Crypto Tests At All-Time Highs: Bitcoin Sentiment and Ethereum Uptrend

Bitcoin Sentiment Riding High

The Google Trend Momentum Check (GTMC) is staring down another test with Bitcoin (BTC/USD). A run-up in Google search interest in Bitcoin accompanied the run-up of Bitcoin to all-time highs. Google search interest is a proxy for sentiment. Accordingly, Bitcoin sentiment is running at extremes relative to recent levels. Per the GTMC, the two extremes of price and sentiment indicate an imminent (short-term) pause to the price trend and a pullback.

Google Trends shows recent worldwide search interest peaked on December 17th.
Google Trends shows recent worldwide search interest peaked on December 17th.

Google search interest reawakened in late October and slowly rose until the recent surge in Bitcoin sentiment. Along the way, BTC/USD enjoyed a breakout from the summer highs and a follow-through to the all-time highs on December 19th and 20th.

Bitcoin (BTC/USD) has more than doubled just since early October as investors and traders bumrush for anti-dollar assets.

This week’s small pullback in BTC/USD is consistent with the GTMC. However, a larger pullback confirms the usefulness of the GTMC for trading. If BTC/USD goes on to make a fresh all-time high without a larger pullback, I will reset the trend watch.

A New Trade: Ethereum

While I am not willing to buy back into Bitcoin just yet, I dipped my crypto toe elsewhere. For the first time I bought Ethereum (ETH/USD). ETH/USD tested its uptrending 20DMA and created a good technical entry point. I figure if I miss the next run-up in BTC/USD, I should at least profit from riding coattails with ETH/USD.

Ethereum (ETH/USD) has had a choppier ride to current all-time highs. The 20 and 50DMAs are providing support since October.

I also bought ETH/USD as a test of the Paypal Holdings (PYPL) cryptocurrency platform. Paypal recently launched crypto trading. The money transfer company is using fee-free trades as to grab market and mindshare. The fee structure after this month looks very reasonable and favors larger trade sizes. I expect PYPL to capture more and more traders over time.

Speaking of PYPL, the stock is on fire. Since breaking out to an all-time high on November 25th, PYPL is up 12.7%. I want to accumulate PYPL on the dips.

PayPal Holdings (PYPL) is on a month-long run-up since breakout out of a 4-month long trading range.

Be careful out there!

Full disclosure: long ETH/USD

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.