Score 7.9 (out of 10): Bitcoin sets up for +20.8% rally in 1 month

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What’s Going On Here?

Bitcoin could benefit from futures short covering as perpetual funding rates are still trading at a small discount. Together with rising open interest, this could indicate that traders have kept shorting, despite the recent rebound. Now, higher prices might force them to throw in the (bearish) towel.

Why Now?

Bitcoin has reached a new shorter-term high. Previously, during similar occasions, Bitcoin shares had a median return of +20.8%, over the following 1 month – based on 10 historical occasions with 8 of those showing positive returns (80% hit ratio). This buy signal for Bitcoin received a high score of 7.9 (out of 10). This insight was generated on 2022-February-8 with last price of 44,305.

What’s This Company About?

Bitcoin is a cryptocurrency. Based on the last 2 years’ risk/return profile, this asset is seen as Less Risky. Ticker symbol: GBTC or BTC.

What’s My Risk / Reward and Time Horizon?

We found 1 month to be the optimal trade horizon, after testing a number of possible alternatives (accuracy of previous returns). Otherwise consider closing out this trade once the target level of 53,516 (+20.8%) has been reached. Based on Bitcoin’s recent up and down swings, LongShortBets suggests considering to set a stop loss level for this insight at 40,000 (last price at 44,305), which is equivalent to a -10% decline.

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ shown under (2), etc. 

Previous episodes:

19.3% (October-2021), 31.1% (July-2021), 25.1% (February-2021), 38.2% (October-2020), 21.7% (July-2020), 19.9% (April-2020), 23.7% (January-2020), -16.7% (October-2019), -13.6% (August-2019), 4.4% (February-2019).

Historical Chart:

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Summary:

NameBitcoin
ViewUp
Star (1 to 10)7.9
Target+20.8%
Time1 month
Hit Rate80%

Popular Insights:

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