Summary Volatility Shares 2x Bitcoin Strategy ETF remains highly speculative, with recent performance showing a -25% total return since the last review. Leveraged ETFs like BITX carry amplified risks and are unsuitable for traditional, long-term investment strategies. Bitcoin's current technical setup on the daily, weekly, and monthly charts are bearish in the analyst's view. Broad sentiment for Bitcoin is negative judging by social posts, fear and greed readings, and anecdotal interpretations. When I last wrote about the Volatility Shares 2x Bitcoin Strategy ETF ( BITX ) for Seeking Alpha, I cautioned bulls to wait for Bitcoin ( BTC-USD ) to regain what, I felt, was an important technical level before making any speculative trades with leverage: From where I sit, I would wait for confirmation that Bitcoin can hold key support before reversing higher to test the 200-day MA. The level that I'm personally watching is $103k on the weekly close. As fate would have it, the bounce above $103k in early November was extremely short-lived. After reclaiming that level, Bitcoin quickly gave it back just a couple of days later. The ensuing move was a larger drop that briefly took BTC under $81k per coin: Data by YCharts Since that article, BITX has a total return of -25% and Bitcoin is struggling to stay above $90k. In this update, we'll again look at Bitcoin's technical setup as well as a few sentiment indicators to assess whether a speculative BITX position makes more sense today. Leveraged ETF Risks We mention it every time we cover 2x funds like BITX, but analysts are obligated to repeat it; leveraged funds are highly risky and should not be viewed the same way investors would view more traditional products like futures or spot ETFs. BITX is a leveraged fund that aims to double the returns of Bitcoin. These types of products are designed only for active traders, not long-term investors. They shouldn't be held for long periods of time, as they will typically decay from daily re-balancing. The time to buy BITX is when Bitcoin is starting a sustained move higher. Traders should obviously completely avoid it when the market is going down. But even a choppy market that lacks clear direction is a type of market where traders should avoid BITX. My view is we're currently in a market that looks more like chop than a brewing uptrend. And if Bitcoin breaks into a clear direction, I actually think it will be to the downside. Bitcoin Charts Before we get too far into this, I want to make a clear point; I generally prefer viewing things through a more fundamental lens than a technical one. However, with 2x products specifically, I feel that technicals are the more appropriate way to assess opportunities. There are readers or other analysts on this platform who may come to a different view from the information in the charts. That's perfectly fine. I'm simply providing my assessment of the setups. With that, the daily: Bitcoin Daily Chart 1/23/26 (TrendSpider) The chart above shows 50, 100, and 200 day moving averages as well as some horizontal and diagonal trend lines to consider. The yellow arrow to the far right highlights Bitcoin breaking three supports all at the same time. First, the coin has given up the big round number of $90k. Second, it has given up the 50-day moving average less than a month after reclaiming it; which puts it below all three of those MAs listed above. And third, BTC has also given up bear flag support that started in late-November. In my view, the daily chart looks quite bad. That said, I do think the weekly looks a bit more productive. Recall what I said in early-November about BITX and the 50-week MA: I am not personally willing to play BITX for the bounce unless Bitcoin retakes the 50-week MA on this week's close. That level is currently $102,953. Following the publication of that article, Bitcoin closed the week above its 50-day MA before immediately giving it back the following week. It has not sniffed that MA since. It likely goes without saying, but it is incredibly important that traders are nimble with products like BITX. Playing a breakout is fine provided there are clear parameters for exiting. A fake breakout like the one we had in November was an obvious sign to take the small loss rather than letting it turn into a big one. The good news for bulls, is the 100-week moving average continues to serve as support. Though, admittedly, the coin is once again testing that support as of article submission. Bitcoin Weekly Chart 1/23/26 (TrendSpider) The bad news on the weekly chart is the 20-week MA crossing below the 50 - which has happened on our current candle. More importantly, the cross is happening with price below the cross. I suspect each of these MAs will serve as resistance going forward. Furthermore, the last time BTC had its 20-week cross below its 50-week MA just a few months after an all-time high price, BTC was below its 200-week MA within 6 months. Shifting to the monthly chart: Bitcoin Monthly Chart 1/23/26 (TrendSpider) Bitcoin has clearly broken below its uptrend that connected monthly bottoms between August 2024 and April 2025. The 20-month MA has been technical support going back to November. But the coin is now below that moving average; which is currently $90k. I suspect the most likely direction for Bitcoin over the short-to-medium term is a washout down to $73-75k. That would put the coin down to its March 2024 high and serve as a very important test of conviction for all of the speculators/investors who have acquired through the spot ETFs over the last two years. Sentiment Anecdotally, I'm seeing clear signs of frustration from Bitcoiners on platforms like X. While Gold ( XAUUSD:CUR ) and Silver ( XAGUSD:CUR ) continue to tear the cover off the ball, Bitcoin is essentially flat over the last 10 months and down over the last 12 months. This is almost certainly contributing to apathy towards Bitcoin on social platforms. X data shows posts containing the word "bitcoin" are at 1 year lows: Bitcoin Mentions (X, via Forklog) Stocktwits data shows Bitcoin sentiment at a 32, or 'bearish.' Another good gauge of sentiment is the crypto 'fear and greed' index, which is currently reading 24. While this does put digital assets in the 'extreme fear' category, this index is still far from the type of low reading that would imply true capitulation: Crypto Fear and Greed (Alternative.me) Historically, the lows aren't in for digital assets until the 'fear and greed' index is closer to single digits. Bad sentiment, which Bitcoin clearly has, can indeed be a good time to take the contrarian viewpoint. Bitcoin has historically been viewed as an asset for a 'retail investor' crowd that can be faded at the extremes. That said, I actually don't think this sentiment is as bad as it can get yet. While it's an important thing to consider, bad sentiment like we're seeing with Bitcoin often has to get worse before it can get better. Closing Summary If BTC can actually retake the 50-day MA at $90k, the next level I'd watch is the 100-day moving average. As of article submission, that level is $95k. I don't hate the idea of playing a swing trade in BITX on a break over the 50. I am not personally anticipating that, but it could certainly happen. There is also a case to be made that profit from any pause in the metals trade could find its way to Bitcoin. Gold is within striking distance of $5,000 per ounce and Silver is breathing down $100 per ounce. Each of which are big round numbers that could produce profit-taking. Those profits could find their way to Bitcoin. But I'd be very careful taking any shots on BITX until there is a clear breakout over $90k. Personally, I'd rather play BITX following a true capitulation washout under $80k.
