Summary I maintain my hold rating on IBIT, citing near-term downside risk and weakening momentum despite strong long-term fundamentals. Ether's recent outperformance versus bitcoin suggests further rotation, making me cautious on bitcoin until relative strength improves. IBIT's volatility is at historic lows, and a 10% pullback to $61 would present a more attractive entry point for adding exposure. Seasonal weakness in August-September and bearish technical divergences warrant patience, but I remain bullish on bitcoin's long-term outlook. I turned neutral on the iShares Bitcoin Trust ETF (IBIT) in Q2. The world’s most valuable cryptocurrency led the broader equity market recovery off the April low, catapulting from under $75,000 in the spring to, for a moment, a new all-time high last week above $124,000. My June hold rating looked at market data but bypassed what was happening on the chart, along with relative price trends to bitcoin’s little brother, ether. So, today I’m revisiting IBIT, but through a fresh and updated lens. I keep my hold rating when scanning these data. As holder of the fund myself (in a taxable account), I’ll call out other notable features that keep me bullish over the long haul. Bitcoin: An Unimpressive All-Time High Last Week, Back Below $120,000 StockCharts.com First, we must acknowledge the intense bullish price action with ether. In my view, this is part of the reason why bitcoin has not thrust much above its January high. The native cryptocurrency of the Ethereum blockchain network was down 57% at the year-to-date low shortly after Liberation Day. Fast forward not even five months, and ETH is now outpacing bitcoin, gold, and the S&P 500 so far in 2025. Notice in the YTD performance chart below that the red line (bitcoin relative to ether) has been trending lower since late April. That augurs for a long play on the asset in the denominator (ether). For me to turn more bullish on bitcoin, I’d like to see it hook higher on this relative chart. To be clear, IBIT is higher by a more-than-respectable 25% since December 31, 2024. I’ll note later that it sports robust risk-adjusted returns, too. ETH > BTC YTD BTC YTD" contenteditable="false"> StockCharts.com Last week, ether caught an even larger tailwind when Fundstrat’s Tom Lee published a report predicting that the token could reach five figures by year-end. A $10,000 to $12,000 price target is bold, and (in my technical expertise) the sanguine outlook really depends on ether rising above its November 2021 all-time high. That remains to be seen. If the breakout occurs, I would not be surprised to see a bitcoin selloff a bit as more money rotates from bitcoin and into ether. Tom Lee: Ether Will More Than Double By Year-End Fundstrat These are incredible prices. I posted on X that, in a sign of the times, Strategy’s (MSTR) CEO Michael Saylor is now (comfortably) wealthier than legendary hedge fund manager George Soros. Saylor ranks No. 441 on the world’s richest list, compared to 480 for Soros, largely thanks to bitcoin hovering near its all-time high. Sign Of The Times: Saylor Wealthier Than Soros Bloomberg To be clear, I like bitcoin long-term. Despite having a high correlation with the Nasdaq 100 over recent years, if we zoom out the chart, we see that bitcoin’s price action largely mimics the growth of the global M2 money supply. As illustrated below, Deutsche Bank asserts that the next leg higher in bitcoin may be overdue in light of the sharply rising amount of liquidity shuffling through markets. Bitcoin: A Practical Long-Term Hedge Against Money Printing Globally Deutsche Bank I hinted at bitcoin's solid risk-adjusted returns earlier. Indeed, last Friday’s Goldman Sachs US Weekly Kickstart report tallied bitcoin as on par with gold at the top of the 2025 performance stack. The Sharpe Ratio is well above 0, despite it being below that of gold and US junk bonds. I think that metric could improve over the months ahead. Let me explain. Asset Class Performances YTD Through August 15 Goldman Sachs You see, IBIT’s implied volatility is near an all-time low, under 40%. Its historical volatility is even more depressed, near 30%. The rally off the April low has been quite orderly. Should that persist through the end of the year, then the Sharpe Ratio would only improve further. Of course, IBIT holders know well that volatility can creep up with little notice. Are we due for a pullback? I would not be surprised. Let’s forge ahead with this technical view. IBIT: Very Low Implied Volatility, Even Softer Realized Volatility Fidelity August and September are the worst months of the year for bitcoin, historically speaking. Now through the end of Q3 has featured bouts of volatility, corrections, and even bear markets. So far, bitcoin bulls are holding their own, with the cryptocurrency up 1%. Ergo, a cautious stance is warranted through September, in my opinion. Bitcoin: Weak August-September Calendar Bias Barchart Bitcoin: Bearish Seasonal Trends Through Q3 Jeffrey Hirsch @AlmanacTrader Bitcoin Up Slightly In August, Half-Way Through The Month Koyfin Charts The Technical Take Now let’s point out some key price points on IBIT’s chart, something readers may have wished for in my previous assessment. Notice in the chart below that the technical situation looks decent on the surface—higher highs and higher lows. But there are risks. The RSI momentum oscillator at the top of the graph has printed a series of lower highs in what technical analysts would call bearish divergence to price. With waning upside momentum, I feel there is now a material chance that IBIT eventually tags its long-term 200-day moving average. I like that it is on the rise, but we saw during the April selloff and bounce that fast moves toward the 200dma can occur. When might that happen? It could take several weeks, based on where support is found. IBIT’s previous high in the range of $60 to $61 has confluenced with the symmetrical triangle (or coil) pattern from late in the first half to the start of the third quarter. That’s also where a high amount of volume by price enters the picture. Thus, a 10% pullback from here would make for a favorable entry point. IBIT: Expects A Dip To $61, Weakening Momentum StockCharts.com The Bottom Line I have a hold rating on IBIT. This refreshed look at the technicals, including relative price action to ether, which has come on strong since mid-April, asserts that there’s more near-term downside risk to bitcoin's price. I don’t plan to sell and would consider adding to the position if IBIT retreats to $61. The long-term outlook remains bright.
