Summary Bitcoin has been in a frustrating sideways trend, stalling at above $60,000, but a breakout to $100,000+ is the dream. MicroStrategy, the original proxy for Bitcoin, has shown an outperformance to physical Bitcoin. The stock maybe serving as a leading indicator for the crypto's next big move. A Trump victory could be the push Bitcoin needs for the longed-for run to above $100,000. Bitcoin (BTC-USD) has been trapped in a slightly bearish sideways trend for a long time now. Here is the long-term chart. ADVFN This sideways action has been frustrating for Bitcoin believers because the move to around the $60,000 level, which was meant to be the stepping stone to $100,000+, has stalled. Instead, we are at an equilibrium point and the price is thrashing around in a range. Here is a chart of that. ADVFN It looks good and it seems possible that Bitcoin can break out now and head on its longed-for run to above $100,000. It just needs one more heave and that might come from a Trump victory. Trump has made lots of super positive crypto noises – and has even launched his own cryptocurrency project and token, World Liberty Financial (WLFI). Meanwhile, the Democrats have u-turned and started purring about digital currency, but it’s probably too little too late. As such, a Republican win for the presidency can do nothing but good for Bitcoin. The strange thing is, what Bitcoin holders are looking for is a chart that looks like this. ADVFN This is MicroStrategy (MSTR), the stock that’s a huge bag of crypto and has been a proxy for Bitcoin and took the role of Bitcoin ETF until there were actual Bitcoin ETFs. So, what is going on here? The official explanation is that MicroStrategy will be the Bitcoin Bank. OK, that sounds cool. However, it’s not exactly comforting when you look at what happened to Silvergate and others at the hands of the regulators, and that tendency is almost certain to continue under another Democrat presidency. Maybe the narrative of being a Bitcoin Bank is enough to decouple the company from the Bitcoin price trend, but what if that isn’t what is going on here? US investors do love a story of trillions and zillions, so maybe MicroStrategy’s ‘Bitcoin Bank’ story is sufficient, but to me, that explanation is not enough. What I am left wondering is this: If I was almost sure I knew Bitcoin was going up, what would I buy, especially if I didn’t want to push the price of Bitcoin just yet? The answer is, I would buy MicroStrategy. You can come up with plenty of scenarios, but the key takeaway is, will Bitcoin follow MicroStrategy, rather than the other way around? Is MicroStrategy driving Bitcoin now rather than vice versa? Here is the chart of BTC and MicroStrategy. ADVFN Clearly, MicroStrategy has more ‘pop’ than Bitcoin, so perhaps MicroStrategy’s stock feels the rally coming before the Bitcoin market does. It is an intriguing thought. Like any potential signal, it can be used in many ways. For me, it will simply be another reference point if Bitcoin breaks into new ATHs and will help me time a top, which will likely be wild if it goes on such a run. It also gives me pause to wonder, is the current run-up to the trend ceiling going to turn into the defining breakout? Is this move predicting a Trump win? One thing is for sure, this is a moment that traders should be watching Bitcoin closely because if MicroStrategy is a leading indicator then Bitcoin is about to breakout and breakout big.
