GBTC went flat at Wednesday's close. Accordingly we are officially on the sidelines until either GBTC or bitcoin trigger's a long signal. We are now tracking both GBTC and bitcoin itself into separate trading models and will enter back into GBTC if either (and hopefully both) break above their trend-signal lines.
The bitcoin hype from the 4th quarter of last year should have been a loud warning of an impending top in the sector. Our trend-signal line did kick in and got us out of the mania soon enough, on December 20th, just days after the absolute high in bitcoin at 19786.
A fresh GBTC long was entered on Feb 14th at $15.55 and stopped out yesterday at $15.25, for a net loss of $0.30, or 2%. Considering the size of gains that are possible in this arena, the trade was certainly worth the risk.
In the chart above, GBTC may be finishing off a Wave 5 Sell Signal which once it has played out (new low) could spark a new intermediate term uptrend, likely catching everyone by surprise off of the lows. We will get back in as soon as the trend-signal line is broken to the upside.
Note: We are now using 180 minute charts to enter/exit Special Situations, including GBTC and bitcoin. Also, keep an eye on low-priced, speculative MGTI, John McAffe's bitcoin mining operation in Washington State. Based upon the the price carnage that decimated bitcoin these past three months MGTI has been almost completely abandoned by the crypto-maniacs. If and when bitcoin begins to run, this stock will easily double within days. Patience.
Next Update: Saturday, with an update on the markets and the pending resumption of downside volatility.