Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin, and we're going to discuss bare market structures.
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So, in this video, what I'd like to do is generally talk about a bare market structure versus what we saw this past cycle in the bull market. One of the reasons why bare markets are so challenging to navigate is that a lot of times, Bitcoin spends a lot more time going up in bare markets than going down. Now, that might seem counterintuitive, but when you think about it, for months at a time, the price of Bitcoin will generally trend higher, and then for like a week or two, it'll capitulate to a new low. And during that time, there's a lot of people panicking, and the people that have been bullish since the top will keep telling you to buy the dips. It keeps dipping, and then eventually, you form a low that then holds as the low for a while until it doesn't.
And so, in bare markets, what you'll notice is that a lot of times, Bitcoin will spend more time generally trending higher than trending lower. Think about the low that Bitcoin set on November 21st. Think about that low. Now, what you'll notice is how Bitcoin generally trended up for a couple of months, right? It ended up putting in a local high on January 14th. But when you think about when the low was set, so when the high was set, Bitcoin was trending up for about 54 days before it fell off and then broke down. Now, think about how long Bitcoin dropped before setting the new low. It only dropped for 23 days. So, in this area, Bitcoin went up about twice as long, more than twice as long, then it went down. You see that in terms of where the lows were. So, you had a low, you generally trended up for two months. I'm not saying every day was a higher high. Okay, I'm saying that the market was putting in higher lows for two months almost, and then it dropped down. So, you spend two months going higher, and everyone that was bullish at 120K will then call for the super cycle and say that this is a bull market, and then it's not, right? And the bull market is in fact over, and they just don't want to believe it. And then what happens is Bitcoin then breaks down. And when it breaks down, they get quiet, right? And they start, you know, they get quiet because they know they were wrong. And then when another low is set, they then start the price cheerleading again, which is difficult for a lot of people.
And what I would tell a lot of people here watching is, and I've said this many times, there's two different types of people out there when it comes to Bitcoin price action. There's people that actually try to analyze the markets. Not that those people are always right. Anyone is going to get things wrong all the time. There's people that try to analyze the markets and manage risk. And then there's price cheerleaders. And price cheerleaders are always bullish, no matter what. Now, you could argue that being a macro perma-bull is better than being a perma-bear. There is nothing wrong with being a price cheerleader. I myself, at times, just fall into that category. You know, if you buy Bitcoin in the depths of the bare market and you come out of it, it's okay to just cheerlead the price for a while. Where it becomes difficult is the people that don't really pivot when the bare market arrives because then a lot of people sort of take their price cheerleading as market analysis or risk management when all they would ever do is bull.
Okay. Now, is it true that Bitcoin has generally trended higher for years and years and years? Absolutely, right? Absolutely. So, there's nothing necessarily wrong with being a perma-bull. But one problem is when you look at the price of Bitcoin against gold, it's at the same valuation today that it was in 2017. So, you'll have people that will say you should never trade it or that you should just hold it and never sell your Bitcoin and whatnot. And I'm not suggesting that you need to go panic sell now. Certainly not after Bitcoin has dropped 50, 60%, or 53% or so. But the point is, you know, selling if you sold Bitcoin at the end of post-halving years was better than just holding it and realizing that you broke even compared to gold if you bought Bitcoin in 2017. Now, that's a crazy thing because that was almost a decade ago. Think about that. Bitcoin is at the same price today against gold that it was in 2017. So, you're talking about a decade because it's 2026 now, a decade, and the price of Bitcoin hasn't really gone anywhere with respect to gold. And so that is at least some justification for not just saying that assets always just go up and to the right on their USD pairs. A lot of them do, but when measured against other things, they don't always necessarily do that.
Okay. So again, there's a difference between a price cheerleader and someone trying to manage risk. Now look at this. Look at the bare market structure. You see how it was trending up? You set a low at 80K, and then the market trended up for two months basically before breaking down. And where did it find support? 60K. And guess what's been happening since 60K? Bitcoin generally trending up. You see that same structure? Bottom at 80, trended up. Bottomed at 60, trending up. But it will likely break down. That's my guess. My guess is that this will eventually break down within the next couple of months. Usually, you'll find the next area, the window of weakness for Bitcoin in midterm years is around that April, late March, April time frame. So now you see the bare market structure, higher lows, and then you quickly capitulate to a new low. So then the bears don't even really feel like they're right. A lot of the times, they're right for like a week or two, and then the market trends up for a while, and they're right for a week or two, and then the market turns up. But then you look back and you realize, oh well, the whole thing was a bare market. You just couldn't convince people of that in the bare market. They were always convinced of another narrative. Whether it be Jane Street, whether it be the ISM, whether it be whatever, the price of oil, the labor market, there's always something.
