Bulls vote Bitcoin

Uncertainty reigns over the US 2020 Elections, but the markets performed exceptionally well. One thing must be noted, especially for our friends trading stocks. Stocks are going up because you are pricing them on USD terms. But as you price the major stock indexes in terms of bitcoin, the gap between year-to-date performance expands. Bitcoin remains the king.

Bitcoin +115% YTD

BTC up +115% YTD, Nasdaq 100 up +35% YTD, S&P is up +7% YTD, USD down -5% YTD

The king is up +115% YTD, let that sink… No words are needed, but for skeptics, bear in mind that as the spread between asset performance widens, the opportunity cost of buying stocks increases.

Bitcoin vs S&P 500

As you may know, the S&P 500 is used to get an overview of the stock market’s structure. It is probably the most used benchmark or reference point for equity investors. A 7 percent gain year-to-date is not bad, but it quickly evaporates if the USD falls.

The opportunity cost of holding stocks increases as the orange line becomes steeper

Notice how the value of the S&P 500 drops aggressively when priced in bitcoin. Since bitcoin’s supply is limited and investors crave more risk and resilience, thus the king can only go up.

Bitcoin vs Nasdaq 100

Now that we mention risk, it’s time to address what some call the burst of the tech bubble in September — October 2020. The sector that had been fueling the stock market came back to haunt equity investors.

The same story for the Nasdaq 100… BTC is above 15k and gravity is doing its thing

The Nasdaq 100 is out of the competition for the best 2020 performance and the opportunity cost of holding the index skyrockets as bitcoin breaks through multiple resistance levels.

So the only question remaining is: when is the right time to buy bitcoin?

Zoom Out

The most recent resistance at 14k was obliterated despite the US 2020 Election scrutiny. There might be a problem with the current vote count, but crypto investors are united.

Next big milestone: breaking above 20k

Bitcoin has shattered the most significant resistance levels, with only one left at 20k.

Zoom In

Higher volume and intense buying pressure drove bitcoin to price levels last seen in 2017 and 2018, before the all-time high. As FOMO lures more latecomers, the king’s on-balance volume is going to get stronger, signaling a solid base for price discovery.

Bullish flags are common in strong uptrends

Trading the long-term bull run it’s easy if you focus on entry points, so buy at any sight of weakness. For the eager, the important thing is keeping a tab on key price levels. For now, if bitcoin holds $15,227 expect a bullish flag and a break above 16k.

Remember everyday bitcoin gains, the opportunity cost of NOT holding rises.

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Cointer

I’m Cointer a crypto enthusiast who likes to kick off the week with a weekly bitcoin analysis.