To me, this chart looks like a textbook “Stage 2 Breakout”, as popularized by an old, somewhat obscure, but in my experience excellent trading book by Stan Weinstein called “Secrets For Profiting in Bull and Bear https://bombthrower.com/wp-content/uploads/2019/03/shutterstock_1030471843-e1551983495127-1.jpgets”.
The title and the cover look cheesy, but it really holds up well. If you’re familiar with Mike Swanson from Wall Street Window, he’s based a large part of his methodology on this approach for the near 20 years I’ve been following him.
The Weinstein methodology, in a nutshell is this:
There are four phases in any financial instruments cycle:
That’s it. It applies to stocks, it applies to markets, it applies to sectors. You have to figure out what phase whatever you’re looking at is in, and if you’re right, then you know what to do.
For example, the major indices have been stage 3 “topping” for a couple years now, and have finally entered a Stage 4 “falling” or bear market. That’s why I’m not chasing this current rally in the wider markets.
Gold, and precious metals, on the other hand, have been in a stage 2 bull market for a couple years now, and hardly anybody notices. Or cares. (This may be changing as we speak).
Back to Bitcoin. I think Bitcoin is still somewhere, possibly near the end of the Stage 1 “basing” phase that came after the last bear market (2018-2019), and the next phase is Stage 2: bull.
With all this in mind, I re-entered HUT 8 last week. That’s my disclosure that I have a position in HUT, and the other one is this: I have previously lost money trying to go long this stock. So as QTR Podcast guy often says “Don’t listen to me, I don’t know anything”.
Still, my preferred method for accumulating crypto-currencies always was and remains to earn it. Take them as a payment option from your business and sit on them until the next superspike. If you don’t know where to start for that, take a look at MyBTCServer which is an open source project that makes it easy to setup your own crypto payment server.
If that’s outside your wheelhouse, fear not, over at easyDNS we’re going to be rolling out a managed service to deploy MyBTCServer under your own domain later this summer. If you’re interested, jump on the invite list here.