Transcription
Hey folks, welcome to verified investing.com. My name is Gareth Soloway, chief market strategist here.
Now, in today's video, we need to deep dive into Bitcoin because Bitcoin is holding a major level. I'm also not as bearish as I am on the stock market on Bitcoin. And I know that sounds crazy, but I do think there will be some rotation into Bitcoin as the stock market continues to decline over the next few months. So, a lot to digest here. We're going to look at all the key levels. I'm going to give you my key buy levels and entry points. Let's get right into it.
All right, first and foremost, Bitcoin. Here we go. The daily chart of Bitcoin yesterday, we flushed nicely lower. All right. Now, the key to this is that we came back to close above a key level. Now, number one, let's zoom out on the chart and find that key level. Well, if we zoom out here on the daily chart, we can see that this low pivot was pierced yesterday, but look at how price closed above it. Now, to be clear, this is short-term analysis. I'll get into my longer term analysis in the next few minutes, but right now, Bitcoin is holding this 74,000 level, which was your breakout pullback low from April. So essentially that whole tariff fiasco where the stock market declined, Bitcoin declined. Bitcoin has pierced that low but has held that current low from April of 2025.
Now if we zoom out even further, there's another major level Bitcoin held. And what we could see here is that you actually have these highs right through here that Bitcoin kissed to the penny right right around 73,000 right there and we bounced. I mean, look at that. It literally went right to that level right there and bounced back up. So, in essence, Bitcoin has held two major pivot lows in the near term. Now, listen, is there a chance Bitcoin is going to go a little bit lower and test this high? Yes, of course there is. But I have to say good resilience in Bitcoin right now. Bitcoin is hanging in there and in at least in the short term we could be due for a small technical bounce.
Now let's zoom out here. Let's talk about something a little bit on the bigger side. Let's talk about how we use trend lines. Trend lines again will give us major pivot lows and major pivot highs just like I have done in the past and it's a majority of what my technical analysis is based on. It's super simple in theory, although drawing does take just to know which lows to connect. Does take some knowledge, but ultimately it is more powerful in my opinion than any indicator out there. And I'll tell you why. Indicators give you a general sense of overbought or oversold. Right? We have negative divergences, positive divergences. It's not telling you the exact pinpoint reversal level as opposed to trend lines. Trend lines really can, as I just showed here.
But let me show you this other example here. So what we can do here is we can go back to 2017. I'm going to flip over to the weekly chart. There's the weekly, right? And if we look at the 2017 bull market high and we take that high and drag it up to the highest point of the 2021 bull market. Now granted, this high was a little higher, but notice if we do that right, and this is where it's important. Notice if we do that then you pierced it twice over here. You can see once right there and then a bigger time right there. So what I want to do here is see what happens when I connect it to the highest points. And if I do that, look at what we get. Okay. So exact high of 2017 to the highest point where the line is the is not touching anything else but the high from 2021 here. And then look at how the Bitcoin chart hits once and pierced, rejected, hit twice, rejected, hit three times, rejected, and then we've gotten the big fall. And so, in essence, you were able to, or I did back then, right in October, I was screaming from the rooftops that I thought Bitcoin was going to be a pullback candidate, contrary to what many players out there were saying with $250,000 price targets year- end 2025. We obviously know that didn't occur, but the charts, the simplicity of the charts gave us this high right here. All right. And what I love to show you guys is how Bitcoin rammed into the line, it was rejected, small pullback, then bulls got more momentum, tried to break it again, a bigger pullback, and then one final time they rammed into it. And then at that point, three times the charm, right? Essentially, the bulls gave up there and that's where the bigger selling came in and we've gotten our much bigger correction.
This often this type of situation happens very often and what it's called is the path of least resistance, right? And so, in other words, this can be on a support line too, right? We can ram a support line once, okay? Bears are trying to break that chart to the downside. We ram it again, doesn't happen again. We ram it a third time, it doesn't happen. At some point, the bears give up, the the sellers, and then what happens? The buyers take over and rip it higher. So, it works in both directions. And when you can notice this type of thing, you can start to anticipate where the bigger move could come. And in this case, it was the third hit. That's generally what we see, the third or the fourth hit.
Now, couple other things to go over here, guys. So, we have our levels here. Number one, we have our top, our short-term top. Now, by the way, if Bitcoin were to rally up and get into a bull market and let's just say, I don't know, let's just say in general it's two year a year or two from now, right? Where is it going to hit major resistance? All right. And so, if we go out to let's say let's say one year from now, early 2027, let's say Bitcoin has come down, maybe even it goes lower, but then it bull flag, you know, it starts to rally. There you go. Now listen, it's not to say this line can't get through, but this line must be respected. It must be respected until it's proven otherwise. Think about it like a a great baseball player, great soccer player, right? You know, just because they have one game where they get rejected or they get struck out or they miss a goal or a penalty kick, it doesn't mean you say, "Oh, they they stick. They were never any good." you respect that player until so many of those instances occur that eventually they break your trust, right? And that's what we're going into here on the charts and understanding. And this methodology, I love how trading and chart methodology mirrors human instinct, right?
