Summary As predicted, MicroStrategy's breakout did foreshadow Bitcoin's surge. If MSTR is a leading indicator for BTC, its early peak suggests that Bitcoin's own top may be imminent. I project Bitcoin’s executable high to be around $120,000 for this cycle. Spikes well above this level are likely but may be too short-lived to trade effectively. This final move could have crypto across the board going wild. In October, I wrote an article here saying that MicroStrategy ( MSTR) had broken out upwards, and this was heavily indicative of a coming breakout for Bitcoin. This was the last sentence: “One thing is for sure, this is a moment that traders should be watching Bitcoin closely because if MicroStrategy is a leading indicator then Bitcoin is about to break out and break out big.” That was at $65000, and I hope this was useful for my readers. This was the chart then. MicroStrategy (ADVFN) And to me, it was what Bitcoin holders were looking for in BTC, which, at that time, was going inscrutably nowhere. Bitcoin price chart (ADVFN) So, it turned out that the idea MicroStrategy was a leading indicator panned out. At the peak, the company’s value was at a giant premium to its Bitcoin assets. Subsequently, this is what happened. MicroStrategy and Bitcoin price charts compared (ADVFN) But that is not scaled; when scaled it is remarkably different. MicroStrategy versus Bitcoin (ADVFN) ‘Whooh’ is the correct reaction. Here is another chart to give further context. ADVFN This really is ‘not normal.’ So, for me, if MicroStrategy is a leading indicator, the early peak is intriguing. Had Bitcoin peaked first in MicroStrategy with the physical lagging behind? Is MicroStrategy tipping us off for an imminent top? I project Bitcoin, as I have now for a very long time indeed, to hit the $120,000 area as a terminal target peak for this cycle. Such a top can hit even more elevated levels; it is likely to pop and drop all over the place and make all-time highs that are much higher than the tradable range as they last for short hours or even minutes. However, the executable high I have suggested is in the $120k zone but, of course, that is not fate. Here is a doodle. ADVFN It is just a roadmap but if MicroStrategy is a leading indicator we should be watching its price – and not Bitcoin’s - like a hawk. This final move will have all sorts of crypto going wild. For those playing the second liners or the crazies, it is Bitcoin’s transit that will determine the ‘buy, hold or sell’ call, and it seems highly likely it is MicroStrategy’s stock price that will signal the turn for Bitcoin when it comes. While even I can project the monstrous levels the Bitcoin Maxis are calling for in my charts, I still believe that the upside of this Bitcoin cycle is percentages rather than multiples but, in any event, we will need all the signals we can get to keep the profits of this ‘crypto summer’ because the past shows us that the turns in crypto are brutal. I can’t help but expect that the Trump inauguration will be the end of this run. It is perhaps a prediction too far, but buy on rumour sell on fact remains an investment classic.
