Summary Upgrade iShares Bitcoin Trust ETF (IBIT) to buy as risk/reward improves amid recent sell-off and technical wash-out signals. IBIT and bitcoin have experienced significant drawdowns, but high volatility and record ETF outflows suggest capitulation selling is underway. Technical analysis points to a $77,000 downside target for bitcoin, with potential for further buying opportunities if prices dip another 5-10%. Despite recent bearish trends, current pessimism and volatility often precede strong entry points for IBIT and bitcoin exposure. I am upgrading the iShares Bitcoin Trust ETF ( IBIT ) to a buy. Let’s get right to it. I was cautious on the world’s most valuable cryptocurrency just a month ago , and the fund is nearing a key technical target while indicators point to wash-out conditions in the immediate future. Taking a step back, both bitcoin and ether are now down by more than 10% on the year after having sported YTD gains of more than 30% as recently as early October. But an October 10 liquidity unwind portended the stock market drop, and we’ve seen the cryptocurrency space generally lead equity trends lately. I expect a wash-out (or capitulation) selling event in the days ahead, so buying IBIT now, and potentially adding at one key price point, is the way to play it, in my view. Let’s dig in. Bitcoin & Ether Down > 10% YTD 10% YTD" width="640" height="282" contenteditable="false"> Stockcharts.com According to the issuer , IBIT enables investors to get exposure to bitcoin through the convenience of an exchange-traded product, helping remove the operational, tax, and custody complexities of holding bitcoin directly. For context, bitcoin is now in a 35% drawdown from its 52-week high. Ether is off 44%, while Solana is down a whopping 52%. Of course, in previous crypto winters, we’ve seen bitcoin plunge 60% or more. So, simply because it’s down, we can’t argue that it’s a pure buy. We must go deeper. 52-Week Drawdowns: Bitcoin -35% Koyfin Charts What makes the current giveback so disappointing if you are long like IBIT (like myself) is that it comes amid what’s usually a bullish time of year. October through December has often been high times for the bulls, with ample year-end rallies. Not this time. After a modest decline last month, the November retreat is 25%, marking the third-worst monthly loss this decade. But keep in mind that from 2018 through 2022, bitcoin was down four times in the penultimate month of the year. A risk is that December will see follow-through selling—that happened in those four previous negative-November instances. Bitcoin Seasonality: Worst Month Since June 2022 Barchart Just this week, though, there have been signs of capitulation selling. IBIT is down 13% since last Friday’s close, with bitcoin itself plunging 12% peak to trough from Thursday morning to Friday morning (as of this writing). Week-to-Date Returns: IBIT -13% Finviz But where do we see bottoming signs? Implied volatility is one spot. IBIT’s “vol” jumped to 60% earlier in the year, and that’s very close to where it is today. Like with the S&P 500, when volatility spikes, it often marks a solid buying opportunity. Moreover, bitcoin ETFs saw a record $3.79B outflows in November—a clear sign of mass selling and a possible wash-out. IBIT Implied Volatility Spiking Fidelity 2nd largest outflow from crypto funds on record BofA Global Research The Technical Take Finally, the chart tells the biggest optimistic story. Notice in the graph below that a bearish megaphone (or broadening top) pattern played out from July through earlier this month. It's a pattern I pointed out as a key bearish risk in my October 2025 analysis. Unfortunately for holders like me, it has played out all too precisely. The formation has a downside price target of near $77,000, which is now quite close to the current price. Enough so that it’s worth stepping into a position, and perhaps adding to it 5-10% lower. The price objective is calculated based on the max height of the pattern (from $104k to $126k), which was $22k. Subtract that from the breakdown point of $99k, and we arrive at $77k. You may have also heard about bitcoin’s death cross that occurred last Sunday. Previous instances of the death cross were actually buying opportunities, but that did not unfold this go-round. Instead, it may result in a 20% decline over just a handful of days. Finally, the April low is key to hold—near $74,400. Bitcoin: $77,000 Technical Target Following the Megaphone Pattern & Death Cross Stockcharts.com The Bottom Line I have a buy rating on IBIT. I was cautious about the biggest crypto ETF just a month ago, but I see much better risk/reward signatures today. Volatility is high, and pessimism is through the roof. But that setup often makes for the best entry chances with bitcoin and IBIT.
