Transcription
This is an indicator that I use literally every day. It is super important. Almost no one, or rather no one, talks about it. Personally, I've already talked about it quite a bit. We'll come back to it. It's proof that liquidity in the crypto market is leaving. There is a huge problem. I will talk about it today. Also, we will do an analysis correlation with recent Fed news and the end of QT. You will see that everything is coming together, and we will also take stock of global liquidity. It is super important to master these topics. Once again, I remind you that our algo service is available + 7.97R for the SPT algo. last week, which means it generated 8 times more gains than the risk taken on trades in total. Obviously, past performance does not reflect future performance. It's just a transparent follow-up of results that are available in the Discord every week. You also have the LIM algorithm which triggered 31 TP last week. To access it, it's free, it's accessible to everyone. It's the first link in the pinned comment. All useful links concerning my content. You just have to click on this first link here to register on Bitgate, our partner link. You are obliged to click on this link, otherwise you will not have access to the algos. You create your account and then you just have to click on this second link. It's a short video that explains absolutely everything about how to configure the algos, how to also get the mentorship for free. I remind you that all this is free and how to also get access to the VIP Alcoin which is in the VIP crypto on the Discord. This is where I will share the best opportunities on Altcoins from my point of view. So, to come back to this indicator, what is it? It's a homemade indicator that is a stablecoin delta. What does that mean? It means that every day, it reports whether we have printed stablecoins or burned stablecoins. And so here, when I switch to weekly, it gives me a weekly report. If I switch to monthly, it gives me a monthly report. If I make a report in 1 hour, it shows me all the stablecoin prints or exits in 1 hour, and so on and so forth. And literally, stablecoins are our liquidity. It's as if I were showing you the global net balance of the Fed here, for example, or liquidity in the United States, or even better, the global net liquidity of all countries, whether it's the United States, Europe, China, and so on and so forth. And so here, we literally see that, for example, the global Net Liquidity is falling since 2021. This has not prevented the market from performing well, obviously, but it restricts the pump of many sectors. We know that we have a huge bubble in AI, we still have a big tech bubble. It is especially these sectors that are performing. Many sectors are in difficulty, and basically, it's the AI bubble and the tech bubble that continue to carry the markets. Again, it's not necessarily a problem, it's what generates more cash. So money goes precisely into this type of company. But everything related to small companies, risk-taking, etc., is struggling enormously. There is less and less financing for small companies. So that's why money goes where there is interest. And so in crypto, it's more on the Bitcoin side, let's say a little Ethereum with its ETFs, etc., but this lack of liquidity has caused a lot of harm to the Altcoin market. And for us, pure liquidity to read within the crypto market is thanks to this indicator. For example, yesterday we burned 356 million in stablecoins. So, in fact, what that means is that people have cashed out, whether they are institutional investors, individuals, it doesn't matter, and they simply wanted to get their fiat back. So, in short, stablecoin reserves are decreasing slightly to return to fiat. And that's why Tether and the like burn stablecoins because fiat is coming in. For example, when you want to invest a billion in the crypto market, you go to Tether, you tell them, "Here, we want to invest a billion, blah blah blah," you give a billion in fiat or a billion in collateral, it can be many things. And they, well, they will simply give you a billion in stablecoins, and that will allow you to buy cryptos. However, when you want to cash out, if you want to get your fiat back, well, Tether simply returns your fiat and behind it burns the stablecoins they minted so that it is always backed at 1. So, that is to say, in short, there is 1 dollar for one stablecoin. And so here, we can see that since the beginning of October, we have a decrease in stablecoin printing here. And when I switch to weekly, well, we can see that this week, for example, the week is not over yet, there's today, tomorrow, and Sunday left. And for this week so far, we are at a delta of only 72 million. That means that of everything we burned, everything we printed, the final delta is 72 million dollars. Let me tell you, we won't do much with that. There's not enough to pump the market, unfortunately. That doesn't mean the market won't