While fewer growth stocks are breaking out of bases, another type of asset has suddenly popped into a buy area: bitcoin ETFs.
On Friday, the 11 spot bitcoin exchange traded funds were having their best day since they started trading on Jan. 11. They climbed more than 6% in afternoon trades, marking a bullish turnaround from a nearly two-week slump.
The positive chart action can best be viewed in the chart of Grayscale Bitcoin Trust. Shares started trading in May 2015 as a vehicle that tracked bitcoin through a trust. It converted as a spot bitcoin-tracking fund when regulators authorized those crypto ETFs this month.
After pulling back to the 10-week moving average, shares rebounded in one of the heaviest weeks of trading in three years. That sets up a buy zone from 35.45 to 39, based on IBD trading principles. It also marks the first buy point since GBTC broke out of a base past a 21.88 buy point on Oct. 16.
How Rival Bitcoin ETFs Fare
Other bitcoin funds that launched this month lack the chart history of the Grayscale. Yet, all track the same asset, so the bullish turn applies to the entire family of ETFs.
One drawback with Grayscale Bitcoin Trust is that it charges 1.5% management fee — much higher than other spot-bitcoin ETFs. Some have zero fees.
Still, the Grayscale fund is one of the most heavily traded bitcoin ETFs, with average daily volume of nearly 11 million shares.
Fidelity Wise Origin Bitcoin Trust is averaging more than 10 million shares a day. IShares Bitcoin Trust leads with more than 17 million average daily volume, according to MarketSmith.
