Transcription
Today's video is a change of pace, and I'm sitting down with fellow on-chain analyst Matt from Bitcoin Magazine Pro for a live, unscripted breakdown of the current market. Now, my streaming setup definitely isn't fully polished yet, but let me know if you want more of these live discussions in the comments section below. So, without further ado, let's dive into the conversation.
"How you doing? Thanks for joining me today."
"I'm good, mate. How are you? It's good to finally eventually do this. We've been planning this for a while, but yeah, it's good to finally get on."
"Yeah, I know. I've been really excited about this because we've actually connected a few times outside of just the purely Bitcoin content stuff. And when you joined, I knew nobody had actually seen you do a live stream like this, or you'd even done a face reveal. So, exciting times, and I'm sure you've got some exciting content to share with us today as well."
"Yeah. Yeah, it's a massive move. I mean, like, like this is the first time revealing my face and doing one of these. So, it's not going to be as smooth as my usual videos, that's for sure. But, um, yeah, really looking forward to it, mate. And, um, we'll get into the charts soon, for sure."
"Yeah, sure. So, I'll, I'll let you kind of explore your view and and, you know, give your take on the market right now because we're at a pretty pivotal moment. I feel we've had, obviously, this pretty bearish move to the downside towards 100K, and we've had a little bit of a bullish bounce here and there, but ultimately, the macro trend has still been to the downside. And obviously, I have my views and opinions on where we may be in the cycle. But do you have any take on whether we're still in a bull market, whether you think we've maybe entered bare market territory, or just your thoughts on the market in general right now?"
"Yeah, it's certainly, we're at a certain sort of macro decision point right now. It feels like we're very close between the bull and bear thresholds, and you can see that on online crypto Twitter. It's, uh, very mixed opinions. Like, 50% reckon we're in a bear market already, 50% think the bull run is going to continue. So, we're at a macro decision point right now. I've got a few charts I can show you to kind of show you where my thinking is."
"100%. Let's see them."
"So, first up here, yeah, we've got the, this. So, this is the 30-day versus 365-day moving average cloud. So, basically, the monthly versus yearly moving averages. And it's so simple, but it kind of defines the bull and the bear market for me. Uh, so you can see here this is where the, the bull really broke down last cycle, and the cloud turns red here, and this is where we had, it was over a 70% drop here, right to the bottom. Um, and again, the bull market started, the cloud turned green again. It's a simple technical analysis sort of signal, but it's kind of marked that bull-bear threshold, and now we're here. We're sitting at this decision point here. We've never really come this close to the threshold as we have now, and the two moving averages. So, we've got the green one here, which is the, the monthly one, which is 108,000, and then the yearly one, which is 102,000. So, if this green one crosses below the orange one here, so if we cross below 102,000 on the monthly, then you've got to just flip your bias then and think we're in a bear market. But for now, I still think we're in a bull market, at least based on this. I'm going to continue my bullish thesis. But if it drops below that, then we've absolutely got to split it."
"Yeah, 100%. And it's something that I actually brought up in a, in a previous analysis piece I did in the two previous instances of us actually testing the 365-day moving average because we'd barely done it in this cycle. Definitely not closed beneath it. But in that 2021 cycle, we closed beneath in our retracement from that first kind of double top 64K region and then immediately rebounded to new highs, which would obviously be the bullish ideal outcome if we can replicate that. And then the second instance was when we closed beneath it and as you said, kicked off that 70% retracement. So that's pretty similar to my kind of understanding of where we may be in the market. I think it's not only a very strong technical level, obviously around $100,000, but just from a psychological perspective, I think consecutive closes beneath nine, uh, six-figure territory into the 90,000s just doesn't look, doesn't feel great. And at that point, I think a lot of traders are going to be underwater. And if we think sentiment's bad now, I can't imagine how terrible it'd be if we dropped into the 90K region."
