Bitcoin is the undisputed leader of the cryptocurrency asset class. In a November 10 Barchart article highlighting Bitcoin, I wrote:
The bullish technical break in October 2023 could lead to much higher prices for Bitcoin, Ethereum, and other cryptocurrencies as investors, trend-following traders, and speculators flock to the asset class. However, the historical trading pattern shows that the higher they rise, the greater the odds of another price implosion. Like a game of speculative musical chairs, when the bullish music stops, buyers become sellers, and prices can plunge.
Last week, Bitcoin rose to over $44,000 per token, the highest level since April 2022. With the leading crypto at high 2023 highs late in the year, a speculative frenzy could take Bitcoin to higher highs over the coming weeks.
The next technical resistance level is at over $48,000 per token
Bitcoin is steaming toward the March 2022 high, the technical resistance area on the long-term chart.
As the chart dating back to 2010 shows, Bitcoin’s next upside target is $48,187.21, the March 2022 high. Above there, Bitcoin faces resistance at $59,043.43, the December 2021 peak, and $68,906.48, the November 2021 record high.
Ethereum rises to a new 2023 high- The technical target is above $3,500 per token
Ethereum, the second-leading cryptocurrency, has followed Bitcoin higher, moving to a new 2023 high.
The chart illustrates at a high of over $2,400 per token on December 8, 2023, Ethereum is moving towards the $3,579.866 peak. Ethereum’s all-time high was $4,865.426 in November 2021.
At the late 2021 highs, the cryptocurrency asset class’s market cap rose to the $3 trillion level. On December 8, it was over $1.6 trillion. Bitcoin’s market cap was 53.7% of the total, while Ethereum’s was 17.1%. The two leaders had 70.8% of the total market cap. Bitcoin’s was over $860 billion, with Ethereum’s near $275 billion. Tether (USDT) had around a $90 billion market cap and was the third most valuable crypto. However, Tether’s market cap was one-third of second place Ethereum’s, indicating the asset class’s significant value concentration in Bitcoin and Ethereum.
RIOT has a great year with more upside potential
Riot Platforms Inc. (RIOT) is a Bitcoin mining and digital infrastructure company. At the $15.83 per share level on December 8, RIOT had a market cap of over $3.269 billion. RIOT is a highly liquid stock, trading an average of over 26.28 million shares daily.
The chart shows that after reaching a $3.25 low in late December 2022, RIOT shares have rallied 387% over the past year. Technical resistance is at the July 10, 2023, $20.65 per share, and RIOT traded to $79.50 in February 2021. RIOT could have lots of upside if the rally in Bitcoin and cryptocurrencies continues.
MARA is in a bullish trend
Marathon Digital Holdings Inc. (MARA) also mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets. At $16.78 per share, MARA’s market cap was around $3.735 billion, with average daily trading volume at nearly 49 million shares.
When Bitcoin reached its bottom, MARA reached a $3.11 per share low in late 2022. At $16.78 on December 8, MARA was over 439.5% higher. Technical resistance is at the July 2023 $19.88 high. In November 2021, when Bitcoin peaked, MARA traded to $83.45 per share. Like RIOT, MARA will track Bitcoin higher or lower over the coming weeks and months.
BITQ moves towards a critical resistance level
The Bitwise Crypto Industry Innovators ETF (BITQ) tracks the performance of companies involved in blockchain and the digital currency asset class. At $10.18 per share on December 8, BITQ had around $115.3 million in assets under management. The ETF trades an average of more than 180,000 shares daily and charges a 0.85% management fee.
After trading to a $3.20 low in late December 2022, BITQ has more than tripled over the past year. Technical resistance is at the July $11.34 high. BITQ traded to a record high of $35.68 in November 2021.
The trend is always your best friend in markets. Cryptocurrencies, a highly speculative asset class, have a history of boom-and-bust price action. They are back in boom mode after reaching significant bottoms in late 2022. If Bitcoin and Ethereum are moving towards a challenge of the November 2021 record highs, expect RIOT, MARA, and BITQ to follow on the upside. These liquid stocks are regulated and do not require computer wallets or holding cryptos on platforms.
The upside potential comes with commensurate risks. Only invest capital you are willing to lose in the cryptocurrency asset class, as the oversized reward potential involves the risk of a total loss.
On the date of publication, Andrew Hecht did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
