Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin, and we're going to be providing an update to the bare market resistance band.
If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and check out the sale on Into the Cryptoverse Premium at intothecryptoverse.com. Let's go ahead and jump in.
So, Bitcoin has rallied for the last week or two, and you can see that it's currently right around $71, $72,000. And so, it might be timely to at least check in, um, as to where the bare market resistance band is. As of now, as of April 8th, the 20-week SMA is at around $78K, $78.5, and the 21-week EMA is around $78.9. So, essentially, the bare market resistance band is around that $78 to $79,000 level.
And the reason we provide updates on where it is is because in bare markets, it does tend to act as resistance, especially near the end of, you know, several month rallies. So, it's just something to keep in mind. Um, it's not like every rally gets us there. In 2022, you know, it's not, you know, you can see there are certainly rallies that we didn't actually get up there. And by the time we hit it, it was at a lower level than where you could have, um, than than before it had tagged it in August 2022. It ended up tagging it, but not until October, but by that point, the 21-week EMA had had dropped down a lot.
Um, you can also see in 2018, sort of tagging that same resistance band multiple times, and there were times where we went above it, right? It's not like you never, we, it's not like we never saw price action of Bitcoin go above the 21-week EMA in bare markets. It did briefly in 2022, in, um, in like March and early April. It did so in February of 2018, and also briefly in July of 2018, as well. Um, and then in 2014, it actually went above it, uh, very briefly in March, and then also again in the June to July timeframe. So, it does sometimes get above it. We will see price sometimes get above it in bare markets, but a lot of the times, you'll just find the 21-week SMA, 20 SMA act as resistance throughout, um, the bare market. Right? You can see that, uh, plenty of times throughout Bitcoin's history.
Now, I do want to draw your attention to a couple of things here. One is, we'll talk a little bit more about the 2019 comparison. Um, but also maybe look a little bit closer at the 2014 comparison, because in the 2014 comparison, there are some similarities to today, but there have been some recent deviations. For instance, one of the similarities between 2014 and 2026 is that we found a low in February. You can see a low in February. Also, the same thing in 2018, and of course, the same similar idea in 2022. We found lows in February, highs in March. All right, you can see that highs in March, and then we then dropped back down into into early April.
Now, we had the window of weakness for Bitcoin going into early April. You can see that Bitcoin dropped back down going into early April, but so far, it at least maintained a higher low, which is something that happens. I mean, like this is what happened in 2018, right? Bitcoin formed a low in February and then formed a higher low in April, got rejected from the bull market support band or bare market resistance band, and then went down and then swept the low that it had put in in February. Okay. Um, in 2022, you know, you had a period of higher lows, and then we got briefly above the bare market resistance span, and then sort of all hell broke loose as we went into the May and, um, and June.
In terms of seasonality, I would say seasonality tends to work about 70% of the time or so. It's not perfect. Uh, if you look at the year-to-date ROI of Bitcoin, it kind of gives you an idea of like, are we generally tracking it, or are things holding up a little bit better? If you compare 2026 to 2014, you can see that, um, we're holding up a little bit better than 2014 as of right now. Uh, if you compare it to 2018, holding up a little bit better than 2018 as a function of time into the midterm year. Uh, but compared to 2022, Bitcoin was actually had a had a not as bad loss at this point in 2022. Uh, you can see it took until like, kind of like late April, early May to get that to get that sort of that drop that Bitcoin had going into the summer months, where essentially the low was set. It only went a little bit lower later on.
But one of the reasons why I wanted to talk about 2014 is because in this case, there was a low set in April, but the next low didn't even occur until October. Right? And I've previously said that October seems like a candidate for a potential low. It doesn't have to be October. It could be May. It could be December, right? Like, it could be all sorts of different months. It's just that October, uh, sort of stood out back then. And I know a lot of people are pushing back on October and and saying, "Well, if everyone thinks it, then it probably won't happen." And there may be some truth to that, right? I'm not, I'm not here to say that it has to be October. It doesn't. But I will say this, the counterpoint to that view is that when we said that Bitcoin would likely top in Q4, the overwhelming response was, "No, it can't do that because everyone is believing in the four-year cycle, therefore we'll have something else happen." And despite all that, Bitcoin topped anyways, right? So, I think that is the counterpoint to it is that, like, sometimes you're just in a bare market. I don't know exactly when the low will be. Um, obviously, some people think it's February. The only, the only real bull case I can find for February being below, um, would be the 2019 comparison, excluding the pandemic-induced recession. Okay.