pump, but really launching trends is complicated. And what else shows that the crypto market is running out of steam? Well, as I'm showing you here, since August, we see that the delta is gradually falling. This means that less and less liquidity is entering the market. Also, if we correlate this with the ETFs we have here, we can see that it's the same thing, that is to say, we had a strong peak, but even on the Bitcoin ETF side, it's decreasing quite a bit, and now we're starting to see outflows. So that means we have a liquidity problem in the crypto market. And liquidity is decreasing. Again, it's not dramatic, it could very well come back in several weeks, but we clearly see a lack of liquidity. For example, it was the same from March to October. I'll let you look at what happened to altcoins and Bitcoin from March 2024 to October 2024. So it's this period here, from March to October, we see that altcoins fell against Bitcoin because, as you can see, stablecoin printing decreased. So there was money entering the market, but less than in the previous leg. This means that during this period, many crypto projects were launched, a lot of supply came onto the market, less demand. So naturally, altcoins lost value. We see here that we had the elections of Donald Trump, a lot of money entered the market. 5 billion, 4.40 billion, 6 billion, billions, billions, billions. So all of that allowed the Altcoin market to pump a little. Bitcoin also pumped a lot. We had this rebound in the Altcoin market. Unfortunately, it did not reverse the overall trend, which remained bearish. And so then, when all that calmed down, that is to say, well, the market finished pricing in that Trump was president. Moreover, the inauguration took place on Monday the 20th or Tuesday the 21st of January, I'm not too sure. Here, we can see that afterwards, again, stablecoin printing started to decrease quite a bit. The Altcoin market went back down. And so again, we had a recent print, July, August, etc. So we see that the bars are going up. The Altcoin market rebounded. But we see here for several weeks that it's going down again, and therefore the Altcoin market is going down again, and you remember Bitcoin from March to October, roughly speaking, if I switch to daily scale here, March to October, Bitcoin looked like this. Bitcoin wasn't doing much. Well, it consolidated, it marked a big stop zone that it eventually went to test, and thanks to Trump's election, we exploded upwards. The first pro-crypto president in the United States, so one of the world's leading powers is pro-crypto. Of course, that was positive for BTC. That's why we had a lot of capital, but it mainly benefited BTC because, as I've been repeating for months, the Altcoin chart against Bitcoin, and that's how you should look at altcoins, not in dollars from my point of view, it's against Bitcoin, and it's always bearish. We are still in a bear market for altcoins against Bitcoin. There are altcoins that have experienced a bull market against Bitcoin, very few, but I would say 95% of the market remains in a bear market against Bitcoin. And so here, I'm going to switch to monthly and we'll put the Bitcoin chart here like this. Hop. And so here, we can see that, for example, during Trump's elections in November, we had a record stablecoin print. Now, the real record was in 2021, it was here. Uh, tac tac tac tac, it was 19 billion there. However, here we had a second, so to speak, record. It's the second largest inflow of money ever recorded in the crypto market. It was the month of Donald Trump's election. We had 18 billion dollars here, and we see that currently here, we are starting to diverge a bit, that is to say, we are not managing to do better than this record. So that's why liquidity is starting to contract. And so here we can see that monthly, well, in October, in the end, October wasn't so bad in terms of stablecoin printing, 10 billion. But we have a market that can no longer. That is to say, on BTC, we have been consolidating in the same place for several months despite having here 1, 2, 3 months. So we had about 30 billion in stablecoin prints, which is still huge. A lot of money entered the market, but unfortunately, Bitcoin can no longer pump. This means that, on the other hand, there are really very big players who are distributing a lot of crypto here. And so that's a bit problematic. So now, what we need to observe in terms of the trend is in November, whether we will manage to reprint or not at all? Because here we are seeing that on the weekly, it's starting to fall. Printing is falling. This means that less and less demand is entering the crypto market. Here, 4 billion at the end of September. 1st week of October, 3.2 billion. 2nd week of October, 2.1, so it's decreasing. 