistance between $15-$16, above which things could get interesting.
Good night and HappyTrading! ™
Disclosure: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no ...
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