Transcription
Hey folks, welcome to verified investing.com. My name is Gareth Soloway, chief market strategist here.
Now, in today's video, we need to deep dive into the chart on Bitcoin to decipher: has it broken down? Where is it going to fall to if it has broken down? And ultimately, what is it? Is it a risk asset? Because markets are at all-time highs, at least with the stock market. And then, is it a digital gold? Well, gold is at all-time highs as well. Yet, Bitcoin is not. So, what the heck is it? We're going to decipher all of this plus the technicals in this institutional-level video. Let's get right into it.
All right, we're going to start out with the daily chart of Bitcoin. And what we can see here is Bitcoin bottomed out on November 21st, 2025, and ultimately has just chopped sideways. Now, we want to make sense out of this, right? So, what we do is we take a trend line and we connect it to some key lows. And what I'm doing here is notice you're taking it to this low and then this low. Basically, the lowest point you have since that level. And what you do is you extend that out. And what we could see very clearly is that we came down into this. We broke, consolidated, broke lower, and then look how Bitcoin today rallied up, hit this line right here, and then stalled out. All right, so again, that's number one. What this tells me is this is a significant level because it respected it on this side of the chart, right? And then it also is now respecting it on this side. So, first and foremost, if Bitcoin's going to catch a bid and actually make an attempt at $100,000 again, we need it to recapture this trend line, which currently sits just above $90,000, around $90,400 to be exact.
Next, what we want to do is we want to raise a parallel from that. Bring it up, up, up, and bring it to these highs. And notice how high one right here, high two, and high three. What this does is it gives us an upside potential. Meaning that if Bitcoin can break through this level and confirm back above, that would be your max upside that you would expect in the near term. Listen, long term, I continue to like Bitcoin. But we'll discuss more of that in just a little bit. But in the near term, if it were to recapture, this would be the likely scenario, right? Recapture here. It chops. It kind of goes and eventually finds its way up here. There, you'd expect it to get rejected. All right, so that's number two on my list.
Now, if we zoom out on the chart, we can see that there's a bigger issue here. All right, the bigger issue is what we would call a head and shoulders pattern, which is net bearish. And this has me a little bit concerned, right? So, what we have here is a shoulder, head, and another shoulder forming, right? Shoulder, head, and shoulder. And in technical analysis, head and shoulder patterns are bearish. They're bearish once they break the neckline. Now, the question you want to ask is, has Bitcoin broken the neckline? Let's find out because really that is when things start to unravel. And to find the neckline, what we do, and I'm going to leave this actually, you know what? We don't need that anymore. Let's take a trend line and drag it from this low to this low. See how this is the head, right? Right here. Right. So, here essentially this is your armpit or shoulder where your neck starts and goes up to your head to to your other kind of shoulder where your neck comes into it. That is what we call a neckline. And you extend this out here and that gives us our break point. Now, if that breaks, that's where really things start to get messy for Bitcoin to the downside. We'll discuss downside targets, but that again would be called the neckline of your head and shoulders. And this pattern, it might be bearish, but it doesn't really have an impact unless it breaks this line here at around $82,500. At that point, if it does break that, then you start to say, "Uhoh, here we go. Here comes the next flush." My guess is we would see a fast and furious kind of dump out, a liquidity type scenario where it flushes out. And your next key point, and this is where I would expect it to go, would be basically down to this zone here. In fact, let me draw this in where I want I want to give you guys a range on this, and I'll explain why. So essentially, what we'd be looking for is something in the range of $74,000 to about $67,000. Now, I'm getting this $67 to $69,000 base because that's our former bull market high. Now, the important thing here is, is if we look historically and we look at the 2017 high, we can see that when we finally bottomed out in the bare market of 2022 from the bull market highs of 2021, where did it go? It went right into that former all-time high from the previous cycle. And so that would really bring us into this range of $67,000 to $74,000. So that, for me at least, would be where I would start to consider uh buying into some Bitcoin, starting to accumulate a larger position on the long side with full awareness that there's always a chance Bitcoin can go lower. There's nothing that says this cycle has to be the same as last cycle's bare market, right? Nothing like that is set out there. Now, it gives us some guidance to maybe say, okay, this is an area to start accumulating, but you always want to air on the side of caution, right? Can it, does it actually go there? Or can it be maybe, maybe, maybe it goes lower, right? Maybe it even goes even lower than that. So, as you can see, I'm starting to formulate a plan here and that's what the charts are used for. I see my 2017 high. Here was your '21 bull market high. And here was your low of the cycle. So the thought process would be somewhere in this vicinity, we could make a case that that would be your your kind of your cycle low on Bitcoin.
Now, how do we get back to all-time highs? How on earth do we get back to all-time highs? Well, listen, essentially, and this brings me into something that's maybe not as much about the charts. It's more about human psychology. And this is what I'm struggling with right now. All right. So, I've argued for a long time that Bitcoin is a risk asset. Okay? I've said I believe it's going to evolve into the digital gold. But as of now, we've generally, in the history of Bitcoin, when the stock market sells, Bitcoin usually sells, right? But the problem we're facing right now is that the stock market continues to be at all-time highs and has even made new all-time highs on the S&P and the Dow. And Bitcoin is quite a bit off those all-time highs. So, is it a risk asset? I mean, maybe it's a leading indicator. And this is again, I I'm discussing this with you guys because I have trouble with this. I'm trying to figure this out and you guys feel free to kind of discuss it in the comments. I would love to hear your thought process on this. But you could say, okay, well, if it's not a risk asset, then is it a digital gold? Well, gold is at all-time highs. It's making a new all-time high today. It's at like $5,300, and Bitcoin's not at all-time highs either. So, what is it? What is it ultimately? Is it somewhere in between? Is it still trying to find itself? That's where I'm kind of leading leaning to where it's like, okay, well, you know, you could argue that the ETFs were a positive in the bull market period, but now they're a negative. Why? Because Bitcoin's underperforming. So, everyone holding the ETF in their stock portfolios dumping it to jump into AI chip plays, for instance, right? So, there could be some of that involved, but really, it needs to figure itself out. And I say this because my concern, and I I am a long-term bull on Bitcoin. As much as I play it long and short swing trading, I'm I'm a believer. I think when you look at the fiscal issues facing the world and the United States and the crazy amounts of debt and the printing of money and the Federal Reserves and all these these central banks, we come back to that fiat currency has a limited lifetime. It eventually gets printed to adnauseium, right, where it just disintegrates. And we've seen that in the US dollar. If you look at the dollar in the '20s versus how much value is $1 today, it's basically a penny. So, there's a need for Bitcoin, but it needs to start acting like it is that. And the question is, why isn't it? Why isn't it acting like a risk asset? Why isn't it acting like, ultimately, a digital gold?
And as always, folks, I leave that with you. But I do think it's important. Bitcoin needs to figure itself out sooner than later. I'd love to read the comments in there and let you guys discuss this and let me see some of the comments. As always, I can bring you the technicals, but when we get into this philosophical and kind of what is it, your comments are absolutely worthwhile. Thank you guys so much and I'll talk to you soon. Have a good one, guys. Take care.