Now, there's plenty of reasons to exclude the pandemic-induced recession, right? Like, it's not like we expect the unemployment rate to spike to 15% overnight like it did back then. With that said, all the things we had back then are things that have happened this cycle as well. Quantitative tightening came to an end. We had an inverted yield curve that then uninverted. The the labor market was already showing signs of weakness back then as well. The Fed had had lowered interest rates some, but then they weren't willing to continue to lower interest rates. So, it's not like there's no similarities. And in fact, if you look at 2019 and compare it to 2014, there's some similarities there as well, where you essentially set lower highs for a while, and then Bitcoin breaks through it, right? You can see this, like, you'll set lower highs, and then at some point, Bitcoin breaks through. But in both cases, it was a a false breakout. I wouldn't be that surprised if something like that happened this year, where perhaps you have this trend line by Bitcoin, and perhaps at some point, we break through the trend line, and then maybe the low for Bitcoin is when we backtest the trend line, right? Like, you know, if you backtest this trend line in October, that would correspond to the $40 to $50K range. Um, you know, it could do all sorts of things, but I just, I'm throwing out some ideas as to how we've seen it play out in the past. And then there's other times where it basically just goes, uh, you know, straight down without any real major breakouts. And that's kind of what we saw happen in, um, 2022.
So, in terms of the year-to-date ROI of Bitcoin in 2026, if you look at the average of prior midterm years, it's only slightly above where it is on average. And then when you overlay one standard deviation, it's still well within one. It's still within one standard deviation. Close to to no longer being within those bounds, but it's not that far removed from the average of prior, uh, midterm years. So, a lot of times, you'll see Bitcoin weakness going into early into February, and then you'll see it again going into early April, right? You can see that in early April of 2018. Um, you'll see it in early April of 2014. We even got it here going into early April of 2026. 2022 is a little bit different. Um, and when you look at 2022, one of the things you'll notice is is there's kind of a similar pattern, right? And similar geopolitical conflicts going on. In both cases, we had geopolitical conflicts going on. You get a rally, it comes back down, sets a higher low, goes back up to the 21-week MA, and then goes down. So, you have to always wonder, is something like that playing out where perhaps that is the way this ultimately resolves, where it it tags that 21-week EMA?
A lot of this also depends on, you know, things that obviously no one has any ability to predict. You know, to a large extent, the the the news cycle is noise, but certainly there can be short-term reactions to news headlines. Okay. And we saw one of those yesterday, where the stock market had a rally after after the the ceasefire was announced. Now, the hard part when looking at the S&P 500 is, if you compare it to 2022, you know, we dropped down, and we had a couple rallies back up to the bull market support band, but they ultimately faded into lower lows. And are we just simply there?
I will say this, I think it would be longer-term better for Bitcoin to get reject, or sorry, for the S&P to get rejected here and to go down and have a nice digestion phase in 2026, so that we can perhaps continue a longer-term bull market going into say 2027, 2028. If that is not what happens and we end up sweeping the highs, then to me, it's going to look exactly like the prior business cycles of the past, where, you know, you're in a late business cycle environment, you set a high, you get a big drop, and then you go back up and sweep the high, and then the business cycle finally comes to an end. Uh, you can see that happened in 2007-2008. You had a pretty sharp drop-off, and then a rally to a new all-time high, and then the recession began. Uh, the same thing happened in in 2000, where you set an all-time high, and then you rallied up, swept it, and then ultimately we went into the recession.
And the reason why I would prefer for it to play out like that is because of this comparison that we've made for the S&P 500 for a while, where, you know, looking at it in terms of, you know, this fractal, which again, as I keep saying, I I do think it will eventually break, but until it does, you might as well follow it. I mean, it it just continues to line up perfectly. So, if the S&P were to, I mean, it could the S&P could even come back down and sweep the low and then still get a rally to a new all-time high. If this were to play out, that would probably actually end up being a lot more bearish. Uh, because you're not really getting, in my opinion, what is needed, a much-needed reset in the market. So, I think it would actually be a lot better if the S&P just kind of did something like this, and then we kind of then started, you know, continued the bull market going into 2027, 2028 timeframe. If the market stays elevated and then sweeps the high, you'll probably get another big sell-off later in the year. And it doesn't have to be like this. Like, I'm not saying it needs to be like the dot-com crash, but it could be like what we saw in 2018 as well, uh, when Trump was president. And in 2018, if you guys remember, um, when you look at the S&P 500 in 2018, the stock market put in a high at the very beginning of the year, and then it had a big drop, and then it rallied up, swept the high, and then had another big drop. So, I think sweeping the high would actually be a lot more bearish than just getting a reset now and then trying to continue on in the bull market.
