Transcription
Hey folks, welcome to verified investing.com. My name is Gareth Soloway, chief market strategist here.
Now, in today's video, we're going to deep dive into crypto. We saw silver crash on Friday. Now, this weekend, crypto is collapsing. The only asset left not to drop yet significantly is the stock market. I'm not going to cover that in this video. We're going to look more at crypto and Bitcoin, Ethereum, Salana, and other altcoins. But I'll tell you this, one's gone, two's gone. Just waiting on number three. The markets are hanging on by a cliff on the stock market side. I think within a week, we are seeing massive downside there as well.
But where is Bitcoin going? How low is it going to go? Let's dive into the charts. All right, here's your Bitcoin chart. Take a look. Down 5% today, almost or over $4,000 drop on Bitcoin. And this was really something I choreographed literally weeks ago, right? We talked about we had this beautiful bare flag. And if we connect these lows, look at how perfect this is, right? So on Bitcoin, you have this low, then you connected to that low, and then look at how price broke, and then it tried to recapture. It tried to push back above, and it couldn't. And then you got another red close and a confirming candle, and then it tried one more time to fight back and it still couldn't do it. And this is one of those things in technical analysis that we all have to understand. It's called path of least resistance. And it's something we all do in our own life, right? When something's hard, we look for an alternative. We oftentimes choose a different path. Charts do the same thing. Why? Because it's based on human psychology. Always remember that, guys. So, the point being path of least resistance, it couldn't get through this line. What happens? Price takes a nose dive. Bitcoin dropping from over $90,500 to now $80,000. In fact, we did pierce $80,000 here.
Now, this is the kicker, guys. So number one, this is you might hear me say, well, this was a bare flag and this is how I knew that this was the likely outcome, right? And the answer is very simple, right? So this is your bare flag formation. You had this bigger drop and this was all inside bar consolidation. That's classic bare flag formation. If you know technical analysis, even the basics of technical analysis, the other thing to just point out is I called the high in October of 2021. And I just want to remind you guys about this because going back everyone's like, "Oh yeah, Bitcoin topped." But the way I was able to do this because remember in October everyone was telling me, heck, even Tom Lee was calling for $250,000 Bitcoin by year end. Obviously, that didn't happen. But look at the beauty of this trend line. I mean, how amazing is this? You have your 2017 high connected to your highest point there. Notice, no, this second high doesn't touch the line. This is the one that touches the line. And then look, hits rejected. Hits rejected. Hits rejected. What did we just talk about? Path of least resistance. You can see it occurring right here, right? Hits rejected. Comes back up. Hits rejected. Hits third times the charm. Can't get through. What does that mean? Price drops. And then you get the same thing, the bare flag to form right here. This is incredible stuff. I mean, this is literally a master class in technical analysis, folks, in understanding the basics of it. And the basics are all you need. Just understand trend lines, resistance, and support, flag patterns, topping tails, like the basics of it. And all of a sudden, you go from someone who's guessing, who's getting caught with the FOMO, the FUD, the fear, the greed, all of these things. And all of a sudden, you say, "Wait a minute. No, the chart's telling me this, but all of social media is telling me this. Maybe I need to step back and go with the charts. Not that the charts are always right. The charts are just a majority of the time, right?
All right. So, that's the key, guys. Now, Bitcoin has dropped here and this is the next factor, right? So, number one, this low we are breaching. Now, we have to see, do we have a daily close with confirmation below this low? If we do, you know where we're headed. Our next spot is going to be right here at $74,500 to $75,000. It's your pivot there. Do I think we'll get a bounce there? The answer is yes. Do I think it's a bottom? The answer is no. Why not? Well, because ultimately this is not a retrace of significance, right? I mean, yes, it's a pivot low here, but really you're probably going in to test all of these levels. And there's something that I was looking at in terms of charting, right? When you zoom out and we go back to the 2017 high, bull market high of 2017, here's the bull market high of 2021, right? If we take a look at after this, look at this guys. So here we had our high zone right of 2017. We had our bull market breakout retrace up and then look at where we came back to. We basically got here and think about this guys. So this high was about $20,000. We came back to about $16,000. So essentially we pierced the high by about 25%. And so what you're really looking at here is you're saying to yourself, okay, well, if that math works, then shouldn't this zone be good support, right? Because here's your high at $69,000. And I guess the question would be is what would be a 20% drawdown of that same or 25% draw down from that high? And again, we could see here, um, let's see, we would go down. Actually, that could bring us to about $50,000 there. But ultimately I am going to start buying here because what we can see is that essentially you pierced so here this high from 2017 as you came in you pierce that high and that's kind of where the bottom like looking back don't we all wish we loaded the boat right down here right and so essentially what we're looking at is we're looking at a cycle that is going to take us back into this zone here and that's right in this range so essentially sub $70,000 and Listen, does do I think this is going to be the ultimate low? No. But this could be a good for me. And I can only speak for myself, guys. I can only speak for myself. This would be an accumulation zone where I start buying Bitcoin. And then, of course, I'll leave room to dollar cost average because I'm that's what I do. I've learned that I'm horrible at picking exact to the penny lows or highs, but I can get the general range down. And really, if you can get the general range down and you dollar cost average, the math works out, right? Because you bring your average down as it goes lower and then when you get the bull move you make a lot of money. Okay, so that's kind of the thought process here.
