Transcription
Hello, good day everyone. I hope you are doing well. Today, a market review, things are moving quite a bit in crypto. On my end, I've taken some measures. I will share that with you in detail. As usual, I am 100% transparent with you. So, we will look at Bitcoin, Ether, the altcoins, the US market which is in the process of of market correction. We have gold which is also making an ATH. We have quite a few points to discuss today.
So, Bitcoin which is falling, a bit like all markets, risk assets which are also falling. This is following economic and geopolitical instability, notably with Donald Trump still related to tariffs, and also related to Greenland. It's a phase of uncertainty. The market does not like uncertainty. So that's why it's experiencing this kind of phase. And then the market is, well, we had seen it, there was one that was lying, between gold, the dollar index, bonds, the S&P 500, everything was going up and it couldn't last indefinitely. And well, in the end, we have our answer. It's the S&P 500 that was going up. We had seen it a bit together. In any case, if we had to bet on one of all that, there was more chance it would be the S&P 500 for the month, and it is currently structuring a market top here. So we will see all that in detail. I will start before Bitcoin, of course.
We are here, similarly, in a phase where we are re-entering. I have reduced my exposure on my end because this is absolutely not a pattern that I wanted to see on Bitcoin, which reminds me of 2022. We had seen, for me, the assumption of doing the same thing, that is to say a reversal structure, a break followed by a re-entry, and here we could be in exactly the same pattern: a reversal structure, a break, and a re-entry. So I have reduced my exposure. What you need to know is that I have three zones that interest me in the long term on Bitcoin. The two big zones are here. I had a partial zone at $86,000. I had increased my exposure in this zone by simply buying Bitcoin in spot. Why? Because I estimated that it was an interesting level and it can still be, to see what the market offers us. Why? Because it's the 0.382 Fibonacci retracement. So an interesting level to increase one's exposure. Now, with what the market is doing here, this re-entry, I have reduced my exposure to around $91,000. So yes, we can say that it's a small gain of about 5% to 6%. Now, when I enter on spot, it's not to aim for 6%. Well, it's always something. But I prefer to reduce my exposure. Currently, I am at 45/55. So 45% crypto, 55% cash. So I have a lot of cash set aside, some of which is in staking, some of which can be ready to be deployed in case the market drops quite a bit. And I am simply preparing for what's next, like the work we did: these levels on the weekly are levels we established a long time ago and they are fixed. I will not constantly change my plan in the long term. We adapt, of course, based on what the market does. That's what I did here. Basically, initially, $86,000 was not a zone that interested me. I was aiming lower, but I had to readjust my plan because I had somewhat neglected this level which could have been interesting.
Okay. 0.382 is also a point of interest from a price action perspective, an imbalance zone. So, it can be a level to re-expose oneself, but with a small amount. That is to say, I don't have the same amount here as I have here as the one I put at $86,000. Now, you simply have to prepare for what's next. We are in a complicated market phase here. I have often said that it's not the best in technical analysis who will succeed here, but it's the one who has a plan, a strategy, and above all risk management, and who also has cash on hand. In any case, who has the ability to recover cash, who above all has a strategy that allows them to say, "Okay, if we re-enter, what do I do? If we push upwards, what do I do?" People who are 100% crypto will be the ones who suffer the most in case of a retracement. Similarly, I'm not saying we're going to retrace to these levels. However, these are levels in case we come back to position ourselves, or rather, come back to reach this level. On my end, I would look to position myself very quickly. Why are these levels interesting to me? First, this level is the 0.5 retracement. It's especially the level from a price action perspective before $70,000. From a confluence perspective, we also have a good zone of interest here. Okay? And on the monthly, it's especially the previous low here where we could maintain higher lows and higher highs on the monthly. We see them well here, they are there. So we could make a higher low than the previous one as long as we don't start settling below this level. So that's already a point of interest. We can expect a buying reaction, and we would be around a -40%. This doesn't necessarily mean we've bottomed out; it's not because we've gone down a lot that we won't go lower, but it would start to be interesting. And the second zone is $53,000. Why? Because I simply have my long-term reload zone at 0.18 Fibo. Generally, for the very long term, I like to position myself in reload zones, and I also have the production cost of Bitcoin which is around this zone. This means it's the zone where we reach the floor price for miners. I remind you that miners exchange electricity for BTC, and they can sell at a loss if the cost price of Bitcoin is too low, because electricity automatically has a cost, and if this cost is higher than the resale of the Bitcoin they mine, then these are miners selling at a loss, and these are often bottom levels. I'm not saying we'll reach these levels, I'm just saying you need to prepare, have a plan, and I recommend you keep cash for much lower levels because if the timing holds true, and we could be in a phase where we respect the timing, I need to update this chart because it's no longer updated, it stops here in August/September, but we had seen it together, it's something we had drawn at one point, and if the timing holds true, and for now this timing is totally respected. Why? Because historically, looking at the last cycles, the market top is reached 17 months after the halving and 35 months after the lowest point. Here, 35 months and 17 months give us a market top, and here 35 months and 17 months give us a top for September/October. The market top on Bitcoin was globally achieved in September/October. So for now, the timing is respected, if we assume it's a market top, at least for now, it's really heading towards a market top. So ultimately, this cyclicity repeats. If we go all the way, the bottom is generally set 12 months after the top. So globally, we can expect, if the same cyclicity occurs, again, these are stats over two or three cycles, so it's difficult to project, but for now, it's working. We can expect a market bottom around September/October 2026.
