Here’s the ultimate leverage on bitcoin. Check out $MSTR and Mystic! – November 18, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I want to look at a few charts today. In my mind, these are the most relevant ones for me to be looking at, they relate to Bitcoin here.
I want to talk about how these other stocks relate to Bitcoin. As you know, or as you should know, this is under a lot of buying pressure. I don’t think there’s going to be much time at all before this continues its march up to 100,000. It’s a good healthy thing that it’s resting here, right around 90. But if you remember how long it rested at 80, that was a real hoot. It blasted through there like one of Musk’s rocket ships and it just continued to go.
This thing is on a tear here, but that’s not what I want to talk about. I just want to point out this, that today’s advance just wasn’t that much. You can see on the upper left part of the screen, up in this area here, you’ll see that it moved up less than a percent today. Right now it’s up ¾ of a percent. That’s Bitcoin. It’s awesome to be invested in Bitcoin. I always wish I had more but I’m happy that I’ve got what I’ve got.
This is the point, this is up ¾ of a percent. If you’re trading Bitcoin, or you would like to trade Bitcoin but you don’t have a Crypto account, that’s fine, you can do it another way. In fact, I would say it’s a better way. Remember, Bitcoin went up less than 1 percent. Today MicroStrategy ( NASDAQ: MSTR ) went up almost 13 percent. This obviously doesn’t trade on par with Bitcoin, it’s more leveraged and that’s really the key point here.
The idea is, that Michael Saylor continues to buy more Bitcoin by issuing convertible bonds on MicroStrategy ( NASDAQ: MSTR ). When he issues convertible bonds, he gets the dough, and that dough goes into Bitcoin. And the more Bitcoin he buys, as long as the price keeps going up, the more MicroStrategy ( NASDAQ: MSTR ) goes up. It’s kind of an elegant deal here. A lot of people say, Oh well, it’s a Ponzi scheme. It’s this, it’s that, you think that you’re going to make a lot of money. You don’t know what you’re talking about.
I hear that as I’m looking at the chart here in January of 2023, at $15.00 and now it’s at 384.00. I’m waiting for somebody to tell me when I’m going to stop making money on Bitcoin and Bitcoin trades. That’s the difference between knowledge and wisdom. These guys can know a lot of stuff, maybe they’ve got degrees all over their walls. That’s intelligence, but as far as wisdom, you’ve got to take things as they come. If there is a money-making opportunity, and there is, then I’m going to take it.
Again, Bitcoin is running up ¾ of a percent today. In the same time frame, MicroStrategy ( NASDAQ: MSTR ) is up 13 percent. Now, I’m going to take you to another chart that gets even better, but not yet. I want to show you this. A few days ago I was talking to my members about this thing, I call it a fishhook. It’s a Bollinger Band hook and this is how it works, when a stock is really, really screaming, really running high to where the Bollinger Bands themselves are really expanding. You can see how when the stock really picks up, it runs away from the 20-day, in this case, the 20-day moving average.
Then because Bollinger Bands are two standard deviations above and below the 20-day moving average, then as this starts to ramp these bands have to continue to go away from the 20-day moving average, so you get this big fan. It looks like a tuba, a big megaphone, whatever you want to call it. But then, at some point, the trend will pause a bit, and that’s when you’ll get a little hook on the opposite side. The price goes up and then at some point it comes down a little bit, and then this hook forms.
Some have interpreted that as indicating that it’s an end to the trend. But that’s really not the case. It typically just reflects a pause in the trend. When you see this little hook, then the takeaway is, okay it’s probably going to rest for at least a couple of days. Who knows, maybe it’s going to reverse and go to zero, but that’s not what I’m talking about. I’m talking about using this little tiny technical indicator, this little hook to gauge when a strongly running stock has taken a breather.
But then, this is where it gets good, here, the stock took a breather for three days. Right here, last Wednesday, last Thursday, and last Friday traded in a fairly tight range right here. And now we’ve got this fishhook completing its course. Now, as this starts to run again you’re going to see this Bollinger Band, the lower one, start to run down again. And we’ll continue to get, I’ll call it, the business end of a tuba where this is really, really running.
The point is, if I had to choose, and happily I don’t I can take both, if I had to choose between Bitcoin and owning MicroStrategy ( NASDAQ: MSTR ), today I would take MicroStrategy ( NASDAQ: MSTR ) because it’s up 13 percent. Again, versus Bitcoin’s .75 of 1 percent. I’ll bring you back to here on the daily chart. They do trade pretty similarly.
But this is how I trade it, I trade it with MSTX ( NASDAQ: MSTX ). This is a double MicroStrategy ( NASDAQ: MSTR ). So let me get this straight, we’ve got Bitcoin, which is working really well. And then we have MicroStrategy ( NASDAQ: MSTR ), which is a leveraged Bitcoin play. They continue to accumulate Bitcoin so their value continues to increase beyond what the price of Bitcoin is increasing because they’re actually buying more and more of it.
You could say if a dollar winds up being valued at a dollar five, then great, you made a nickel. But if you’ve got a whole boatload of dollars, and that dollar goes up from a dollar to a dollar five, you’ve made more than just a nickel. That’s what’s happening here with MicroStrategy ( NASDAQ: MSTR ). As Bitcoin goes up a little, MicroStrategy ( NASDAQ: MSTR ) goes up a lot.
As MicroStrategy ( NASDAQ: MSTR ) goes up a lot, MSTX ( NASDAQ: MSTX ) goes up a hell of a lot, it’s up 25.6 percent right now. Even in the after-hours, let’s see what it’s doing here, it’s just trading sideways. So it’s holding all of these gains that it made during the day. So this would be my suggestion, if you’re going to be trading Bitcoin, if you want to own Bitcoin that’s great. Get on Coinbase ( NASDAQ: COIN ) or some Crypto account.
But if you don’t have that, don’t just be sitting here like a mope talking about how Bitcoin is a fraud and this and that. I don’t really care, I just look at charts. And when I see a chart of Bitcoin and then I see a chart of MicroStrategy ( NASDAQ: MSTR ), and then I see a chart of MSTX ( NASDAQ: MSTX ) here, this I get, this I understand.
And so my suggestion would be, don’t sit around, look at these prior prices, and say, I think this has gone up too much. It hasn’t, just look at the price, just look at what’s happening here. If you look at the hourly chart you can see a nice move today, this last week, and then now it’s just kind of drifting around sideways. The same thing on the 30-minute chart. So this is a pattern that we’ve got. If it’s me, I really can’t buy anymore unless I go on margin, maybe I will. If it’s me, I’m buying more when it crosses right up there.
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