Now, compare that, compare this structure to the bull market structure, and look how it's the polar opposite. In the bull market, Bitcoin was trending down for a lot of the time. You see that? You see how Bitcoin would generally trend down? Isn't it fascinating how Bitcoin did that back then and it does the reverse today? So in the bare market, sorry, in the bull market, Bitcoin would go down and then pop up, and then go down, and then go. See that structure? How it would trend down, and then from those lower lows would go higher, and then it changed. You can see the structure change. Then it would trend up and go down. Trend up and go down. So you can see the difference, right? You see the difference there? How we went from putting in lower lows to the continuation of the bull to higher lows to the continuation of the bear. So to me, this still looks like a bare market structure. Still looks like a bare market structure.
Is it true that at some point we'll put in higher lows and it'll be the end of the bare market? Yeah. Look what happened in 2022, right? You trended up, and then eventually, we started the new trend. And back then, it was similar, right? You would trend up for a while, and then you would break down. You see how it was the same thing? You would trend up and break down. We're doing the same thing. We trend up, we break down. We trend up, we break down. The problem is that February in the midterm year is typically far too early to call a low, right? It would have been like calling the low in February of 2022, or in February of 2018, or in February of 2014. Was it a low? Yeah, it was. But it wasn't the macro low. It was far too early to call for the macro low in February. So that is why I remain bearish on Bitcoin. That is why I continue to fade all these narratives that will pop up. And that is why I think the best course of action for me is to just tune out the price cheerleading and look at this objectively and say, you know what, as much as I would like to see Bitcoin go up, I still own some, but it's not like I don't own any. As much as I would like to see it go up, and as great as that would be to get new people into the space, it's just not the most likely outcome right now.
And I've gotten on Twitter Spaces a lot with people, and they all have their narratives. They're talking about ETF flows. They're talking about institutions. They're talking about all sorts of things. But the harsh reality that I think it's difficult for people to accept is every single one of those narratives was just as relevant five months ago as it is today. And that it still did not stop Bitcoin from dropping 50%. Right? You could have said, "Oh, but the institutions, but the ETFs." You could have said all of that back in October, and Bitcoin still topped out, and Bitcoin still dropped 50%. So, narratives are easy to come by, and a lot of people flip-flop. They'll be bearish when the market goes down. They'll be bullish when the market goes up in the bare market, right? Like there's a lot of guys that I see do that. They'll be bearish in these phases, but the minute that the market starts going up, they'll flip, and then they'll flip back when the new low is set. That doesn't help anyone, right? That's just trading on emotions. A lot of people do that. That doesn't help you at all. So, be aware of that. Be aware of the constant flip-flopping.
It's okay to flip-flop a position, right? Like, it's okay to pivot, but if you flip-flop every week based on the short-term price action, that's how you get wrecked in midterm years. And the name of the game in midterm years is to control the drawdown in your portfolio to survive the midterm year so that you have capital to enjoy in the next bull market. That's what I've fallen into in the past is trying to get too cute, you know, timing counter-trend rallies and then not fully knowing exactly where they happen and why and when. And you know, you could have looked at a lot of these lows and thought they were going to be lows at other levels, right? I mean, look at this. You could have made the argument that 75K could have been an area we bounced, but instead, or 74K, but instead, we went lower, and it's been providing resistance. So perhaps the reason why Bitcoin struggles to get through 75 is because a lot of people bought there and are now, anytime it goes back up, they sell. They just want to get out of their position because they didn't time the counter-trend rally as best they could. Right? Instead of buying at 75K, they should have bought at 60K. But it's so hard to know exactly where things are going to bounce on the way down. So far, it's been 80, 60. Maybe the next one's 40, maybe 50. I don't know. But we'll take it one step at a time.
Thank you guys for tuning in. Subscribe, give the video a thumbs up, and again, check out Into the Cryptoverse Premium at intothecryptoverse.com. I'll see you guys next time. Bye.