By coinnews 
Did you know that, since its inception, Bitcoin has been the best performing asset class worldwide?
In fact, at its current $1.87 trillion valuation, Bitcoin has even surpassed Alphabet (formerly Google) to become the world’s fifth largest asset. Only behind Nvidia (NVDA), Microsoft (MSFT), Apple (AAPL), and gold!
However, the recent market tariff turmoil resulted in a “risk-off” environment and a 30% pullback from the all-time high of $109k achieved last year.
Bitcoin Decouples
One of the long-term bearish arguments against Bitcoin is that it is just another “risk-on” asset.
Historically, you may have observed that Bitcoin has acted like a leveraged Nasdaq product, dramatically outperforming in equity bull markets and underperforming in bear markets.
However, this week, Bitcoin and the iShares Bitcoin ETF (IBIT) went a long way in disproving that.
Despite the carnage in equities early in the week, Bitcoin rose 3%, regaining its 50-day moving average.
The relative strength in the world’s largest cryptocurrency stood out like a sore thumb Monday, but it’s not just a one-day occurrence; it is becoming a trend.
While the Nasdaq and the major US equity indexes are stuck below their long-term 200-day moving averages, Bitcoin is above its mid-term 50-day moving average.
Meanwhile, Bitcoin is nearly flat, while the S&P 500 Index ETF (SPY) and Nasdaq 100 Index ETF (QQQ) are each down double digits.
Bitcoin is a Safe-Haven Against Tariffs & Fiat Mayhem
With China and the United States currently stuck in the middle of a nasty and escalating trade war, there is a plethora of macroeconomic uncertainty.
Unlike fiat currency, Bitcoin has unique and powerful attributes, including scarcity, decentralization, and global accessibility.
As trade wars press on, international investors will likely park some of their funds in Bitcoin, leveraging the unique asset as an escape hatch.
Liquidity is King
In over two decades of investing experience, I have learned that liquidity is king on Wall Street.
But don’t just take it from me, take it from legendary billionaire investor Stanley Druckenmiller.
Druckenmiller teaches that:
“Earnings don’t move the overall market; it’s the Federal Reserve board…focus on the central banks, and focus on the movement of liquidity… most people in the market are looking for earnings and conventional measures. It’s liquidity that moves markets.”
Fed Chair Jerome Powell recently portrayed a “Hawkish” tone, signaling that he was not ready to cut interest rates and was concerned about the potential for tariff-induced inflation.
But I always teach that it’s important that investors like you should pay attention to what the Fed is likely to do, instead of blindly listening to its rhetoric.
In other words, you should rely on what the market is pricing in, because, after all, it represents real-time, real money odds.
The Chicago Mercantile Exchange (CME) FedWatch Tool, an indicator that tracks the latest odds of a FOMC rate move, suggests that multiple interest rate cuts will occur in 2025 – a bullish sign for assets like Bitcoin.
Bitcoin is Correlated to the Money Supply
However, it’s not enough to focus only on US liquidity.
Remember, Bitcoin is an international asset.
Thus, we must focus on global liquidity.
Global M2 measures the world’s money supply or the different forms of liquid assets that can be quickly turned to cash.
Bitcoin exhibits a shockingly high correlation when compared to M2 (with a 60-to-90-day lag).
With central banks primed to print money and global M2 set to soar, Bitcoin should follow suit.
Bitcoin’s Bullish Seasonality Period
Historical seasonality patterns have been extremely accurate for Bitcoin in recent years.
The seasonality roadmap suggests that Bitcoin should rally into August before retreating.
Continued . . .
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Bitcoin Adoption Among Public Companies
MicroStrategy (MSTR) founder Michael Saylor and his company received a plethora of flack when it added Bitcoin to its balance sheet and adopted a “Bitcoin Reserve Strategy.”
That said, the strategy has paid off – big time.
MSTR shares are up more than 2,000% over the past five years, dwarfing the 107.9% returns of the S&P 500 Index.
While MSTR still has its fair share of skeptics, it has not stopped other public companies like GameStop (GME), Semler Scientific (SMLR), and Rumble (RUM) from adopting a Bitcoin strategy of their own.
GME and others that have just begun accumulating BTC, are likely to accumulate more over time, helping to drive up the price.
Nation-State Adoption
Isn’t it amazing what price appreciation can do for an asset?
Bitcoin has transformed from an obscure, often scoffed at, cryptocurrency mainly used for nefarious activity.
