Bitcoin has bottomed.

That’s a “go out on a limb” statement. And I may regret it.

But from a contrarian perspective, it looks like now is as good of a time as any to bet on the “King of Cryptocurrencies.”

Let’s face it. The situation can’t get much worse for bitcoin.

The cryptocurrency market is imploding.

The cumulative value of the entire market has been cut by two-thirds since it peaked last November. Much of that decline occurred in just the past few weeks.

So-called “stable coins” have proven to be unstable, cryptocurrency exchanges have been shutting down, crypto investors have been denied access to their funds, crypto employees are getting pink slips, and the most vocal crypto cheerleaders have gone into hiding.

Like I said, it can’t get much worse… which means it can only get better.

It was just over two weeks ago when we last looked at bitcoin. We concluded the “King” was nearing a bottom. But it wasn’t here yet.

We suggested that traders keep an eye on the various bitcoin mining stocks like Marathon Digital Holdings (MARA) and Riot Blockchain (RIOT).

They tend to lead the action in bitcoin. So, once the miners started moving higher, we could expect bitcoin to rally soon afterwards.

Well… the miners started to show some relative strength late last week. That put me on the lookout for a bitcoin bottom.

And then, something happened on Tuesday that convinced me the bottom is in…

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The ProShares Short Bitcoin Strategy Fund (BITI) opened for trading.

BITI is an exchange-traded fund (ETF) that uses futures contracts to short bitcoin. The strategy is designed to profit as bitcoin falls.

Up until Tuesday, this product never existed.

Because, as the folks at BITI admitted, there wasn’t enough demand for a short bitcoin product to make such a fund worthwhile.

But now, after such a steep decline in the cryptocurrency market over the past seven months, investors are jumping over themselves to short bitcoin.

As I said earlier, from a contrarian perspective this seems like a good time to bet on bitcoin.

Think about this…

ProShares introduced their long ProShares Bitcoin Strategy ETF (BITO) last October. This fund uses futures contracts to profit as bitcoin moves higher.

It didn’t exist prior to last October. Likely because investor demand for such a fund was not strong enough to make it worthwhile for a fund sponsor to offer one.

But last October, demand was strong enough.

Here’s what’s happened to bitcoin since then…

BITO’s debut just about coincided with bitcoin’s peak.

So now, every reasonable trader ought to be asking if BITI’s debut marks the end of the recent decline in the cryptocurrency market.

I suspect it does.

Best regards and good trading,

Jeff Clark

Reader Mailbag

In today’s mailbag, Jeff Clark Trader member Karl shares his thoughts on Tuesday’s essay…

Yes, I’ve gotten into trading for less risk and hopefully to earn extra money while doing so. I haven’t earned any extra money yet, but I’m still hopeful. Thank you for giving me the courage to at least try.

– Karl T.

Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at feedback@jeffclarktrader.com.