Summary Bitcoin's recent surge is extraordinary, nearing $100k, and technical indicators suggest we are at the beginning of a bullish cycle, not the end. Short-term support is at the 20-day EMA around $90k, while long-term support is at the 20-week EMA, currently $70k and rising. Fundamental factors, including bullish sentiment around the US presidential election and significant buying from HODLers, are driving demand higher against limited supply. Despite new highs, Bitcoin remains a strong buy, with potential to reach $150k-$200k by 2025, making current prices look like a bargain. The run we’ve seen in Bitcoin ( BTC-USD ) has been quite extraordinary. The OG alt-coin broke out after the presidential election in the US and hasn’t looked back, now exploding higher to make new all-time price highs. This weekend, the price is inches away from $100k, which seems inevitable at this point. However you feel about presidential election, it’s a potential factor for the bulls going forward. In addition, while Bitcoin looks expensive given the sharpness of the move we’ve seen, I actually think we’re much closer to the beginning of this move than the end. As a result, I remain extremely bullish on Bitcoin. Let’s dig in. Technicals support higher prices Given Bitcoin isn’t a business (ie: it doesn’t have revenue/earnings/book value), for me the primary way to look at prospects is via the technicals. Anyone that’s read my work knows I like this approach anyway, but it’s especially important for assets like Bitcoin, gold, or anything else where “value” is in the eye of the beholder. With that in mind, let’s start with the daily chart. StockCharts We can see the explosion higher that has happened in the past couple of weeks and it has indeed extended the momentum indicators. There’s nothing more bullish than a price breakout that’s followed by huge buying, which is exactly what we have here. I have the PPO, accumulation/distribution line, and the Chaikin Money Flow indicator in the bottom three panels, and all three look tremendously bullish. Is it overbought? Yep, it definitely is, but I also don’t think this is a bad thing. Below, I’ll show why I think this is a good thing. For now in the short-term, I’d look for support on pullbacks at the 20-day exponential moving average, currently just under $90k. If we get anywhere near that level, it’s a strong entry point. Let’s go longer-term now and look at a weekly chart that goes back to 2020. We can see the breakout to new highs that cleared (quite easily) the highs from 2021 and just kept going. StockCharts For anyone that thinks Bitcoin is overextended, I’d invite you to look at the PPO on the weekly chart. We had a “reset” to the centerline just before this most recent move higher, and it’s nowhere close to being overbought. The CMF is showing strong bullishness as well, so on the weekly chart, all looks well to me. On the worst pullback I can think of going forward, look for support at the 20-week EMA, which is currently $70k but rising quite quickly. I’d be surprised anytime soon to see something close to that value, but as we get into 2025 and that 20-week EMA rises sharply, it could come into play. So, if I’m right and the OG isn’t overbought, what kind of move could we be looking at? Prior bull cycles are quite instructive, so let’s take a look. StockCharts This is the same price chart as above but with different indicators at the bottom. Let’s start with the 52-week rate of change in the middle panel, which just shows how much Bitcoin has moved over the prior 52 weeks. Right now, that number is 161%. That’s a lot, but during prior cycles, we’ve seen much more than that. I’m not suggesting we’ll see a 52-week ROC of 1,000% again, but my point is we can easily see much more than 161%. More importantly, the 14-week RSI has been quite good at calling the start of bull runs. Since 2020, we’ve seen the 14-week RSI go above 70 three times: late-2020, late-2023, and right now. In the 2020 version, it portended a further 400% gain. In 2023, it was just in front of a further 111%. Will this time be different? I doubt it, and it means that I’d be very surprised if this move doesn’t end with Bitcoin going to at least $150k, but probably more than that. Unless something changes materially with Bitcoin (a negative news item or something like that), I’m looking at something from $150k to $200k before we get another big move down. There are a lot of variables between now and then, but I have little doubt we’re much closer to the beginning of this bull cycle than the end based on the above. Fundamental positives On a fundamental basis, part of the reason Bitcoin is rallying right now is because there’s bullishness around the US presidential election, with speculation around a US strategic Bitcoin reserve , more lax regulation, potential investment in mining, etc. Point being, investors are putting their money where their proverbial mouth is on the idea that the president-elect is going to help drive demand for Bitcoin higher, whatever the method. We’ll see if that actually comes to fruition, but if you’re a Bitcoin bull, this is likely music to your ears. More tangibly, the frenzied buying from the likes of Bitcoin HODLers like MicroStrategy ( MSTR ) and Marathon Digital ( MARA ) is soaking up enormous amounts of supply in Bitcoin. What happens when there’s more demand for an asset than supply? I think you know the answer to that. Let’s look at how many Bitcoin are mined per day to get an idea of how many Bitcoin are entering the fray each day. Below, we have blocks mined per day, and given there are 6.25 coins per block, we take the value of ~150, and 6.25X that is about 937 Bitcoin per day. It changes slightly each day, but as a guide we can use that figure. Bitbo If we take this figure and annualize it, we’re at ~342k coins. MSTR alone owns a full year of supply right now, and just since the end of October, has raised enough money to buy another 60k or 70k coins (or ~two months of supply), depending upon purchase price. Other smaller players like Marathon are buying coins as quickly as they can now as well, seeing the success MSTR has achieved. Point being, the rate of purchase of just HODLers like MSTR is soaking up a bunch of supply of Bitcoin, we have others like miners holding their coins – rather than selling them to fund operations – and you have a recipe where there’s very little supply hitting the market, but lots of demand from buyers. There is perhaps nothing more important than this in my mind as this kind of strategy from big corporate buyers means the demand of Bitcoin has at least semi-permanently shifted higher against relative supply. A strong buy, even at new highs While chasing new highs in any asset can be counterintuitive, I think that’s actually the right move here. Whether we get a move back towards $90k or not, as we get further into 2025, it is my view that $98k is going to look like a bargain. We’ll see, but I see nothing but support for higher prices as we look over the medium term, although there is likely to be chopping short-term, as there often is. Bitcoin is a strong buy.