However, with dark websites like “The Silk Road” shutdown, Bitcoin is still used today for international remittances and “digital gold,” and nation states are noticing.
El Salvador, a tiny Latin American country, became the first to adopt Bitcoin.
In 2021, President Nayib Bukele announced a bill that El Salvador would accept Bitcoin as legal tender.
Today, merchants across the country accept Bitcoin, and El Salvador has made millions off its Bitcoin purchases.
Fast forward to 2025, and the United States is beginning to follow suit.
In March, President Donald Trump established a “Strategic Bitcoin Reserve.”
That means that instead of selling the hundreds of thousands of Bitcoins the government has seized over the years (the US government holds the most Bitcoin worldwide), the US government will keep all of its Bitcoin for the long term.
In addition, the pro-crypto policies are unlikely to stop there.
For instance, US Secretary of Commerce Howard Lutnick owns hundreds of millions of dollars worth of Bitcoin.
Meanwhile, Paul Atkins, the new Securities and Exchange Commission Chair, was involved in numerous crypto advocacy ventures before being sworn in by the Trump administration this week.
Relative Price Strength
During bear markets, the best thing investors can do is look for relative price strength.
A good metaphor for this is to look for the tennis balls vs. the eggs, or those assets that bounce instead of break during market volatility and mayhem.
These assets are likely to perform best when the dust settles.
While the major market indices and the vast majority of stocks are below their 200-day moving averages, Bitcoin remains above it – a subtle yet powerful sign of relative strength.
Bitcoin Technical Analysis
Typically, in the study of technical analysis, the more signals a technician observes, the higher the probability of being correct.
On Wall Street, we call multiple signals that align a confluence. Currently, Bitcoin and iShares Bitcoin Trust (IBIT) have a confluence of four distinct signals:
• Retest of Previous Breakout Zone: IBIT is currently retesting its breakout zone from November from a seven-month base structure. A previous breakout area can act as an area of support, especially with so much “price discovery.”
• Election Day Gap Fill: Because IBIT is an ETF, it has price gaps from overnight trade evident on the chart. Finally, Bitcoin is filling the November election day gap, an area that should act as support.
• 200-day Moving Average Tag: IBIT tagged its rising 200-day moving average for the first time in its history recently. The first tag of a rising 200-day moving average is a zone where institutional investors tend to step up to support shares.
• 3 Corrective Waves: Elliot Wave Theory suggests that sellers may be fatigued when a stock has three corrective selling waves (with wave 3 being the deepest).
Bitcoin Bottom Line
Despite a recent pullback, Bitcoin has demonstrated strength by decoupling from traditional “risk-on” assets during market turmoil, supported by factors like its scarcity, decentralization, increasing global liquidity, historical seasonality, growing adoption by public companies and even nation-states like the US with its new “Strategic Bitcoin Reserve.”
More Ways to Take Advantage of This Market
Just apply tried and true methods that work to find the best stocks.
For example, did you know that stocks with a Zacks Rank #1 Strong Buy have beaten the market in 29 of the last 37 years (a 78% win ratio), with an average annual return of more than 24% per year? That’s more than 2 x the S&P, including 4 bear markets and 4 recessions. And consistently beating the market year after year can add up to a lot more than just two times the returns.
It also killed in 1995 with a 52.6% gain; 1996 with 40.9%; 1997 with 43.9%; 1998 with 19.5%; and 1999 with 45.9%. It was also up in 2000 by 14.3% while the S&P was down.
Did you also know that stocks in the top 50% of Zacks Ranked Industries outperform those in the bottom 50% by a factor of 2 to 1? There’s a reason why they say that half of a stock’s price movement can be attributed to the group that it’s in. Because it’s true!
Those two things will give any investor a huge probability of success and put you well on your way to beating the market.
But you’re not there yet, as those two items alone will only narrow down a field of 10,000 stocks to the top 100 or so. Way too many to trade at once.
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All the best,
Andrew Rocco
Andrew has more than two decades of investing experience and believes in combining technical analysis, fundamental analysis, and strict risk management. He is the editor of our Technology Innovators portfolio and briefs you on the latest tech developments as well as other lucrative opportunities. Get started with Zacks Ultimate and our Ultimate Four report before this weekend’s deadline.
¹ The results listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research’s newsletter editors and may represent the partial close of a position. Access grants you a comprehensive list of all open and closed trades.