And the reason I'm talking about this is because it would obviously affect Bitcoin, right? Um, the stock market, if it were to get rejected, would likely correspond to Bitcoin also getting rejected. If the stock market were to rally up to no all-time highs, there's a higher likelihood that then Bitcoin could get even slightly back above the 21-week EMA for a little while, kind of like how it did in 2018, or sorry, in 2022, and how it did briefly in 2018, and also how it did for a couple months in in 2014. So, some of that will, you know, depend on the stock market, at least in my opinion. I know some people would disagree with that. But and then I also, I don't really like talking about this because I I think this trend will break soon. I've been following it for a little while. Uh, but if you look, if you look at the RSI of Bitcoin, um, it's been putting in lower highs on the daily for a while now. And what you'll notice is that all these highs by Bitcoin that have occurred have been under kind of like less and less strength, right? So, you had your first one here in May on this high, and then you had a lower high in July by the RSI while price was printing a higher high, and then you had another lower high on the RSI while Bitcoin printed yet another higher high. And so that was already confirmation that that was going to be at the top because you saw the divergence in price and the strength of the price action. And then the counter-trend rally that Bitcoin had, which got rejected at the 21-week EMA, also corresponded to basically testing that trend line once again. And so we haven't tested it now. I've been sort of watching it for the last couple of months to see if we're going to. I don't know. I mean, we got pretty close to it in March, but then we sold off. And, you know, it's not that far away from it now. I have to imagine that a retest of this trend line would probably correspond to Bitcoin retesting that 21-week EMA.
The problem is, short-term price action is so hard to predict. There's there's also a completely plausible outcome where Bitcoin sells off. Maybe there's some type of fear that the, you know, the conflicts will resume. Maybe it sells off and sweeps a low, then rallies, and then drops, right? Like, it, I can't predict the short-term price action, and I'm not trying to. I'm just trying to give you guys examples of how you sort of mentally think about this stuff. Um, because in my experience, the midterm years for Bitcoin will eat you alive, because what they'll do is, you'll get a big drop in the market. The people that get the memo late, and I I was very vocal about, if you're going to sell, not financial advice, but I was like, look, if you're going to sell crypto, the time to sell it's in Q4. Don't wait until the midterm year, right? The time to sell it is in Q4. A lot of people get the memo late, and then they end up panic selling a low, and then the market punishes them for a couple of months. They FOMO back in, and then it ends up setting a lower high and then going down again. And that's kind of kind of explains kind of the psychology of the market, is that the people that panic sell on these lows, the market then punishes them for a while by just generally trending up. And it's more so a time-based capitulation to the upside and the downside. So the people that panic sell, they're like, "Oh no, the market's going to go off without me." They end up capitulating by buying back in, um, right after some of them probably would have sold the bottom because they were relying more on sort of emotional, uh, investing rather than having a a plan.
I would also draw your attention to the fact that $60K was always going to be an important level, because we can see in a prior cycle, $6K was an important level, right? Not only in 2018, but also in 2019, $6K was an important level, and Bitcoin ultimately found support at $6K in 2018 and in 2019. But in both cases, it still eventually went lower. Even though the way we got there was different. 2018 was just, you know, lower highs and then eventually going straight down. 2019 was a breakout and then a recession, but we still eventually went below it. Um, and so because of where we, if this were if this were like much further along in the midterm year, then I might not be as deterministically, uh, bearish on it. But because we're only in Feb, or because the low we've set so far has only been in February, I think there's still got to be some reason to think, hey, like this might still, uh, there's still plenty of time. There's still more windows of weakness we have to get through. And some of those windows of weakness, you could argue, are like June and August and October.