So, in any case, as I said again, if this cyclicity occurs. So, to be followed, but it means we could still experience a downward movement here until we find a sideways phase like we had. Now, prepare cash, prepare your cash, especially prepare entry zones, and have a plan. Whether we are in an upward or downward dynamic, you must know what to do, at which point of interest, in which zone, how much, etc., etc. It doesn't matter the asset we take, Bitcoin, Ether, or other altcoins. So, so that's it, I had told you, on my end, my plan was clear. I had told you if we start to re-enter, go below the value high, come back below $90,000, etc., then I'm out. Why? Because I don't want to remain exposed in a market that gives us a false breakout and nothing else, and as I say, it's not a trauma, but I think about it a lot. It's this pattern from 2022 that we are potentially reproducing here. Well, not exactly, the range lasted a bit longer, but in any case, here we are well on our way for now to reach the lower end. And then the US market doesn't help. The geopolitical and economic context doesn't help much. So, so that's it. In any case, for now, Bitcoin is not going north, and it's better to have cash on hand.
On the short term, what does BTC look like? We have clearly entered a downward dynamic here, we have gone below all the moving averages. So, it's interesting to look for shorts in the direction of the trend. We quickly set a bottom here at the weekly pivot point, to see if it holds. For now, we are in a downward trend, so I will rather look for shorts at resistances than longs at supports. It's the 3-minute tunnel that holds the trend here. Often, after a strong dump, a good drop, the first pullbacks in the 3-minute tunnel are opportunities to take shorts. Then we can stay in this downward dynamic until we reach the lower end of $84,000. So for those who do trend following, we are also in a good zone here to look for shorts. Because all that we saw in this upward trend, and in this upward trend, I was able to take longs whether it was BTC, Ether, or others, but we can do the same here in a downward trend because there is a good downward flow. It's not like this downward trend, you see the flow here is not particularly interesting since the 1-hour is still oriented upwards. We don't have a convergence of timeframes. Here we have a real convergence of timeframes: the 3-minute below the 15-minute, below the 1-hour, and we are crossing the 4-hour downwards. And for trend continuation, that's pretty good. So that's it for BTC. When I also looked at the order flow, it's not great. Well, we had already seen it, there was an absorption, quite a few market buys were absorbed. And we see that at this level, at the break level, we have a significant drop in the CVD. This shows us that market sells are pushing, and we don't have a lot of long liquidations, and above all, we have a strong increase in open interest. What does an increase in open interest mean? It means opening positions. We have here in this whole zone positions that have been opened. Open positions include longs as well as shorts. But since we are in a downward trend, longs, well, they simply serve as fuel because it will create downward liquidation. This is where we can simply have long squeezes, and shorts show us that shorts are still present. It's like when we are in an upward dynamic and open interest is rising, well, that's a rather bullish signal. However, when we reach levels where open interest starts to decrease, like here, well, we can clearly see that it indicates, "Okay, attention, buyers are no longer pushing, these are potentially position closures," and it shows us that there are no longer any buyers pushing, and momentum is weakening.
So, at what point can we potentially talk about a bottom? Now, I'm talking about the short term, I'm not talking about a long-term bottom, but it will be when we have an open interest that is rather low or continues to decrease, or is neutral. This will simply show us that sellers are no longer pushing significantly, and it could be either position closures, shorters taking positions, or it could be a big drop with long liquidations, as we saw at this level, after which we can form a short-term bottom. Again, it's not necessarily to go to the moon, but for now, we are in a context where sellers are simply pushing.