"No, absolutely. Yeah, you're absolutely right. It's just, it's more than a technical level, cuz that psychological level, as soon as we break below that, I remember when we wicked below about to 98,000 recently, and it just sent the sentiment absolutely shot. Fortunately, we bounced off it. But, um, yeah, if we want to have a look at some more on-chain stuff. So, okay. Well, this is the moving average trail here. You can see it's, it's been quite reliable for, it doesn't call the tops at all, but, um, it definitely shows the flip in sentiment here. But if we switch from more like on-chain perspective here, we've got the capital flows here, which is basically just the change in the realized cap. So here we've got anytime this is positive above this line here, we've got capital flowing into the market. So we can see that we've had these like, you know, sharp spikes in sentiment, capital's flowing in, and these are sort of around these new all-time high price discovery modes. But really, we've had kind of like quite a flat but still positive realized cap change. And this is a, this is a monthly change in the realized cap. So it's changed by positive 2% in the past month. Now, this is why another thing why I think we're bullish right now is because if this is going to flip negative here, like it did here and in the previous, um, bear market as well, then that's where I'm going to flip my, flip my bias because that means more capital is exiting the market than entering the market. So it's not just about the technicals. There's on-chain as well that says, okay, this is not very exciting right now. It's been very, very boring for like, basically the whole of this year, certainly since this summer started. Um, but overall, this is still a bullish resume. Even though it is boring, it's still very bullish, I think."
"Yeah, 100%. I've kind of come to the same kind of conclusion, but I think it's a really odd dynamic because if you look at the amount of selling that we're seeing on-chain, it's a monumental amount, sorry, of long-term holders distributing coins, and we're really not seeing any retail participation. There's been a big lack of capital inflows from smaller participants. And of course, everyone points to the institutional buyers and the big treasury companies like Strategy and Michael Sailor just accumulating as much as possible. But do you think that that institutional and treasury company buying is enough to rally Bitcoin higher, or do you think that we really need retail capital inflows to send the market considerably higher and to new highs?"
"Well, I think we can all agree here that retail just hasn't been here this cycle at all. And in previous cycles, like the 2017 cycle, I mean, I mean, that I was one of those retail that's exactly when I got in, um, and it drove that cycle all the way to its peak. But we can see that actually this cycle has not been driven by retail at all. And we can have a look at that here with one of these charts. So, uh, here. So, this is quite a messy chart actually, um, initially, but this is the different Bitcoin cohorts and all the different wallets that we've got on-chain. This is basically 99.9% of all the wallets that exist. There's a few like really, really tiny, um, wallets that just aren't worth analyzing. But here we could actually see what has been driving this cycle. So here, the thing that really stands out, at least to me, is this light blue area here, which has just been climbing and climbing and climbing. Now, if we isolate that here, this is the dolphin cohort. So, I mean, Bitcoin has these funny names for all these different sort of wild animals in the city for how big they are in wallet size. But basically, dolphins are people that have held between 100 to a,000 Bitcoin in one wallet. And, you know, that is quite a lot. I'm sure there are some retail guys that do hold that amount from the early days. But overall, this is kind of thought of as an institutional level wallet. So, it could be Micro Strategy, it could be, um, the ETFs and stuff like that. But if you notice since the ETFs launched, this dolphin cohort has absolutely exploded here. And what we can see here is that this net change here. So, this is the yearly change of all the different cohorts in the Bitcoin ecosystem. And you can see the dolphin cohort is the only cohort that's actually changed meaningfully year on year. There's a slight change in the planks, but these are like the absolute micro wallets, and it's actually only been a net change of over 700 BTC. So, it's not that much at all. But basically, everyone's been a net seller in the past year, apart from the dolphin cohort. So, it's an absolutely crazy dynamic to see and something I didn't expect at all. Um, but when it comes to retail, we can actually see here. So, this is the, the krill cohort, which is probably the smallest level of, uh, retail cohort. So, krill here, the definition, 0.01 BTC to 0.1 BTC. So, you know, a very standard, you know, balance for a retail crowd. And you can see they've just been decreasing the whole way through this bull market. And it's not just the krillers, the, the shrimp, the crab, and basically anywhere from, you know, 0.01 BTC all the way up to 10 Bitcoin, which if you've got 10 Bitcoin, you, you could still be a retail member, but, you know, that's probably the upper limit for most retail users. And all, all three of these here have just been decreasing and decreasing and decreasing. So, yes, I don't think we need retail at all to let, because we've rallied for all the way from 16,000 up to about 126,000, and, you know, it's mainly been driven this past year by institutions."