3rd week of October, 1.3, it's decreasing further. And so the 4th week of October, unfortunately, 74 million. It's ridiculous, there's no more liquidity entering, and that's what we need to observe. I remind you that liquidity is the most important thing. It's what allows us to pump the market. I can show you this here during the bear market phases. Here, you see in 2021, we always had stablecoins being printed. There was always money coming in, but less and less. So that's why the market was going down. Here, there were a lot of outflows. Indeed, this often indicates capitulation. It's really when people leave the market, they leave, and for example, you bought cryptos. I'm saying something stupid, Mr. A, he buys cryptos here. So he sends 10,000 dollars. Okay, he makes an investment of 10,000. So he sends fiat from his bank to, I don't know, Bitgate. Okay, so he has stablecoins because we trade in stablecoins in the crypto market. So he exchanges his fiat for stables. Okay, money is coming in. So, what do Tether and Circle, etc., do? They print stables simply because they receive fiat in return because, in fact, when money enters the market, exchanges also, for example, if tomorrow many people invest on Bitgate, Bitgate, you send fiat, for example, Bitgate's fiat reserves increase. You, in turn, want stablecoins, so Bitgate's stablecoin reserves decrease. So Bitgate will go to Tether and Circle and tell them, "Here, we have X inflow, we need 4 billion stablecoins, here's 4 billion in fiat, and we'll make the exchange." And so that's what leads to stablecoin printing. However, when there are big red bars, well, we know that this is where people capitulate because, in fact, we know that people are sending their fiat back to their bank accounts. So fiat reserves decrease. So stablecoin reserves also, well, Tether and Circle will burn stablecoins behind that. And so that's what makes this when we burn stablecoins. Okay. And so we can see that, for example, June 2022, a big capitulation in the market with -6 billion. Then FTX crash, we don't even know, it came after September 2022, -5 billion. So if many people left the market, this was our capitulation phase. Then there was the FTX crash. We see a lot of red bars. So money continues to leave the market. We know that people capitulated massively around here. So this is a very interesting indicator. And from what we see in this cycle, well, there hasn't necessarily been capitulation yet. People are staying in the market currently. People are not cashing out their money, from what we can see. However, unfortunately, I don't have more history because I would need to remove USDC. I would need to remove USDC. But for example, here, at the market bottom back then, there was over 1 billion, which was huge for 2017-2018. That marked the bottom. Indeed, we saw how much less stablecoin was needed to pump the market because Bitcoin was much less capitalized, much less liquid, and so with little stablecoin, we could really push the market, and it was also with a lot of old funds that were simply available in the market. And then when Covid arrived, and that's why I wanted to talk to you about this, QE arrived, and look, as soon as we entered QE. So we entered QE in September 2019, but again, I've already explained, it was a very light QE. Just look at the Fed's balance sheet. You see it was very gradual. However, when we started with trillions of dollars in printing by the Fed and central banks, well, let's go to Global Net Liquidity. Here, we see that it started exactly from March 16, 2020. I'm going back here to my print. Look here, March 16, March 30, 2020, on the crypto side, not even two weeks later, bam, the big inflows started to arrive. That's what led to the biggest bull run of all time, whether on BTC, or on, how should I say, whether on altcoins. And so here, record printing during the dip. So there were big players who entered here, they bought back, and here again, we see that a lot of money started to leave here. So there's a first capitulation. The market went higher, printing started to decrease. We entered QT from late 2021, early 2022, and then there's no more liquidity in the crypto market. And then there was liquidity again, even though we were in QT, because there were narratives, there was the first narrative which was the BlackRock ETF. So BlackRock filed for an ETF. At first, it consolidated. Then from October, there were big rumors of approval. So insiders, not insiders, but those who anticipated this approval entered. So we see that inflows returned. Then, literally, the approval came the week of January 8, 2024, the news broke. Inflows came in, so a lot of money entered the ETFs and the crypto market. Then, we calmed down. Then, Donald Trump's election. Again, money came back massively. Then, we calmed down, tariffs, etc. So, we printed less and less. And here, on this pump, we see that we pumped with a stablecoin print that was quite stable, no longer growing, and in fact, we see that there are no more real narratives. Then, here, there were pension funds, retirement funds that will soon be able to enter the crypto market. But we see that there are