- Bitcoin price is consolidating on below-average volume.
- The new offering by Morgan Stanley could see BTC advance further.
- BTC slow embrace by the financial services industry is market bullish.
Bitcoin price is set to close March with the 6th consecutive positive month despite the quick retracement from all-time highs. The current momentum indicates that the bullish precedent will continue beyond March.
Morgan Stanley announces BTC is an investable asset class
Morgan Stanley announced to its financial advisors that wealth management clients will have access to BTC funds but limited to 2.5% of their total net worth. The announcement comes more than one month after Bloomberg News reported that Counterpoint Global, a unit of Morgan Stanley Investment Management, was evaluating whether to invest in Bitcoin.
The funds on offer to clients are run by Galaxy Digital, a firm founded by Mike Novogratz, and a third fund run by asset manager FS Investments and Bitcoin company NYDIG.
This is another example of Wall Street’s shifting perception of Bitcoin, going from outright rejection to gradual adoption. BTC is now formally defined by Morgan Stanley as an investable asset class that can provide portfolio diversification because it has the regulatory framework, liquidity, and growing investor interest.
"For speculative investment opportunities to rise to the level of an investable asset class that can play a role in diversified investment portfolios requires transformational progress on both the supply and demand sides. With cryptocurrency, we think that threshold is being reached. A firming regulatory framework, deepening liquidity, availability of products and growing investor interest—especially among institutional investors—have coalesced."
Morgan Stanley stated it would not commit to recommending any particular cryptocurrency and that their wealthier clients should get educated on getting exposure and limit their Bitcoin investing to publicly traded products.
Bitcoin price trend will benefit long-term from deepening liquidity
For the second day in a row, BTC rebounds from the extended neckline of the head-and-shoulders bottom at $54,000. The support area also aligns with the rising trendline beginning February 28.
A continuation of the consolidation is expected in the near term, but a daily close above the February 21 high at $58,367 will confirm the consolidation is complete, and Bitcoin price will resume the rally into new highs.
Short-term resistance for the rally will materialize around the 1.382 and 1.618 extension levels of the February decline at $64,230 and $67,850, respectively. The more bullish projection has BTC reaching the 2.618 extension level at $83,204. It would be a gain of over 40% from current price levels.
Note, the rally needs to be confirmed by the Relative Strength Index (RSI).
BTC/USD daily chart
Critical to the bullish forecast is Bitcoin price holding the neckline on a daily closing basis. If the bellwether cryptocurrency slices through this level, it projects a swift decline to the 50-day simple moving average (SMA) at $47,546 followed by a test of the January 8 high at $41,986.