"Yeah, 100%. And I mean, I, I like to point out the fact that if you look to an asset such as gold, which is almost entirely driven by institutions, we've seen exponential price increases there to vast new all-time highs. And people are pointing towards Bitcoin and saying, 'No, retail is definitely required. We need retail FOMO into the market.' When we have evidence of a market cap 10 times greater, having these big exponential gains, five times the market cap increase of Bitcoin this year alone, it really just shows how much capital there is available to rotate into different markets and how, you know, buying a few hundred here or there unfortunately isn't really moving the needle anymore."
"No, exactly. And, and you saw that gold recently with its recent explosive price action, it can move a Bitcoin market cap in a matter of days, if not weeks. It's, um, it's absolutely wild. So, I, I definitely don't buy the whole narrative that Bitcoin's getting too big. It's a two trillion market cap. You know, it can't move any faster. I do agree that we're going to have diminishing returns over the cycles, but to say it can't move, well, we've been proven that wrong so many times, and as you saw with gold, it can move in an instance. So, yeah, I definitely think there's, it could explode to the upside and surprise a lot of people."
"So, is your base case a move to the upside? And I know you shared the MA cloud just as we're above the 365-day moving average, but do you think here is a good opportunity for accumulation, or would you like to see us reclaim some levels like the short-term holder realized price or some other key moving averages, or what's kind of your play right here? Because I know it's a bit of a confusing time to know exactly whether to accumulate more, if we want to drop further, or to take some profits. So, I'm sure there's a lot of people in the boat of just confusion right now."
"Yeah, absolutely. And it is, it is a confusing time. I mean, here on the screen here, we've got the short-term holder cost band. So, essentially here, the white price here, the white line is the short-term holder realized price. So, I'm sure, you know, people that watch both our channels are aware what this is, but it's basically the average price, uh, Bitcoin holders that have held their coins for less than 155 days or about 5 months. So, this is the, the sort of anchoring price that we, that we're all sort of like aware of. You know, if we've been buying Bitcoin recently, this is probably our realized price here. And as you can see here today, these cost bands are very simple, but they've been really powerful this bull cycle. You can see that every time we've gone into this sort of green band, so below the short-term holder realized price, it's presented some of the best buying opportunities the entire cycle and kind of we're just gone back into it here. So this is between 90 to the short-term holder realized price. And anytime we're in this band here and we believe that the macro is positive, this is just a great time to buy. And as we've seen already and what I'm going to show you later as well, is that I do believe the macro is still bullish. So, yeah, anytime we're in this area here, I'm looking to buy. And, uh, if we just switch over to this one here. So, this is my short-term risk score. Now, this takes the short-term holder realized price and, um, about eight other metrics that are all short-term in nature to kind of give us that, okay, is this a good opportunity to buy here? And what we can see here is that we've had four other areas of red, which are basically the best risk-reward opportunities that you can get in a continuing bull market. And right now, we've just printed another red signal, which to me means that the downside, if the bullish like regime is going to continue, is pretty limited. But the upside, as we can see here, could be pretty explosive. So, for me, I use this as my, this is my DCA sort of tool. So, anytime we're below the 0.5 midline, I'm DCAing. And anytime we get into this sort of red territory here, I'm like, not throwing a kitchen sink at it, but I'm definitely accumulating, definitely more heavily."
"Yeah, 100%. And, and one thing that is kind of on everyone's lips at the minute looking at a chart like this is, I mean, we, we've kind of discussed whether we're in bull market territory and what point would define bare market territory, but a lot of people are maybe a bit nervous to re-accumulate or strategically DCA based on the fact that maybe the four-year cycle is over, maybe the having event isn't having the influence it maybe had, or maybe we've already topped, just looking at the length of the previous cycles and whether this could even be a lengthening cycle when looking at certain macroeconomic factors, global liquidity, and the business cycle. So, do you have any ideas or takes on if we have broken the four-year cycle basis, if we maybe going to extend into 2026, and what charts and data points you're looking at to kind of give some clarification on that?"