no more real narratives. And so here, we see that for several weeks now, we have been printing less and less because the market is waiting for the next narrative. What could be the next narrative? Either a disguised QE, and this is a narrative of many people, including Arthur Hayes, the former CEO of BitMex, who thinks that Bitcoin will explode because the Fed will be forced to print a lot of liquidity to refinance the US debt. That could be one of the narratives, and so it will be observed if we see global liquidity going up because we are rolling over US debt, it will very likely impact Bitcoin, and on our side, we will see the real liquidity in the market. We will see stablecoins going up again here. However, if that's not the case, it means there are no more bullish narratives in the market. And so, at best, Bitcoin will continue, for example, to do what it's been doing for months, which is I pump, I retrace, I pump, I retrace, but less and less high. That is to say, in fact, we will follow the bullish trendline of the cycles like this, the trendline that is blocking us on this cycle for now. And so, Bitcoin will do something like this. Each time it reaches its trendline, but it's no longer in something very, very bullish. Or it will form a huge range, and we'll enter a bear market. Personally, that's not my view. The bear market -70%, etc., etc. For me, that doesn't fit with the current macro from my point of view. I made a video about this again on what I think about cyclicity. However, those who talk about capitulation, we are not there at all currently. Now, sentiment is very pessimistic. I think especially that many people are shorting on derivatives, and you just have to look at the funding rates on Bybit and Binance, and funding rates that are quite negative. So that proves that there is a rather pessimistic sentiment. But in this kind of market, what happens when people are bearish but there's not much liquidity coming in and not many investors anymore? There are bounces that take out sellers, but then the market goes down again. That's often what happens, quite simply. But in terms of real capitulation where people sell and withdraw their money from exchanges, that's not the case currently because if it were, we would have outflows. Here, we can see that this is not the case. For example, it was a bit the case during the April drop. Here, we can see that we had outflows in February, or rather, at the end of February, there were -700 million. Here, people started selling during this big drop. People had already panicked about the drop we had. Well, we see it very clearly on this drop, people panicked quite a bit. Then Trump announced strategic reserve, blah blah blah, but ultimately it was nonsense. And then the market continued to decline slightly. Here again, we see that people panicked here during the bottom on April 7th. So for me, this is an extremely powerful indicator, which really marks when people capitulate. But in any case, on the big picture, so really when we take a step back in the long term, there hasn't really been capitulation yet. Here, it doesn't mean we will have one. Now, if we enter a bearish swing, so if this order case, as we see in the briefs, becomes a breaker, then yes, it could start a bearish swing, and perhaps when we start to have big outflows, people are capitulating, sending their money back to their bank accounts, people are leaving the market, that will be an excellent entry point eventually. And that's why I like to look at this chart, altcoins against Bitcoin, because I suspect that on this chart, when we have big outflows, it will probably mark the next bottom because, again, I repeat, QT is ending. This means that afterwards, it doesn't mean QE, it means a long phase where there is neither QT nor QE, or a very small QE, but disguised. However, the next QE phase, there will probably be one, and for me, we shouldn't miss it because there will be much more printing than what we experienced in this cycle. There will be much more liquidity available, and that's what will lead to a new bullish cycle for altcoins. And so, for example, if the altcoin market against Bitcoin continues to fall, I think that at the next outflow peak, that's when the bottom will form for altcoins against Bitcoin, and then there will probably be consolidation because it means that people who have been in this market for 4 or 5 years have finally capitulated on their altcoins, and that will prepare the next cycle. I'll stop here. This was a long video. I hope you enjoyed it. These are really super important things. Don't hesitate to smash the like buttons. Thank you so much to those who play along. Leave a little comment, it rewards me, it's free. Don't hesitate to subscribe as well. I analyze the market every day. You have all the links in the description box. There is a lot of free content to get, whether it's our algos, mentorship, VIP Alcoin, etc., if you want to train for free. See you very soon.