Bitcoin $100,000? Let’s Talk About It
Brought to You By Scott Redler's Power Plays – Get My #1 Idea Every Week.
The Bitcoin Boom has been the biggest story in the market.
It's been a major focus in the Power Plays newsletter since September 26, when I added IBIT as a position. I later added Microstrategy (MSTR) and Terawulf (WULF) as Power Plays ideas, both of which were good to us.
On October 4, when Bitcoin was around $62,000 I told my Power Plays subscribers Bitcoin could hit $85,000 or higher.
And on October 11, I started talking about “The Bitcoin Turkey Trot” — a huge rally into Thanksgiving.
Well… we got it!
On October 14, in a free blog post anyone could read, I said Bitcoin could hit $100,000+.
And today, it hit a high of $99,543.
This move came way faster than I expected — not that I'm complaining.
So, what now?
Well, I still see potential for Bitcoin to hit $100,000 to $150,000 over the next 6 months.
Adoption by institutional money managers is just beginning, and of course, it helps to have friends in the White House.
There are also some simple technical analysis lessons to learn here.
First, you want to ride strong trends above the 8 & 21 day moving averages:
Note: Power Plays is down to a 25% position in IBIT – that's the only crypto name in Power Plays right now.
Since we're on the topic of technicals, let's talk about another big crypto story – the Microstrategy (MSTR) meltdown.
Yes, I love when stocks, ETFs, and cryptos are trending over the 8 & 21 day moving averages.
But when things get extreme, you want to hit the brakes.
Like with Microstrategy yesterday. When you see a stock trading 25% above the 8 day moving average, things are getting out of control!
I wanted to get short Microstrategy stock because it felt like Super Micro (SMCI) back in March.
Bu there was a problem — like most crypto-related stocks, Microstrategy is heavily shorted:
If Bitcoin had exploded to $105,000 to $110,000 yesterday (not an unrealistic scenario), Microstrategy could have squeezed up to $700 or $800.
So I took a different route than shorting MSTR itself.
I bought the Defiance Daily Target 2X Short MSTR ETF (SMST) in the premarket. This is a double short ETF on MSTR. So if MSTR falls 5%, this is targeted to rise 10%.
And I traded around it into strength.
I wanted to treat SMST like an option. So if MSTR kept rallying, I could lose 50% on the trade. But at least I knew what I was risking.
So to wrap up this lesson, remember 2 things:
- Ride trends over the 8/21 day moving average – do not fight them
- When a stock gets overextended over the 8 day, be very careful
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*Scott Redler Positions Disclosure as of 2024-11-22 at 11.35.38 AM