"Yeah. So, I did a piece recently about saying I think the four-year cycle is dead. And, um, I'm not completely anchored to this viewpoint. It's just something that I found, you know, quite interesting because I think a lot of people are, they're completely fixated on a certain date and time. And yes, it might have married up at, you know, times in the past that, oh, okay, say we're going to top in Q4 of this year. I think it's pretty dangerous to kind of anchor your viewpoint based solely on a date or the time from cycle bottom to cycle bottom or having to hing and stuff like that. It's, um, it's not my type of analysis. But anyway, I think I think there is a very good chance that this classic four-year cycle is broken. And by broken, I just mean that, you know, we could extend into 2026. Cycles will always exist, don't get me wrong, cuz we will go in a boom and a bust, you know, cycle, but to be anchored on a certain viewpoint, um, of time scales, I think I think could be pretty dangerous. And there's nothing that's pointing to a classic cycle top yet. So, um, but the macro for me does seem pretty bullish. So, we've got, if I look at some macro charts here. Now, this one here, we've got, uh, the stablecoin market cap year-on-year percentage delta. So, basically, what this is telling us is that how much has stablecoins increased on a year-on-year basis. And we know the stablecoins are the fuel for when you want to buy Bitcoin or any other crypto for that matter. And right now, you can see that basically during this bull market, it's just done nothing but increase, increase, and it's now at a 61% year-on-year change. So, and the same here, we've got the M2 global liquidity. So, this is the dollars and the, you know, all the other currencies that are factored into M2 global liquidity. Again, we've got a positive year-on-year figure and it doesn't look like it's turning over or slowing down. We've had plenty of times where it has slowed down, you know, in previous parts of the cycle, but right now, I just don't understand how you can't be macro bullish in this environment. There's so much capital clearly going to flood into the system, and with potential rate cuts from the Fed and other macro backdrops that, you know, we've got the government shutdown in the US. There's so many things that if they could be resolved, we could be heading into quite a positive, uh, 2026. But we always have to be prepared for the downside as well. So, we could be wrong here. But for me, all these sort of macro signals are pointing towards, I can't see us topping here, especially rolling over in such a pathetic manner as well from 126,000. I just can't see it at the moment."
"Yeah. And I think if we are to have already peaked and just roll over from here, this will be the first cycle in any market in history where a vast majority of people in hindsight will be able to say, 'Well, I told you so.' It's just not something we typically see everyone bearish on Twitter and in the YouTube comments actually being right on something. We can see countless examples of contrarian mindsets and investing theses playing out to perfection. But everyone calling a cycle peak, just to me at least, reiterates that that almost certainly wasn't the peak. But you did mention that there is the fact the chance that we could be wrong, and if we are to turn over and have this kind of whimpering bull market that comes to an end, and we do just start to slowly bleed out, do you have any idea of how that might play out? Do you think that we're still going to see big 70, 80% drawdowns like we historically have done, or is the fact that we've had diminishing volatility to the upside also going to result in much lessened drawdowns and in a much lessened bear market as well?"
"Yeah, absolutely. Let's have a look at that. So, here on this chart here, we've got the, uh, this is the all-time high drawdown. So, how far has price dropped since its all-time high? And you can see that basically every cycle peak here in Bitcoin's history, it's drawn down right to this sort of red area here, which is over 70%, and lots of times it's been over 80% as well. And this is the standard playbook that everyone's expecting. We're expecting a nice cycle peak, retail for, and then we drop down 70 to 80% and absolutely, you know, get wrecked, basically. But as this is another piece that I did recently was analyzing, well, what if we're all wrong here? What if none of the macro top signals actually flashed and we're just going to slowly bleed out and roll over? Well, if that's the case, I think the bull market shapes the following bear market. And if we're just going to fall over here, I can't see a mass capitulation event where we suddenly drop another 70 or 80% from this level. And especially with this sort of institutional bid, maybe not so from so much from the ETFs because a lot of the ETFs are retail, and yeah, they'll behave irrationally, but a sort of perpetual bid from Micro Strategy and potentially the other treasury companies could sort of soften that downside, um, downside drawdown. Although having said that, there is probably a case to be made that some of these treasury companies, maybe the more speculative ones, might capitulate and sell their coins, and that could really start cascading in a sort of FTX style collapse. And that, that, that is definitely a possibility, and that could get us down to this sort of minus 70% drawdown mark. But overall, I would, I couldn't see us going much further than a 50% drawdown if 126,000 was the cycle peak. So, and, uh, if we just flip over to this next chart here. So, this is, um, a probability wave. So, this is basically how extreme has the either upside or the downside deviation been compared to history. And what we can see here is that, you know, we've got the bull market peaks where we've had absolutely massive upside, um, deviations here. And again, we've had the bear markets where, okay, this