Bitcoin It's been awhile since we had a good risk:reward trade in Bitcoin, but Friday's $4K gain has the look of the start of something new to the upside and although not perfect, the EW set-up is for a Wave 5 into at least the high $90's with corresponding gains in our Bitcoin option vehicle, BITO. Bitcoin (BTC) Intermediate Term Minimum expectation is the top of the channel, around $72K, with a breakout possible that sends Bitcoin knocking on the $90's. The previous trip to the top channel took place in March and BITO reached as high as $33. Risk: a close below $55K cancels the bullish case turning trend back to a boring neutral. BITO Although Wave 4 doesn't look right on this BITO chart (too deep) it does sport the right look on the Bitcoin chart which is the real chart triggering this trade. If Bitcoin just reaches top channel resistance in the low $70K's, BITO should be in the low $30's. BITO Dec 20th $20C Bitcoin: Grok Analysis Grok is Elon Musk's state of the art attempt at artificial intelligence. It is available free to all certified members of X. Does it have brains? Yes, albeit artificial. Initial testing shows its accuracy in predicting stock price about on par with other technical analysis tools, some of which I have been using for 40 years. Consider it in beta testing for now, but if it proves reliable, it will be a total game changer. Grok: What is the likely price range for Bitcoin going into January, 2025? Grok's Answer: Optimistic Predictions: Some of the more bullish predictions suggest Bitcoin could reach into the six figures, with figures like $125,000 to $155,000 being mentioned. These predictions often hinge on positive regulatory news, significant institutional adoption, or macroeconomic trends favoring Bitcoin as a hedge against inflation or currency devaluation. Moderate Predictions: A moderate scenario, considering both growth and potential market corrections, might place Bitcoin somewhere between $80,000 to $120,000. This range accounts for growth but also considers the volatile nature of cryptocurrency markets and potential regulatory hurdles or market corrections. Conservative Predictions: On the conservative side, if Bitcoin faces regulatory challenges, market corrections, or shifts in investor sentiment towards other assets, predictions might lean towards a lower range, potentially around $50,000 to $80,000. This could reflect a scenario where Bitcoin sees growth but not at the aggressive rates suggested by the most optimistic forecasts. Extremely Bullish Scenarios: There are also outliers suggesting much higher figures, like $475,000 or even $900,000, based on extreme market conditions or unforeseen widespread adoption and institutional investment. Given this spectrum: General Consensus Range: If we were to synthesize a "consensus" from these varied predictions, considering both the optimism around Bitcoin's halving cycle and the cautious approach due to market unpredictability, Bitcoin might be expected to trade in a range from approximately $70,000 to $150,000 by January 1, 2025. This range captures the middle ground between overly conservative and extremely optimistic forecasts, reflecting potential growth influenced by historical trends, upcoming halving, and increasing institutional interest, but also acknowledging the inherent volatility and external factors that could impact price. ----- BITO Option Trade Management (from Allan, not Grok) Based on a range of $70K to $150K, BITO, which closed Friday at $20.69, can be expected to trade somewhere between $30-65. With that as a framework, this is one of those option trades that has huge potential, especially in the "Best Returns" column over the course of the next 120 days. That suggests that the Dec 20th $20C being worth upwards of $10 (5X Friday's close) and possibly as high as $45 (22X Friday's close). On the other side of the ledger, anytime "Current Return" drops to -50%, and not too much lower, exit the trade and blame me for a bad call. Literally. The Big Picture With four weeks to go until Sep 20th expiration (less one holiday - Labor Day) time is running out on a slew of Sep 20th options. We already can assume an interest rate cut on Sep 18th, but that is all but baked into the market at this point. Longer-term calls in PLTR, TSLA and GDX should do well absent an unexpected exogenous event, which is possible anytime, but especially in a crash window which has been extended into November. Do not forget August 5th, and the fact that it started overnight in Japan. It was a global shot across the bow to financial markets and it was not a one-off event. Expect a repeat as our election draws near. Charts GLD Anyone else see a similarity to the Bitcoin chart first above? GDX TSLA PLTR QQQ The biggest disappointment of the summer has been the failure of any sort of downside follow-through to the volatility that started around mid-July and reached a crescendo on Aug 5th. Our play on this downside narrative was the QQQ Sep 20th $450P, which on Aug 5th was up 786% and which as of this weekend is now -46%. Coincidentally, or not, QQQ closed Friday at about the same level it was when we entered this trade, $480. At the time, this $450P was $30 out-of-the-money and at its peak value three weeks later, was $25 in-the-money. Take-away: This trade was entered on July 17th and three weeks later was up about 8X. There will be more gains like this and although it may not come from this particular trade, it will come from our particular methodology. Gains like that are not outliers, they have been coming every year this service has been in existence, like clockwork. Whatever the final numbers are on this trade, are are more "Best Returns" like this in our future...and the way this election season is shaping up, likely before the end of this year, Premium Servie Active Option Portfolio Pro Service Active Option Portfolio
