Dear Reader,

This morning I explained what I’m seeing in the volume patterns on Bitcoin. When I brought up the chart of Bitcoin on “The Long and the Short of it” on Money Morning Live, I could tell this was a big moment.

Everyone’s favorite cryptocurrency is testing the $30,000 price line, and testing it hard! Opportunity? I say yes!

Because that even-figure number is a battleground. There will be a lot of buyers and a lot of sellers doing their thing.

But the recent move makes me think that the opportunity is to trade on the side of the sellers.

Here’s what I’m thinking. I’ve got a watchlist of five stocks that are married to Bitcoin.

As its fortunes go, so go these stocks.

A break below 30k in Bitcoin is likely to lead to a selloff of 15-20% lower. Now that’s based on the price action and the waning volume I’m seeing in the charts.

The lighter volume could also be attributed to a weakening in demand as we have seen Bitcoin investors really pumping volume hard on these attempted bounces up until now.

Now this watchlist is what I’m going to call a Derivative-of-the-Derivative trade on Bitcoin. These are the miners and other related companies benefiting from the extreme interest of cryptocurrency.

To take advantage of this potential move lower on Bitcoin, you can simply short one of these five stocks: BBIG, RIOT, MARA, HOOD, and COIN.

You can also consider looking at put options on HOOD and COIN. COIN hasn’t made it anywhere near $10, so it’s kind of a bonus trade on this list, but it may represent the best opportunity.

This watchlist doesn’t have any new trades just yet, but I’m optimistic. Come watch it with me and check us out on money morning live.

Talk soon,

Chris Johnson
Quantitative Specialist, Penny Hawk


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