In a week when stocks have pulled back 5.5% and headline writers are using words like “plummet” and “plunge,” you may not have heard the more important news.
That’s not to say market pullbacks aren’t important. They are, and folks obviously remember the rapid descent into a bear market in February and March.
If you’re interested in my view on the market, click here to view a special video update I recorded just a little bit ago.
But the even bigger news that’s getting overshadowed by the gloom-and-doomers has nothing to do with stocks.
The oldest and most important cryptocurrency has surged more than 20% in the last three weeks and broken out to its highest level in more than two years.
We’ve been expecting it. We’ve prepared for it. And I think it’s just the beginning …
To fully understand the significance of bitcoin’s breakout, we need to look at both the chart and some of the latest developments that show how important cryptocurrencies are becoming in our world.
You know me as a hypergrowth trend investor, and that’s 100% accurate. But I also learned technical analysis early in my career and incorporate that into my research as well. And let me tell you, I love the action in bitcoin right now.
First, let me show you bitcoin’s three-year price chart. You can see how it has jumped above $13,500 to prices not seen since January 2018 when it was on its way down after all-time highs above $20,000 the month before.
The chart shows a classic bullish consolidation pattern. Think of these like coils or springs that wind tighter and tighter. When they’re released, a lot of built-up tension can cause the price to explode.
You can see this play out in the chart below. Bitcoin popped above $10,000 in late July and held there. In fact, it went on to set a record for consecutive days above $10,000. As it held, it consolidated, trading mostly sideways for the next two to three months. And as it traded sideways, the range and trendlines (in green) narrowed.
As the consolidation range narrows, the asset must ultimately break out of the trendlines one way or the other. Breakouts typically occur in the direction of the prior trend. For bitcoin, that was its move over $10,000 … and it indeed surged quickly above $13,500.
Like I said, breakouts often mirror what came before them. The last move was bitcoin’s several thousand-point move in late July. A similar run would put it in the upper teens and closing in on its all-time high.
And that brings me to the growing awareness and use of bitcoin and altcoins.
This is more than a technical breakout. People everywhere are waking up to the fact that cryptocurrencies are one of the most valuable technologies ever created. As this continues, there will be an enormous rush into bitcoins and altcoins.
I think we’re seeing the early signs of the next big tech awakening, just as we did with the internet, personal computers, smartphones, the…