Bitcoin $100K Triggers Livermore Round Number Rule
Jesse Livermore was the most infamous American stock trader of the early 20th Century. Best known for making and losing fortunes during his career, Livermore scored his most wealthy trade by shorting the Great Depression and profiting from the stock market crash of 1929.
Though he often took too much risk as a trader at times, Livermore is known today in Wall Street circles as a pioneer of stock market speculation. Outlined in the book “Reminisces of a Stock Operator,” Livermore introduced the world to support and resistance, trend following, psychological discipline, leading stocks, and risk management.
One of Livermore’s most valuable lessons, which I have integrated into my own trading system, is the “Livermore Round Number Rule.” Livermore discovered that round numbers like $50 or $100 often act as psychological barriers for traders (this is why retailers usually sell items for $4.99 instead of $5 today).
A stock will typically bump its head on a significant round number level several times, but when it finally breaks through, it opens the floodgates for much higher prices. We have seen with Bitcoin and the $100K level. The world’s leading digital asset has bumped its head on the $100k level thus far, but investors should note how price has not broken down. When Bitcoin finally clears the $100K level with authority, I anticipate the Livermore Round Number Rule will play out.
Image Source: TradingView
Bitcoin Seasonality is Entering Bullish Period
Jeffrey Hirsch (@almanacTrader) is best known for his annual “Stock Trader’s Almanac,” which provides invaluable data on historical seasonality patterns in stocks and different assets. Hirsch explains, “Those who understand market history are bound to profit from it.
Now that Bitcoin has been around for more than a decade and has ample data available, Hirsch has run the historical seasonality patterns. These seasonality patterns suggest that Bitcoin is entering the seasonality sweet spot.
Image Source: Hirsch Holdings
SEC Staff Drops Coinbase Enforcement Case
After being entangled in legal battles with the Securities and Exchange Commission for several years, the Trump administration’s SEC agreed in principle to dismiss its case against Coinbase (COIN), the leading crypto exchange. In a statement Friday morning, Coinbase released a statement that explained:
“Coinbase went public in April 2021. As part of that process, the SEC reviewed our business model and S1 disclosures and allowed us to go public. Two years later, they sued us. That’s despite absolutely nothing changing in our business model. What changed over those two years was the political leadership at the SEC. In its war against crypto it acted as if it was above the law, usurping power of Congress as set forth in the constitution And after millions in legal costs and fees, countless employee hours, and years of protracted litigation, we have successfully protected our customers’ rights, and held the SEC accountable…Clarity will bring new inflows of capital into the US, update our financial system so consumers pay lower fees, and help create economic freedom for all.”
The Coinbase victory is a clear signal to investors that the political winds have shifted in favor of crypto. Regulatory clarity is a bullish catalyst for the crypto industry and Bitcoin.
US Bitcoin Strategic Reserve Looms
With Bitcoin’s success as an asset, pro-crypto political figures have become more outspoken about an American Bitcoin strategic reserve. Senator Cynthia Lummis recently introduced “The Bitcoin Act,” which seeks to establish a Bitcoin reserve “to serve as an additional store of value to bolster America’s balance sheet.” Meanwhile, David Sacks, Trump’s “Crypto Czar,” is currently studying the feasibility of a US Bitcoin strategic reserve.
Bitcoin Access and Adoption
Bitcoin ETFs like the iShares Bitcoin ETF (IBIT) have made Bitcoin accessible to more investors than ever before. In addition, companies like Semler Scientific (SMLR), MicroStrategy (MSTR), and Rumble (RUM) are adding millions worth of Bitcoin to their balance sheets.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