If you look at the prior Bitcoin bare markets, you'll see that in 2014, the main windows were February, April, uh, October, and then January. 2018, it was February, April, June, and then December. And then 2022, it was early February. Um, and then you sort of had another major low in June, and then another one in, um, November. So, June kind of stands out. But the only counterpoint to June is that in 2014, June ended up being a high rather than a low. And that was the one that I've sort of been eyeballing because I thought that this might be a relevant comparison if Bitcoin did set a lower low in April and maybe helped reset some of the indicators. And some of the indicators that I'm talking about are are things like the supply of Bitcoin in profit or loss, right? Like, normally market cycle bottoms for Bitcoin occur after this metric crosses. If you look at the MVRV Z-score, uh, it market cycle lows tend to occur after this goes below zero, and that hasn't happened yet. If you look at things like the balance price and the realized price of Bitcoin, historically, market cycle lows occur after Bitcoin goes both below the realized price and the balance price. You can see that's what happened in 2011. It's what happened here in 2015. It's what happened in 2018 and in 2020 and in 2022. And it just hasn't happened yet. So, you could have argued if Bitcoin had set a lower low in early April, then perhaps that would have given more, uh, credence to the idea of that being a low that could last longer and and sort of making that comparison to 2014, but because it didn't, it it makes me not as sure about that.
Now, I mentioned earlier that the, you know, someone asked me the other day, like, what are the odds that Bitcoin eventually goes lower? I would still say there like a 70 to 75% chance that Bitcoin eventually goes below the low that has already been set. And the the the counterpoint though, right, because I feel like if you're going to have a view, you have to be able to explain the counter view. And the counter view, the counterpoint, if you want to say that the low is in, is to basically make the 2019 comparison and then say that we will not have any type of contraction at all in the markets in the economy at all, despite the fact, you know, that all the charts show that it is a risk we have to think about. The the business cycle chart shows it, the liquidity risk cycle chart shows it. That's what you have to contend with. And what I mean by that is, if you look at the bare market in 2019 and compare it to the current one, this is around the area we found support at before getting a rally, and then the recession hit. So that's kind of like the the, um, that's the counterpoint. That's the counterpoint is, you know, could it do something like that?
And then when I was looking at 2014, when I was looking at 2014, that's kind of 2014 actually looks like 2019 in this sense, right? It set a low, and then it held that low for a while, rallied up above the bare market resistance band, and then sold off to a new low. You see that? Kind of the same thing happened in 2019. If you think about it, there was a low that was set. We then rallied up above the bare market resistance band, and then we had a sell-off to a new low. So, I wonder, I wonder if that's what what awaits us. And and by the way, you could even have in 2019, when that occurred, Bitcoin actually swept the low first, right? So, in 2019, Bitcoin swept the low that it had set before getting that rally. And that hasn't even happened yet. I'm not saying it has to. I mean, in 20 in 2014, it didn't, right? It had a low and then basically held it, rallied, and then sold off into into, um, October. But I I do think it's important to look at this stuff because in my experience, and I mean, I know, you know, people say all sorts of stuff, but in my experience, midterm years just kind of eat people's portfolios alive because they're unwilling to sort of accept that these things can take place over long periods of time. They're unwilling to accept that you can have counter-trend rallies, and that there are windows of weakness. Sometimes those windows yield lower lows, sometimes they yield double bottoms, sometimes they yield higher lows, but it doesn't mean that there's no more windows of weakness for the rest of the year. If this were October, it'd be a different story, but it's not. And I I still think this is something, um, to to consider, uh, for Bitcoin over the next, um, few months.
So, we'll see if Bitcoin can can tag that bare market resistance band and what it'll sort of the reaction that it might have there. But I I do think for the reasons I mentioned, supply and profit and loss, um, as well as the other indicators that we talked about, the MVRV Z-score, the balance price, the realized price, there's got to be some probability you assign to the low not being in. Okay? I in in my opinion, there's got to be some probability you assign to it. I assign a higher probability to that idea than the low being in. Although I do I I can see, you know, the 2019 comparison could be compelling if you're willing to basically say that we escape this without any type of contraction. And the reason why I'm not so optimistic about that idea is because when you look at the ITC business cycle chart, which again, is the S&P 500 divided by the unemployment rate squared multiplied by US inflation rate year-over-year multiplied by US interest rates normalized by the money supply. All prior late business cycle environments have in fact ended, um, with a contraction, right? Every single one of them where, you know, this started to really, really come back down. The only, you know, the only counterpoint you could say is, well, what if we go back up for a very brief period and then it happens? But I mean, you could argue this has been doing that for years, getting little little rallies back up. There's also this move here in 1966 where you had, uh, a big sell-off by the S&P 500, and then it rallied for a little while, but again, it after the low was set in March '68, we only really marginally went above that later that year before the recession actually arrived. So, I think for me, I'm going to have to look at this and say, look, it's a late business cycle environment. It has to be a consideration that we make that you could in fact see a lower price, uh, by Bitcoin later this year.
