Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin and how it has now fallen below its 200-day moving average.
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So, Bitcoin unfortunately just had its first weekly close below the 200-day moving average for the first time this cycle. It's not like we haven't seen this before. In fact, the last time we saw it was where it first closed below it was actually in June of 2022. So, while there's a lot of, you know, uproar about how this time is different and how the four-year cycle is invalid, you can see that a lot of these things actually play out in similar ways that they've played out in the past. And I think a lot of people just want to overcomplicate it when we don't really need to overcomplicate it. Often times, Bitcoin drops into June, right? You can see it dropped into June of 2022, and it also dropped into June of 2018 as well.
Now, I can't say for sure like when Bitcoin is going to form a low, but what I will say is this. Oftentimes, the way this works out is Bitcoin forms a low early in the summer, and then there's some type of counter-trend rally that happens, like a little bit in mid to late summer, and then that sets up the final drop into the market cycle bottom. Now, if something were to happen that caused Bitcoin to unravel quicker, like maybe a financial product, uh, within the cryptoverse struggling and not doing what it should be doing. If something like that were to happen, if you think back to the last cycle, we had, you know, FTX blowing up, we had Luna, we had Voyager, we had a lot of things blowing up, and even then, we still had the four-year cycle went out. So, think about the type of event you would have to have that would cause the bear market to end early. It would have to be a pretty big event, right?
And we've made the comparison before, obviously, to 2019. You know, the comparison between this bear market and the one in 2019. And you know what caused that bear market to end a little prematurely was arguably the pandemic, the blue line, right? That was the pandemic. You had price-based capitulation where there was a massive spike in volume, and it caused all the bulls to get essentially wiped out, and then it fully reset all the on-chain metrics. It just reset everything, and it allowed for the bull market to begin. If you don't get something like that, then you're still just simply looking at a fairly normal midterm year bear market in 2026, comparable to the average of prior midterm years, where you often will find lows early in the summer and then rally into the mid to late summer before then dropping into that final market cycle bottom.
So, I would say it makes the most amount of sense to defer to time-based capitulation, but to be open-minded to price-based capitulation forming a low sooner if that's how it plays out, right? So, like if we get price-based capitulation, then instead of calling for a low later in the year, it would then make more sense to pivot and say, "All right, we can actually have a low sooner." But as long as we don't have that, then I would say, "All right, you know, these rallies will likely fade back to the downside."
In fact, one of the things you can note in 2026 is that we had a low in February, a higher low in late March, early April, and then a lower low in June. Look at 2018. A low in February, a higher low in late March, early April, and then a lower low in June. Now, it's hard to know exactly like when you might get counter-trend rallies, and that's why I'm not electing to trade them. I actually think the best strategy for Bitcoin generally is just DCAing Bitcoin in the second half of midterm years. That's worked out pretty well in prior midterm years. Sure, if you did it in 2018, you did end up, you know, getting a larger drop later on. And if you did it in 2022, it obviously went a little bit lower later on. But if you had a longer time horizon, it didn't really matter, right? Like it didn't really matter.
Now, if you want to get into the nitty-gritty in 2018, what happened is Bitcoin fell into late June, got a little bit of a push into early July, and then still sold off again in in mid-July where it came back down to $6,000. And again, I've made the comparison previously about what if, you know, this this $6,000 in both 2018 and 2019, what if that's kind of comparable to the $60,000 to the $60,000 level in, uh, 2026, right? Where if you were to get a big drop below that that level, that would sort of lead into that market cycle bottom. So, the lower you go below that, the more likely that market cycle bottom will will in fact be in. But again, unless there's the catalyst to cause price-based capitulation and to cause a massive surge in volume, then I I think time-based capitulation is what wins out.
And what you can look at when you look at volume is you'll see how there was a massive, a massive spike at the end of the 2014 bear market, a massive spike at the end of the 2018 bear market, and also a big spike at the end of the 2022 bear market. And we just simply haven't had anything like that this bear market yet. But it could in fact be something that occurs a little bit later in in the year.
So, I just wanted to put out this video and say, look, I know Bitcoin dropping below the 200-day moving average is a little scary, but it, it has happened before, right? It's happened multiple times. It happened last bear market. It also happened during the pandemic, and and we eventually came back. So, you know, in in the midterm year bear market, we fell below it. We rallied back a little bit above the 200-day moving average, and then we fell back down into the market cycle bottom. So, I I think unless you get that price-based capitulation where Bitcoin fully resets the on-chain indicators, if that happens soon, then I would pivot and say, "All right, you don't need a lower low." But for now, I think the most likely outcome would be Bitcoin forms a low early in the summer, counter-trend rally mid to late summer with a final drop like Q3, early Q4. Something like that would make the most amount of sense to me.
But if we get that price-based capitulation, like any good investor, it would make sense to pivot and not marry a, any any prediction, okay? Because no one actually knows what's going to happen.
That'll wrap it up for this video. Again, if you guys like the content, make sure you subscribe, give the video a thumbs up, and again, if you're interested, check out the ITC conference coming to Miami, uh, the weekend of November 20th to the 22nd. Thank you guys for tuning in, and I'll see you next time. Bye.