So for BTC, and Ether, well, it's rejecting at its upper extremity. We shouldn't have gotten excited here at the resistance on Ether. We had seen that together, that it was weaker and less interesting to trade. Since it hadn't broken its range upwards. In the end, what do we do? Well, we are globally coming back to the middle of the range. We are strongly breaking this low. This shows us that we are reversing our dynamic, a dynamic that was upward since we had made a W structure, higher lows and higher highs. Now, we are breaking this level. We could very well pull back to turn this into a downward trend with lower lows and lower highs. But a rejection at the upper extremity still has significant probabilities of reaching the opposite extremity. Take your volume profile here, look at the value area high, we are re-entering the value area high. We have two levels to watch after the POC and the value area, and for now, we have reached the POC. If we don't react, it will be to reach the value area low. So, similarly, Ether is globally weak. Similarly, in a dynamic that is downward, with even stronger momentum than on BTC. 3 minutes below 15 minutes, 15 minutes below 1 hour. We again have a convergence of timeframes. So, rather in a context where we will look for shorts, with good risk management, of course. It's not because we are in a downward dynamic that it's 100% certain that it will continue to fall. Be careful not to get frustrated. Be careful not to overtrade. Some people have taken stop losses, some people see their spot capital decrease a bit automatically with the current drop. Don't start telling yourself, "That's it, I'm shorting with x100 leverage, I want to make it back," etc. No, that's a mistake, and the market will punish you. If you start taking positions without a strategy, without prior training, or anything else, the market will just crush you. And it's not because you take a TP or a second TP that it will work. On the contrary, it's very dangerous because a beginner who wins will associate the fact that they are making winning trades with being good. That's just the factor of luck. And that's where they will increase their risk. They will consider themselves superhuman because they associate "Okay, I won, so it's good, it works, I can do it, I'm good." No, it's just the factor of luck. If you've won two or three trades, it means absolutely nothing. And that's where mistakes can be made. So, similarly, on Ether, we are cautious. For now, we are consolidating at the psychological level of $3,000. We can have a rebound. These are always key levels: $3,000, $4,000, $3,500, etc. Generally, we can have buying or selling reactions depending on whether we are above or below.
Regarding altcoins, well, I have closed the trades that I had shown you. ICP, I closed slightly above my break-even. I had set this trade to BE and well, I closed it slightly above because I didn't want to keep this trade open with Bitcoin re-entering, with everything that's happening. So, well, a very small gain here, about 0.35 RR, I think. So, a very small gain, considering fees and everything. Plus the position on Optimism, which I also closed slightly above my stop loss. I closed it this morning, I don't have the exact figure, but given the market, I'm exiting 100%, I'm taking a small loss when I combine Optimism and ICP, I'm taking a small loss. Anyway, the risk was not high on that side. And well, I'm entering these in my trading journal, they have been entered. We move on. I have no more trades open. I'm not going to start telling myself, "That's it, I took almost a BE here, a stop loss here, I have to move on, I'm bad." No, we cut losses, and that simply allows us to move on and not turn small losses into big losses. And when it goes, it goes. When it doesn't go, too bad, we move on. I might potentially take another trade if I get new signals that are quite good. For now, that's not the case. And given the market, I prefer to have cash and wait for clearer signals. And I know that given the market, I will mainly do intraday trading. If the market continues like this, I will mainly do intraday shorts. And to take longs on swing, I will wait for a new consolidation with a breakout. I won't take swings on ICP, it's complicated to take a short when we are still close to a support level. So that's it for these two trades that we had open.