And then also, when you look at the liquidity risk dashboard, that also more so looks like a late business cycle environment, kind of like what we saw over here, kind of a more extreme version of 2019, and then also what we saw back in 2006, 2007. And and that's one of the reasons why you're not seeing rotations. It's the reason why you don't see a rotation from gold to stocks, or stocks to Bitcoin, or Bitcoin to altcoins. Instead, it goes altcoins bleed to Bitcoin, Bitcoin bleeds to stocks, and then stocks bleed to gold. And I think that's hard for a lot of people to consider because it's very different than what they know, because what they know is has always been the opposite. They've always seen risk rolling up the curve rather than kind of rolling back down the curve. But that's where we are. And I know you might look at that and say, "Well, no, Ben, you're wrong. Bitcoin dominance hasn't gone anywhere." It's true when you include stablecoins, but when you exclude stablecoins, Bitcoin dominance is still going up, right? Like, it's been moving up since September of 2025, after that drop, it's just that stablecoin dominance has gone up so much. And if you remember stablecoin dominance, when you look at this, this pattern we've seen a thousand times over the last few years. And usually the first major breakout from a range is not the top. You usually get a big breakout, consolidation for a while, and then you get another move up, and then that could be the top. But usually this first one, uh, is not. And so I think you're going to likely see this thing, you know, potentially interact with the 21-week EMA in in the next few weeks, and then perhaps start its next, uh, move up. So, Bitcoin dominance is still going up. Uh, even though you might not see it on TradingView, it's because we're including stablecoins. And you can see stablecoin dominance, at least USDT and USDC, that's gone from around 5% to almost 11% today. So, 6% of that market share has just gone to stablecoins. It's not going to the altcoin market. And you can further verify that just by looking at Total 2 minus USDT divided by Bitcoin and seeing that that's been trending down also since September 2025. And really, it's been trending down since 2022. And one of the reasons it's been trending down since 2022, just like the advanced decline index of the top 100 cryptocurrencies have been trending down since 2021, is because you could argue monetary policy and also just social interest has generally been dropping, um, in the in the cryptocurrency asset class.
So, you know, any, if you're going to hold anything in crypto, Bitcoin, in my opinion, is still a better hold because it, it's, um, a lot of the altcoins, if we are, if you, if you think there's a chance we are in a late business cycle environment, a lot of these altcoins will never come back, right? They just won't. They can have counter-trend rallies. But, I mean, look at them. Even even though Bitcoin is back up to $71K, a lot of these altcoins didn't really rally at all. And look at, um, like, look at Total 3. That's it barely moved. Like, Total 3 is up 1% this week. Altcoins are up 1%. Even though Bitcoin had a much larger rally where it went up three and a half percent. So, Bitcoin dominance is still going up. Bitcoin's moving up quicker than the altcoin market. And then when Bitcoin drops, altcoins tend to drop, um, a bit more.
But those are my views. Hopefully, you guys like the content. Make sure you subscribe. Give the video a thumbs up. If you want more insight, check out the sale at intothecryptoverse.com. I know it's a brutal market. Uh, but remember, there's always a bull market somewhere. And so, one of the ways that I get through these times is not by trying to time every single counter-trend rally, but rather focusing on parts of the market that are in bull markets. And we've talked about those before. Energy, the energy sector has been doing incredibly well. Uh, the manufacturing sector, metals were doing really well at the beginning of the year. They're starting to get a little bit of a renewed bid recently. Although I still think the highs for silver are likely in for the year, as well as some of the other metals. Um, but remember, you can always make money because there's always a bull market somewhere. You just have to know where to look. And that's the reason why I elect not to take part in all these counter-trend rallies. And at the beginning of the year, I said, "Look, we're going to have plenty of counter-trend rallies." And guess what? I'm not going to try to try to time them. Uh, and and this is why, because you you just don't know. And one day things will seem so obvious, like back in January, Bitcoin was at $98K. We put out a report saying, "No, it's going to get rejected," and then it dropped down to $60K, and a lot of people were very sure back then as well.
So, we're going to wrap it up there. Thank you guys for tuning in. Subscribe again. Check out the sale, and I'll see you guys next time. Bye.