is about as bad as it gets in terms of capitulation. And we can see here that in the previous three bear markets, we've had, it's either gone between the minus three to the minus four standard deviation mark. And this is actually the FTX collapse here where it really wicked down below here, which is the first time we've ever seen that. But what we can see here is the, this is the price level right now. If we were to wick right down into a bear market, where is it going to bottom? Well, in most scenarios, we'd expect it to be around 70,000. And that's kind of where I would expect if we were to slowly bleed out from now. 70 to 80,000 is quite a realistic bear market, which really isn't that bad considering we're just over 100,000 right now. But if we were to see the absolute mass capitulation event, we've got a $50,000 bear market. It's really, really not that bad, and that's about 50% drawdown from current levels. So, yeah, I really don't see us, you know, really capitulating out into a bear market now. It's not like a base case scenario, but if we do, these are the sort of levels we got to look at. And they're really not too bad at all considering where we were only a year or two years ago. These are great levels. So, yeah, that's why sort of, you know, we've got to be prepared that if we're going to be wrong, and that we could see a bear market from here, but the bear market is really not that bad. And I don't think it's going to be anywhere near these $50,000 levels. I think we're going much higher than that."
"Yeah, I'm, I'm 100% inclined to agree. So, with all of that, you're anticipating further upside. You're not necessarily bearish right now. Of course, things can change quick. And I think that's maybe a little bit of a misunderstood topic when we make content like this. People think we're bullish right now, so we're 100% bullish. But I'm sure you're the same. You kind of work in probabilities and percentages based on the data that's changing every single day. But with all of that, you're still bullish. Do you have any expectations of price targets or potential date ranges where you maybe anticipate Bitcoin to maybe start topping out? And alongside that, there's also a lot of people. I know I'm Bitcoin Magazine Pro, but a lot of people exposed to altcoin markets such as Ethereum, Solana, and everyone else's favorite altcoin, which I'm sure is going to perform exceptionally well this cycle. Do you have any ideas of how the altcoin market could play out as well, assuming we do see a bit more of a bullish few months ahead for Bitcoin?"
"Yeah, I mean, the altcoin space, it's just been, it's been such a whirlwind for this cycle. I mean, many were expecting, you know, the same as previous cycles. Bitcoin will run and altcoins will follow. It just hasn't been the case. I mean, we've had some good bullish runs for some altcoins, but it's never been a sort of industry-wide pump as such. So, it's really, I'm not going to give too much content on altcoins because I think that's just, it's such a tough, um, tough market to be in. And it's, it's kind of, and it's hard, it's hard to predict. I mean, if you want to go out in that risk curve, yes, you can make some great returns, but it's, that's all I see it as. I've got a few altcoin positions, but god, it's less than 5% for sure. But in terms of topping out this cycle, I mean, again, this chart's pretty good at showing us, you know, what sort of levels we could potentially expect. Well, you can see here the plus three and the plus four standard deviations here. We've got between 150 to 170,000 here. And we kind of got up here. It's, this is the post ETF rally here up to 70,000. We got up into this level. That just means the higher and higher we get up into this level here, the more likely we are going to get a drawdown. And the previous cycle tops here, they've kind of all hit this previous top line here, but we know that these are all driven by retail FOMO, well, not necessarily retail, but a lot of these were retail FOMO events where just price went absolutely parabolic. And we know we haven't seen that yet. So, if we were to get an absolutely parabolic rally here, we could be seeing, you know, close to 200,000 here. And these rise all the time. All the time that we chop around here at these current levels, this whole thing is repricing, and these levels are dynamically moving, and they're just increasing over time. So, but if I was to give a sort of base case scenario, I think anywhere between 150 to maybe 180,000 I could see us topping out at, but, you know, we've got a long way to go until that point. Um, right now, we're at pretty, pretty good levels for a continuing bull market accumulation point, but I certainly don't want to put a date on things. I think again, like I said before, if you're trying to, you know, time the Bitcoin market with pure dates, it's just, it's, it's just not going to happen. But we, we definitely need a good few more months of bullish price action. We're not just going to go straight up vertical from here. We've got potentially the short term's looking pretty bearish, and from a pure price action standpoint, like, you know, the, the price action is looking pretty bearish. So, we've got to flip from that, regain the short-term holder realized price, and then start to punch away. So, we, we've got at least two or three months if it all starts going well from here. So, yeah, Q2 maybe of, uh, 2026 is when we could start getting a bit more bullish. But, yeah, there's, there's plenty of levels to consider, but the best thing to do is to react to the data as it's happening. You know, when we saw this rally here post ETF, this is the time we could look at it and go, okay, this is looking, you know, pretty toppy here. I might want to scale back here. But for me to try and make a prediction at this level here, it's just, it's, it's too wild. So, we just got to react to the data rather than predict."
