Playing The Bitcoin Breakout With BITU

Summary Bitcoin’s chart shows a constructive trend, with animal spirits returning, suggesting a potential rally above $100k per coin. Bitcoin’s correlation with tech stocks has increased since spot ETFs were approved. That said, it remains a strong anti-fiat asset as global M2 rises. Technical indicators are positive, with Bitcoin breaking key resistance levels and moving averages, signaling a potential upward price movement. ProShares Ultra Bitcoin ETF offers a leveraged exposure to Bitcoin’s rally, but it’s crucial to understand the risks of 2x leveraged ETFs. In my recent coverage of Bitcoin ( BTC-USD ) I’ve held a more cautious view due to a variety of factors. Among other things, the capital flow story was deteriorating through March and the chart appeared to be going through a consolidation phase that allowed for more price discovery between the $75k and $87k per coin range. After two months, Bitcoin’s chart looks far more constructive and animal spirits appear to be returning to the market. In this article, we’ll look at Bitcoin’s recent correlation with US equities, implications from the daily and weekly price charts, as well as why I think the ProShares Ultra Bitcoin ETF ( BITU ) can be a useful tool for leveraging a Bitcoin rally back over $100k per coin. Correlations Bitcoin’s correlation with tech stocks has been trending higher since spot ETFs were approved in the United States in January 2024: BITO, QQQ 30 Day Rolling Correlation (Portfolio Visualizer ) While there have been occasional dips in that correlation throughout the last 15 months, BTC has indeed had a closer relationship with the equity market than it has with the something like Gold ( XAUUSD:CUR ) over the last three and half years: Correlations BITO QQQ SPY GLD ProShares Bitcoin ETF ( BITO ) 1 0.44 0.43 0.11 Invesco QQQ Trust ( QQQ ) 0.44 1 0.96 0.14 SPDR S&P 500 ETF ( SPY ) 0.43 0.96 1 0.16 SPDR Gold Shares ( GLD ) 0.11 0.14 0.16 1 Source: Portfolio Visualizer, Asset correlations for time period 10/19/2021 – 04/24/2025 based on daily returns This is perhaps to the chagrin of Bitcoiners who view the asset as the digital equivalent of Gold – the latter of which has been on a rocket ship ride since breaking above $2,000 per ounce in early 2024. However, while investors/speculators can debate Bitcoin’s past, present, and future as a ‘safe-haven’ asset, there is very little doubt in my own mind that Bitcoin continues to be a terrific anti-fiat trade. And history shows that as global M2 rises, the fiat-denominated price of BTC increases: BTC vs Global M2 (BGeometrics) Thus, as global M2 continues to rise, it stands to reason that BTC should follow. Consider the last time global M2 growth hit the 6% level – where it again currently stands now – BTC nearly doubled from $57k per coin in September 2024 to well over $100k in early 2025. To be clear, none of this means the same has to happen again, but given the level of debt throughout the global economy and the propensity for global governments to print when the going gets tough, BTC is not an asset that I think would be wise to short. Especially given what I see to be a clear technical breakout here in late-April. Technical Viewpoint When I look at Bitcoin technical indicators, I generally like to keep daily and weekly time-frames as the primary drivers of my decisions. Looking at the daily chart first, I see several positive signs: BTC Daily Chart (TrendSpider) Bitcoin held the 50-day MA for 4 straight sessions before moving convincingly higher on April 21st The coin has rallied through both the 100 and 200 day MAs in the sessions since It has taken out horizontal resistance at $90k It broke above trend-line resistance that dates back to January And the ‘Crypto Fear and Greed’ index has moved convincingly out of fear and into greed Shifting to the weekly chart, I’ve typically looked to the 8 and 20-week moving averages as my favorite indicators for increasing or decreasing exposure in the asset and its proxies. BTC Weekly Chart (TrendSpider) As of article submission, the weekly chart setup looks terrific. After battling with the 8-week MA for 4 consecutive weeks, we have a clear breakout above the 8 week and 20 week with our current candle. Something to keep in mind is the 8 week is still below the 20. But it does appear as though the 8-week MA will generate a week-on-week increase for the first time since February. Given everything I just laid out, I think it’s reasonable to expect the price to head upward. Why BITU? I have covered BITU for Seeking Alpha in the past. For more of a fund-oriented view of the product, I’d encourage readers to get a proper sense for the risks associated with 2x leveraged ETFs. These are not products that are intended for long term holding, and they will decay over long periods of time due to daily re-balancing. Comparing BITU to a similar 2x fund as well as other Bitcoin-related ETFs, BITU is on the smaller side at under $1 billion in AUM: Fund Name Inception Expense Ratio AUM ProShares Ultra Bitcoin ETF 04/01/2024 0.95% $933.71M 2x Bitcoin Strategy ETF ( BITX ) 06/27/2023 1.90% $2.39B iShares Bitcoin Trust ETF ( IBIT ) 01/05/2024 0.25% $54.48B ProShares Bitcoin ETF 10/18/2021 0.95% $2.40B Data by YCharts Data by YCharts

Source: Seeking Alpha