The Bitcoin chart is a thing of beauty. The obvious resistance line is drawn from the highs in 2018, 2022, and then again in December 2024 and January 2025. Other than a brief trip above the line in 2021, that line has held for seven years—until this week. We don’t have a weekly close as I write this on Saturday morning, but it would certainly appear that the resistance line is broken.
That bodes very well for Bitcoin. It’s an all-time high. There is no overhead resistance. Everyone who owns it is in profit. Which begs the question:
What’s next for Bitcoin?
If you draw a Fibonacci retracement pattern from the February 2025 highs to the April 2025 lows, it looks like this:
So, a run to $130,000 is not out of the question, with an upper bound around $165,000 possible. Of course, a correction back to $100,000 or lower is also likely. We shall see.
Which brings us to MSTR—Microstrategy Inc. (now Strategy Inc., but the ticker symbol has yet to change), which was up 8% on the week. Nice.
As you know, I’ve been running an experiment. I bought 200 shares of MSTR back in January for around $335, and I’ve been selling covered calls against them. Since then, I’ve lost just over $1,000 on my covered call strategy. I would have been better off to just hold.
However, those shares are up over $19,000, so the overall trade is a good one.
The problem is that when MSTR is ripping higher, the calls increase in value, so I have to buy them back at a loss if I want to keep my shares (which I do).
So, since the middle of May, I have changed my Strategy (pun intended). Instead of selling slightly out of the money calls with a week or two to expiration, I’m now selling calls way out of the money on Thursday that expire the next day. I don’t get much of a premium, but they are almost guaranteed to expire worthless, which is the point.
This week I waited until Friday morning, and sold calls that were $10 out of the money for just over $1. They expired worthless and I kept the dollar (thanks to a big run up at the opening).
Since that strategy is working, I’ll keep doing it during what I hope will be a continued bull run for the next few weeks. We shall see.
I’ll Keep it Brief
May 31, 2025I’ll spare you the charts this week, and keep it brief. Bitcoin appears to be breaking down, and may go below $100,000. Long term, it doesn’t matter. Gold is also under pressure. The stock market isn’t looking great. So, I stay the course. Fortunately my MSTR call options expired worthless this week, so that helped […]