(Kitco Commentary) - Bitcoin slipped below $75,000 even as tech stocks bounced, and its higher-timeframe momentum just turned red. Meanwhile, my gold and silver longs keep getting stronger.
Bitcoin dipped below $75,000 Sunday and is trading around $74,500, with no sign of bullishness at the moment. That alone isn't a big deal. What matters is what's happening today: the Nasdaq 100 is up over 3%. Bitcoin usually moves with tech stocks. When tech bounces and Bitcoin still goes down, that's weakness.
Gold, on the other hand, is around $4,100 an ounce, after a strong bounce on Sunday. Silver is near $53 after the Sunday bounce.
Bitcoin 2-week chart showing the red dot on Market Cipher B's momentum wave
The 2-week red dot 🔴
I use Market Cipher B's momentum wave as one of my tools. Bitcoin just printed a red dot on the 2-week chart. A red dot means momentum has crossed to the downside.
On a 15-minute chart, a red dot can come and go in an hour. On a 2-week chart, every candle covers two weeks of trading, so a signal there carries a lot more weight and can play out over weeks or even months. This is pretty heavy downside momentum, and I don't ignore it.
It also lines up with what price has been doing. Bitcoin lost the $80,000 to $82,000 zone that was support for weeks, failed to reclaim it after the midterms, and has now slipped below another major support level at $75,000. In a previous article, I said Bitcoin was likely to hit $75,000 once we broke support at $81,000, and here we are. Set a reminder to read my articles every Monday, Wednesday and Friday.
Gold and silver are doing the opposite
Gold dropped to about $3,870 on October 30, its lowest level in over a year. It's now back above $4,100, up more than 6% from that low. Silver is following.
I went long gold and silver right at that bottom, on both Phemex and Breakout Prop (I'm an affiliate of both), and I bought physical silver too. Those longs are very strong right now, and I'm holding them.
Go long strength, short weakness
This is the simplest rule I trade by. You compare an asset to its own recent price action first, then to everything else. Right now gold and silver are making higher lows and holding support. Bitcoin is making lower lows, even on a day when tech stocks are green.
I'm not going to fight that. The money is flowing toward strength, so that's where I want to be. This works on any timeframe. Just make sure the timeframe you trade is the one your plan is built on, and don't let a 15-minute chart talk you out of a 2-week signal, or the other way around.
What's driving it
Friday's jobs report came in much stronger than expected. Employers added 165,000 jobs against a forecast of about 65,000, and the unemployment rate dipped to 4.1%. After that report, markets priced in about an 80% chance of a Fed rate hike at the December 8 to 9 meeting.
Higher rates for longer are rough on risk assets like crypto. Gold has a long history as a store of value when people get nervous about inflation and the direction of the economy. The October CPI inflation report comes out tomorrow, and a hot number would add fuel to the hike talk.
How I'm positioned
I'm long gold and silver, and I'm holding physical gold and silver. On Bitcoin, I'm sticking to the plan I mentioned in a previous article: dollar cost averaging (DCA), which means buying a fixed amount on a regular schedule no matter what the price does. A 2-week signal can take a while to play out, and I'm not trying to call the exact bottom. What I'm not interested in right now is a Bitcoin long as a short-term trade, not while the 2-week momentum is red and price is below the $80,000 to $82,000 zone.
If Bitcoin reclaims $80,000 to $82,000 and the momentum wave turns back up, I'll change my mind. That's the whole point of trading momentum instead of opinions.
I'll be posting what I'm seeing in real time in The Profit Circle, my private Discord community. If you want to learn how I read moves like these, that's what I teach at CassiusCuvee.com, and Swell Point is built to help you spot when momentum actually shifts after the noise. GetSwellPoint.com
General chat in The Profit Circle is free! 🌊
Cassius Cuvée
Cassius Cuvée is a full-time trader, financial commentator, and trading educator based in the Bay Area of California. He has traded full-time since 2020 and follows the markets seven days a week, with a focus on Bitcoin and cryptocurrency alongside stocks, precious metals, oil, and bonds. His specialty is Bitcoin and cryptocurrencies, especially how Bitcoin moves in relation to the NASDAQ and major tech equities. He studies the markets through a macro lens and the cycles that drive them, but he trades the short term. He teaches scalping, day trading, and swing trading, and uses that cross-market view to explain price action and the setups he is watching. Cassius is also a recording artist and a self-described reality rapper, using his words to precisely explain what is happening in his environment, including how the financial markets work. That same precise approach carries into everything he teaches. He publishes market commentary on his Substack, Above the Noise 🌊, every Monday, Wednesday, and Friday, and posts throughout the day, seven days a week, in his private Discord community, The Profit Circle. He also runs a YouTube channel with more than 64,000 subscribers and is the creator of Swell Point, a proprietary indicator. His website, cassiuscuvee.com, produces educational content built to help everyday traders understand what is really moving the markets.