Regarding the US market, it's not great. Okay, it's really, really not great. We are opening the week here with a bearish gap. We are going below quite significant levels. If I switch to 4-hour or 12-hour. Ah, there is a level here. To be more positive than the S&P 500, we would say, "Okay, we are re-entering," it would be to get back above this level. So that would be a rather encouraging signal if the S&P 500 could re-enter 6915. Okay, that would be a rather good signal. For now, that's not the case. We are below this level. We have lost the short-term moving averages here. Hop, we went below the 15-minute, below the 1-hour, below the 4-hour. So, yeah, what the S&P 500 is offering us is not great. In any case, it's not reassuring for cryptos, where we have rediscovered this correlation: when the S&P 500 falls, cryptos fall. So we see that we are in the risk-on category for both assets. At one point, we were rather in a de-correlation phase where when one pumped, the other dumped, and vice versa. So, the market has rebalanced, everything is not pumping anymore as we might have seen at one point, which is not a bad thing to have a market that functions this way. So the S&P 500 is potentially making a market top, forming a market top. In any case, when I see the phase, it's quite a good pump from April to now, it wouldn't be surprising to have a phase where the market retraces. We've had about more than 6 to 8 months of gains here, a +44% on the S&P 500, which is not insignificant. So it wouldn't be surprising to see an S&P 500 retrace in the coming weeks or months. To what extent can we place a Fibonacci? Honestly, there is a good zone where if we look for good confluence, you see here a -12% at the 0.382 Fibonacci retracement from the first ATH, here we have a good confluence of levels. Then, at an intermediate level, we have the daily tunnel in confluence with this zone from a price action perspective, which is a point of interest. But the first zone, in any case, that I would look at in the medium to long term, is the 0.382. Then, if we really want to wait for a bigger bottom to form, well, the 3-day tunnel is always a good point of interest. Then, we have the long-term reload zone for this movement between 0.8 and 0.786, where we would be around a -20%. And well, we would have to go below this low, otherwise we would have a long-term dynamic inversion. It's quite rare for the S&P 500 to go below a major low like this. And if we note the important lows, we have a low here, a low here, a low here, a low here. Well, this is the COVID crash, we did go below it, but we didn't settle there. We have a low here and a low here. There has never been a phase where we go below a significant low. Or else we would have to go back to this zone where we had a big consolidation phase for years. So, well, we will have to monitor the pullbacks. I'm not saying that's what will happen for now. We are still in a trend that is rather bullish, but with exhaustion and with signs that indicate to me that it's better to be cautious about risk assets, have cash, and have more interesting signals.
Gold continues to make ATH after ATH, which shows us that investors are protecting themselves, investors are entering gold, which is a safe haven. Generally, when gold pumps, it's not good for risk assets. It shows us that we have a bearish sentiment on risk assets, and we want to protect ourselves. So, automatically, there are capital rotations that will occur between very risky assets like cryptos, risky but less risky assets like stocks. Then, we have indices that are even less risky than stocks, which will simply be the S&P 500, Nasdaq, etc., but which remain riskier than gold. So this can show us that capital rotations have been happening for a while. It's just that we've had a good confluence, which is quite rare to have this kind of phase where gold pumps and the S&P 500 pumps. It can happen, but historically it's rather rare. Generally, there are phases of de-correlation, not 100% of course, but in the long term. In any case, it's a warning sign, or one should be wary when gold sends us this type of signal. So, well, on my end, I would be rather cautious on this side, and whether it's Bitcoin, Ether, altcoins, etc., especially altcoins. I told you, altcoins currently, Bitcoin and Ether are a bit hyper liquid, but I'm still waiting to position myself. I'm waiting, and I don't like what I see currently. I have cash on hand. I'm ready to enter much lower. The question is asked, why don't you sell everything? Why do you remain 45% exposed to crypto? The advantage is that in this 45%, it's mostly Bitcoin that I accumulated at low levels, which I don't want to sell because I don't want to be 100% unexposed, and even less on Bitcoin and Ether. I have an average price around $1,700, approximately, and I have taken profits. I could reduce my exposure to Ether. That's true. That's true, to potentially buy back lower. But in any case, I won't go below 35% exposure. So I could still reduce by 10%, but I know I won't go below 35-30% exposure. It's not like I'm fully in altcoins or Bitcoin is not interesting right now. If I were fully in altcoins, I would have said yes, I'm going to go to 10-15% because it's too volatile, it's not interesting. Now, I'm still on Bitcoin and Ether, and I accept to take a drawdown on my portfolio, and in this capital, I'm not even counting the trading capital I have on hand. So, that's it from my end, we've covered everything. It's certainly a very rich day in crypto. Prepare yourselves for what's next.
Okay, this is really important. It's a phrase I like to say, but when you're in a bit of a mess, I'm not saying that's the case here, but if you are, don't look for a miracle solution because it often doesn't exist and you'll never find it. If you find it, it will probably be luck. Okay? Or actually, someone says, "Nico, I'm 100% crypto, what do I do?" Either I sell everything, or I stay like this. Well, if you sell everything and we do this, you're in trouble. If you stay like this and we do this, you're also in trouble. So there's no miracle solution. The question you should ask yourself is, what actions did you take that led you to this current situation, and what can you do next time to avoid finding yourself in this situation again? For me, this is a mentality that is hard to adopt because it's a bit like saying, "Okay, well, right now, I can't do much and I'm taking it," but it's looking ahead for the future, for 3, 6, 1 month, 3 months, 6 months, 1 year, 2, 3 years, etc., to not find yourself in this situation again. If you adopt this mentality, yes, you might take a hit right now, but it will be the last time you take a hit. I'll leave you with that. I wish you a very good evening and I'll see you tomorrow for another video. Bye bye.