Now I do want to talk about a worst case scenario here and there is a cause for concern. Now the worst case scenario here and again I'm by no means saying I subscribe to this but as a technician I must look at the worst case scenario all the time. All the time, right? And I have to be aware of it just like I have to be aware of the best case scenario. Right? So in terms of worst case scenario, we have a pattern called a head and shoulders on Bitcoin. And if you can calculate out that target and the only way this would occur or this would hit would be if the stock market has a major decline. And I'm talking about 20 to 30% minimum decline on the stock market. If that happens, then Bitcoin's probably going to achieve this target. Let's take a look here and I'm going to show you what I mean. So the pattern formation and I'm going to take away this line and even right here. Let's get rid of Let's get rid of all of this. Even this trend line up here, you guys, I already talked you guys through it. The pattern is pretty simple. Shoulder, head, and shoulder. And the neckline is connecting the armpit right here. And now the trigger is when you break below the neckline. And that's been triggered. Now, how do we calculate the target? What we do is we take the highest point, which was the October high, and we drop a plum line straight down to the neckline. What we do is wherever we break the neckline to the downside, you look for what's called a measured move. And that gives you a target. And if this did play out to target, you're looking at about a $35 to $36,000 price target on Bitcoin. And by the way, what's kind of freaky about that is look at this, guys. What's the average decline in past bare markets? What? 70 to 80%. And look, look at that. So, if we look at this, look, last decline was 77%, this would be about 72%. Now, again, I want to strongly rebut that I am showing you the worst case scenario in my mind, like the worst of all worst case scenarios for Bitcoin. All right? At least that I see. I don't think there if I thought it was going there, I wouldn't buy until it got there, right? Um, but it's my job to look at all angles and I think that's important.
All right, I don't want to skip here and not do a couple altcoins. We'll look at ETH here. ETH, guys, I've talked about this already. This has been a target zone of where I have said it's going. Where will I be a buyer? So, right off the bat, look at this trend line. Pivot low hits here, hits here. Same thing. Broke below, tried to get above it, even closed above it, never reconfirmed above. That's the problem. And rejected. Look at this drop from basically $3,000 down to $2,300. Um, I still think it's going to go a little bit lower. My first buy level as a swing trade will be right here around $2100. Pivot low and pivot high right there. That's my target right here. And that's just a short-term target. I don't have a worst case scenario. I'll do that in a secondary video at some point.
And then if we look at Salana here, Salana is cratering, even breaking this. Look at this pivot low here from January of 2024. Pivot low April 2025. And we've now broken that trend line, which tells us we're likely going to pierce $100, which will give us a double bottom. I will swing trade it and accumulate down here. Do I think that's the ultimate bottom? I don't know. A lot depends on what ends up happening there.
And then lastly, as always, XRP, guys. Let's take a look at XRP. This is not good for XRP, guys. This was huge support on XRP. Huge support and look at what just happened. Now listen, we haven't confirmed a breakdown here, but this is not what you wanted to see because look, there's a huge air pocket here. Now, there will be a little support here around $0.140, then even around $0.110, but this is not what we wanted to see on XRP, guys. If you're a fan of XRP, you did not want it to break below. Look at how long it's held this support level going all the way back to basically February of 2025. And look at hits, hits, hits, hits, hits, hits, and now it's breaking. That's not good. Just like it's not good for Bitcoin. Uh, Bitcoin likely headed lower.
So, listen, it is not looking good for crypto right now. And listen, it doesn't look good for silver after the correction. Granted, silver, it's only back to where it was trading like a few weeks ago, right? So, not the end of the world. But the anytime an asset loses 30% in a day, that's never a good thing. That doesn't that doesn't breed confidence. There's a lot of bag holders that if it bounces are going to sell into that. And then the stock market, and I'll do another video on the stock market. The stock market is arguably if you compare crypto and then the run in silver. Silver became an altcoin or a memecoin. And again, I love silver. I love silver long term, but it got way ahead of its skis in that s this situation. Um, but the last asset that has not collapsed significantly is the stock market. Watch out this coming week. This is last this is the last week. If it can't rally and break out on this next week, and I'll do another video on this, we're likely headed for a 10 to 20% correction. I hate to say it, but I think at minimum 10%. If we get 20 to 30, like I said, now you're talking about Bitcoin going way, way lower.
I'm going to keep you posted. Thank you so much for tuning in. Please share with friends and family. That's all I ask. And I'll continue to deliver the best analysis, technical analysis basis out there. Take care.