"100%. I feel like this, this could have just been exactly my answers for every question that, uh, that we've discussed so far. Just like, I feel completely aligned on every talking point so far. So, are there any other final tidbits or little bits of advice or charts you'd like to share for any viewers to maybe again help clarify and simplify their investing and analysis? And of course, if it's someone's first cycle and they've not really experienced the big euphoric moves of 2017 or even the previous bull market and maybe feeling a little bit underwhelmed, any reassurances that things still do look good in the long term for Bitcoin?"
"Yeah, absolutely. Like, if this is your first cycle, then this has been, it's been quite a tough cycle psychologically because as you can see, it's just chopped up, down, up, down, up, down. And unless you've traded that yourself, you're probably thinking like, what is going on with this asset? I thought it just went up and up and up. Well, so I understand the frustration from certain people. But as we've spoke about before with the, you know, with the change in gold market cap, like these assets can move so quickly. As we saw here in 2021, like, or 2020 here, like when Bitcoin wants to move and the macro supports it, it can just absolutely multiply. So, and if you're a long-term investor, you shouldn't really be caring about whether you're accumulating here at a, you know, 100 odd thousand or 80,000 or 120,000. If you've got a 10-year time horizon and you've got Bitcoin compounding at anywhere between, say, 30 to 50%, then it, these levels really don't matter. So, if you're a net accumulator, these are good times to accumulate. You know, you don't have to be accumulating always in the bear market. Like for me, I've got, you know, I'm still DCAing at these levels. Like these are still attractive levels for me over the long term. If we start getting toppy here, yeah, I'm going to pause my accumulation, but it doesn't mean that, you know, it's still not a good long-term buying opportunity. I mean, we, we, you know, we topped out in the mid-60s here. Well, we're still up on our position, even if we're accumulating here. So, I think the, the key is, if, if this is your first cycle, then the key is to start accumulating, you know, and it definitely start accumulating when the levels are depressed. But don't be too worked up on the, the local price action. If it drops another 20% from current levels, that's just the Bitcoin market, and it's going to try and, it's going to try and shake you out. But overall, if you've got 5 years or even a 10-year time horizon, then these levels really don't matter."
"Very eloquently put. I really enjoyed that. And yeah, I, I think, uh, we should do this definitely more often. So, I think what we're going to do now is almost flip the script a little bit. I'll give some analysis using some Bitcoin Magazine Pro data, and then we can kind of get my viewpoint on things and everything. So, we're not quite exactly sure when this is going to go. We're filming this on the 12th of November. But yeah, if you guys enjoyed this, then make sure to go to each of our channels to check everything out, and we'll put links in the description, all that good stuff. And Tom, thank you very much for joining me here today. Is there anything else you'd like to close out with?"
"No, no, thanks a lot, man. Like, obviously, I really enjoy your analysis. I've been watching you guys since, uh, the Look Into Bitcoin days, you know, like a long while back. And yeah, really enjoy your type of analysis. It's the same sort of style as mine, data-driven, take the emotions out of it. We're not here to moonboy the price. We're just here to look at the data and go, 'Right, you know, this is the most likely scenario from here.' So, yeah, they're really happy to do this. We'll just keep doing this, um, more often."
"Yeah, it sounds good."