So, in any case, we've come down here, short-term support is intact. I actually think we could see a bounce. So, if we get a bounce here, how high will that bounce go? First resistance is going to be this lower belly. See how price came down multiple times and it bounced up and then broke. This now is going to be resistance. So you're looking at about an $86,000 $85,000 resistance. Now, at some point, I do think Bitcoin is going to go a little bit lower. We do have a bigger head and shoulders pattern here. Now, the key is going to be watching your former highs from 2021.
Now, why? Now, I'm going to erase these lines here for a couple reasons. I'm going to give you my kind of base case on Bitcoin, right? So, this is kind of my standard expectation for Bitcoin. And what I'm going to show you here is that in 2017, we had obviously this high. And if we take that high and we drag it over here, you can see that in the bare market of 2021, we got down to it, we can see we hit it, we hit it, we pierced it by a little bit, and then we bounced back up and made a move up. So essentially what we can do is we can extrapolate that when you have a bare market in Bitcoin in the four-year cycle, which apparently still is intact since it's another four years and we're heading down, that you generally come back and pierce your low from your last cycle by a little bit. Now for us, what does this do? Well, it essentially says that we can calculate generally how much of a pierce from the last cycle. All right. Now, this is just one way to do it, but essentially we dropped about 20% below the former cycle high. Right? Here's your cycle high. We went 20% below that. So, if we extrapolate that out now and we say, okay, well, what's 20% below? Okay, below our 20 uh our 2021 $69,000 high. Essentially, you get right around 55,000. All right. Now, what's interesting about 55,000, right, is that in general, what are we seeing? We're seeing additional downside support. So, I guess my point is here is that while I do think near-term we're going to get a little bit of a bounce here, maybe back to 86,000, then we do come down, but there is your general bottoming level on Bitcoin. All right? At least in my base case. Now, remember, base case stands for kind of in the middle. It's kind of like generally if the whole world doesn't go into fiasco mode and collapse mode like let's say the stock market corrects but only corrects 10 or 20%. Then I think this is the likely scenario for Bitcoin.
Now if we get a bigger correction on Bitcoin you have to ask yourself well what's your worstc case scenario? Okay so right now we have 55,000 anywhere between really you know 70 and 55,000 somewhere in this vicinity which makes a lot of sense. It was this whole choppy area and also the highs from 2021. It's a 20% draw down below the high from 2021 which mirrors the 2017 highs as well. Okay, now let's talk about our worstcase scenario. What's our worst case? Well, our worst case scenario is that we now have a formation called a head and shoulders pattern. Okay, here's your head or shoulder. Here's your head and here's your shoulder. Okay. And it has triggered. Now, when something a head and shoulders triggers, you can calculate your potential downside target. Now, I want to be clear on this. Number one, it doesn't always happen. So, again, this target would be all out collapse in the stock market. 30 40 50% decline. Where do I think Bitcoin's going to go? All right. And to do this, to get this this calculation, what we do is we take the highest point of the head, we drag it to the neckline. Okay, drop a plum line down, straight line down to the neckline. We then from the break of the head and shoulders, which happened right here on the weekly chart, we drop it down and our worstc case scenario is about 30 basically about $34,000. About 35,000. All right, that is your worstcase scenario on Bitcoin. All right.
So again, in general, short-term bounce is expected here on Bitcoin. Okay, as long as it holds that pivot high we talked about and such. If we break that, then your base case comes into play. And I do think eventually we do, even though I'm expecting a short-term bounce here from those two technical lines that I started with. All right, then we head down to that 55 $65,000 zone. I'm going to be heavily accumulating in that zone on Bitcoin. In a worst case scenario, worst case that I see, and listen, I could be wrong. You know, maybe it goes a lot lower, but I don't think so. I still think there is a place in this world for Bitcoin. Bitcoin goes down to about 34 to 35,000. Okay, so those are your your your three scenarios, right? Short-term, midterm, it goes lower and then ultimately our worst case scenario. If if the market the stock market collapses, that's your downside target. All right.
Now, we know our upside as well, right? We looked at this and we know that on the next bull run, now it could be two years from now. Who knows? But the beauty of it is is this trend line will continue to go up, right? And so let's just say it's in September of 2028, the bull market. Let's say we've come down to 20 to 35,000. Now you're looking at 160 170,000. Now I know a lot of you guys are going to say, "Well, I thought it was going to a million. I've been told it's going to a million. Michael Sailor says it's going to a million." Well, yeah, it might go to a million, but it's probably much further down the line. Okay? It might literally be a decade down the line. It might be 20. We don't know. All I know is the charts and the trend lines. And if there's one thing you take away from this video, it's the trend lines are our friends. And understanding and using logic is everything. You guys have a great rest of your day. Come visit us at verifiedinvesting.com. I'll talk to you soon. Take care.