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The Daily Breakdown takes a closer look at the crypto market, as Bitcoin hits new highs and Ethereum hovers just below its prior record.
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What’s Happening?
Bitcoin and Ethereum were heating up yesterday, with both charging toward their record highs. There was a question of whether they could hit new all-time highs, and if so, which one would do so first.
Bitcoin was able to hit that mark, clearing its high from one month ago near $123,200. In overnight trading, BTC eclipsed the $124,500 mark, but has since retreated from those highs. In fact, as of 8:00 a.m. ET, it’s down almost 2% on the day as it tries to stay above $120K — which had been resistance for the past month.
As far as ETH is concerned, it’s holding up a little better, down just slightly on the day. After rallying more than 50% in the past month and 75% in the past three months, Ethereum now sits just 3% below its record high from 2021.
What else is moving: With the moves in crypto, remember it will impact stocks and certain ETFs, like IBIT, ETHA, and MicroStrategy.
Some other cryptocurrencies that are in focus this morning include Solana as it tries to regain and hold $200, Cardano as it surged back toward $1.00, and Berachain as it was up more than 10% as of 8:00 a.m. ET.
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The Setup — DIA
The S&P 500 and Nasdaq are in focus as they hit new record highs, while small caps are in focus as they surge higher this week (more on that below). However, not many investors seem to be talking about the Dow hovering just below its record highs. Below is a look at the DIA ETF:
Bulls are looking at the $450 area as potential resistance…but also as a potential breakout level. If the Dow can clear this zone, it could open up more upside potential. However, if this area remains resistance, then bears might look to capitalize on a potential pullback.
Options
For some investors, options could be one alternative to speculate on DIA. Remember, the risk for options buyers is tied to the premium paid for the option — and losing the premium is the full risk.
Bulls can utilize calls or call spreads to speculate on further upside, while bears can use puts or put spreads to speculate on the gains fizzling out and DIA rolling over.
For those looking to learn more about options, consider visiting the eToro Academy.
What Wall Street’s Watching
IWM
Small caps were in focus again yesterday, with the IWM ETF gaining another 2% on the day. The IWM is now up about 5% so far for the week, putting it on pace for its best week since November. Bulls are buying small caps in hopes of a Fed rate cut next month.
DE
Shares of Deere are stumbling this morning, falling in pre-market trading after the company delivered disappointing earnings. While revenue declined year over year, earnings and sales topped analysts’ expectations. However, management trimmed its full-year profit outlook as tariffs take a bite out of the bottom line. Dig into Deere’s fundamentals.
HD
Small caps are rallying on rate-cut hopes and so are Home Depot and Lowe’s. Both stocks are up nicely this week — up about 5% and 6%, respectively — as investors speculate that lower rates will lead to more home improvement projects. The gains come after last week’s solid performance as well. Check out the charts for HD and for LOW.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.
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