Bitcoin crosses above 200D, invoking Rule #3 --> Buy Bitcoin above its 200D

STRATEGY: Rule #3 kicking in –> Buy Bitcoin –> $100K into YE

Bitcoin crosses above its 200D…
Bitcoin today crossed above its 200D moving average ($44,938), invoking Bitcoin Rule #3 –> Buy Bitcoin BTC above its 200D moving average

– Bitcoin fell below its 200D on May 18th, 2021
– Recall, we “stepped aside” on Bitcoin at that date
– Bitcoin has since been range-traded between $30k-$40k

With Bitcoin crossing above its 200D, we think Bitcoin will rally strongly into YE.  This is consistent with our view that “everything rallies” into YE.

Bitcoin crosses above 200D, invoking Rule #3 --> Buy Bitcoin above its 200D


RECAP: 5 rules of Bitcoin
Our 5 rules of Bitcoin are below.  The most known is #5, the “10 best days”, or the rationale to HODL Bitcoin.  But Rule #3 is a biggie.

Bitcoin crosses above 200D, invoking Rule #3 --> Buy Bitcoin above its 200D


As shown below, Bitcoin’s forward performance is far stronger when it is trading above its 200D moving average:


>200D, 6M forward return    +193%
<200D, 6M forward return       +10%

You get the picture, Bitcoin is a network effect/network value asset, and also apparently aided by price momentum.

Bitcoin crosses above 200D, invoking Rule #3 --> Buy Bitcoin above its 200D


STRATEGY: Buy Bitcoin or Buy Crypto equities
The associated action for Rule #3 is simple.

– go long


Why is this happening?
This is not clear.  But Bitcoin is facing a legislative and regulatory assault from China and the USA, and yet, Bitcoin is rallying.  This is a key insight.  

– Bad news is apparently baked in
– Last seller has sold


What is a way to gain exposure to Bitcoin rally?
Digital assets should broadly rally.  Thus:

BTC ETH + tokens/projects <– digital assets
BITW GBTC -0.63%  <– ETNs tied to Bitcoin


Crypto equities:
                                          Est Beta to BTC
– Silvergate        SI            5X – 10X
– Mogo                MOGO -4.43%     2X – 3X
– Coinbase        COIN -1.05%        2X – 3X
– Voyager            VYGVF    2X – 3X
– Riot Blockchain RIOT -3.85%     2X – 3X
– Microstrategy  MSTR 1.40%       1X
– Paypal               PYPL -0.05%         0.5X
– Square              SQ              0.5X

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