Bitcoin
Bitcoin (BTC) seems poised for a potential breakout this week amid increasing speculation surrounding the approval of Bitcoin exchange-traded funds (ETFs). Investors are eagerly awaiting the U.S. Securities and Exchange Commission (SEC) approval for Bitcoin ETFs, and on Friday, the Securities and Futures Commission (SFC) in Hong Kong announced it is ready to start accepting applications for digital Bitcoin funds. Just like in the U.S. so far, the SFC has only approved Bitcoin funds linked to futures contracts, not funds holding the assets directly. Bitcoin proponents assert that the approval of a digital Bitcoin fund will pave the way for other cryptocurrency funds, making this asset class more accessible to institutional investors and participants in traditional markets.
Since Bitcoin’s price surpassed $44,000 in early December, it has settled within a flag-like chart pattern, which typically indicates a continuation of the current trend. If a breakout occurs upwards, keep an eye on how the price reacts around the $48,000 level, where it could face resistance from a significant spike in March 2022. Note that a breakdown from the pattern could be an early signal of a reversal in the current trend.
WTI Oil
West Texas Intermediate (WTI) oil opened steady in early Tuesday trading but may see increased volatility in the coming week due to supply concerns. Recent attacks on ships in the Red Sea by the Iran-backed Houthi group related to the Gaza war have raised supply costs as shipping companies impose additional fees to reroute oil tankers. Meanwhile, Angola announced late last week that it would be leaving the Organization of the Petroleum Exporting Countries (OPEC) over a dispute regarding production quotas, fueling speculation that the oil-rich country may increase its output and add excess supplies to global oil inventories.
The price of WTI oil has rebounded from a key support area at $68 but may face renewed selling pressure this week after recently crossing the 50-day moving average above the 200-day moving average, forming the ominous “death cross” pattern. Key areas on the chart to monitor include a critical support line connecting a series of prices near the lows of 2023 and the upper line of a descending channel that may act as a resistance point.
SPDR S&P Biotech ETF
The SPDR S&P Biotech ETF (XBI) rose by 3.5% on Friday after leading pharmaceutical manufacturer Bristol Myers Squibb (BMY) announced it will acquire biotech company Caruna Therapeutics (KRTX) for $14 billion. Shares of Caruna, which has a 1.25% allocation in the ETF’s portfolio, surged by 48% following the news. The deal will involve Bristol Myers Squibb paying $330 per share in cash for Caruna and provides the drug manufacturer with a treatment for psychotic disorders associated with Alzheimer’s, a disorder affecting about 40% of Alzheimer’s patients. Caruna’s drug for treating schizophrenia, known as KarXT, is currently under review by the U.S. Food and Drug Administration (FDA), with a decision expected in the third quarter of next year.
The ETF’s price has fluctuated within a descending channel since August 2022. Following a bearish trap set beneath the pattern in October, the price has increased by more than 35% and is now trading near the upper line of the channel. In upcoming trading sessions, watch for breakout patterns supported by higher volume at the top of the descending channel. In the long run, the $120 level should be monitored as the main horizontal line may provide upper resistance.
Crossing
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Source: https://www.investopedia.com/3-charts-for-investors-to-watch-tuesday-bitcoin-oil-xbi-etf-8420081
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