Transcription
Hello everybody. I'm Cantonese Cat. Hey everybody, Cantonese Cat here. Let's do something that's absolutely ridiculous to do. Let's speculate on Bitcoin. I think it's time to do a video just to talk about: Is the market over? Bitcoin is scary. Kind of what my thoughts are. If anybody even really cares anymore, because we got a really scary month here so far in November. It has been absolutely ridiculous in terms of the parabolic move down, and it doesn't look like it's stopping anytime soon.
So, chapter one: The Bitcoin is scary. As you can see, that Bitcoin has lost this line over here, which is the Ichimoku tenken. The tenken line is basically an average of the last nine candle top and a candle bottom. And whenever it's holding it, and on the bull market, it holds it, it goes up a lot higher. If it lost that, then generally you lose a lot of momentum. We have currently lost it. So far, it's November 20th. Unless we have a miracle where this turns out to be a wick, Bitcoin has lost momentum and it probably would need to take time to go either sideways or down here. Build up a little bit more momentum to go up higher. Does it have to plummet all the way down? Well, not necessarily. Last time it lost it, it still made another higher high here. It really depends on liquidity conditions. But losing the tenken here to [snorts] close the month, currently tenken over here is around 100 and 100.3,000, um, or just 100, 100,000. And sorry, 100 thou, 100,300, I should say. If you are not able to close the month above that, which currently looks very bleak right now, because Bitcoin is bleeding, it looks very weak on the short term. We're not able to do that. Means that we have more weakness here, maybe more sideways, maybe more rangebound, and that's the reality.
Now, you look at the weekly Ichimoku here. We have broken down into the Ichimoku cloud, and currently the bottom of the Ichimoku cloud could potentially serve as support, I suppose. I don't know. We'll see. Currently, the bottom cloud right here is around 80,000. Currently looks like it wants to get there. Maybe looks like a falling knife. I do have a GAN art here. Bottom art here is around 85,000. And I do also have it again arc or again square over here on the daily. The rough number here is also 85, um,000. So that seems to be a zone that it wants to hit.
Now, a lot of people have been calling, you know, this Bitcoin bearish divergence. I guess certainly it seems like it's been working out. Price goes up, RSI goes down. Certainly looks like you got a little bit of exhaustion, and it's playing down. It doesn't always have to work that way. Sometimes when things go up on a bull trend, you can have bearish divergence be negated. But certainly, unfortunately, Bitcoin is having its bearish divergence here playing out.
Now, another thing here too, a lot of people talking about the 50WE moving average. Whenever you lose the 50WE, which is going to be the blue line over here. If you lose the 50, maybe the bull market is over. Right here, lost 50, back-tested, couldn't hold, went back down here. Losing can have a little bit of a bull trend here, but you lost 50. Well, it takes a little while for it to kind of get going here again. Bull trend happened, lost 50, bare market, right? Bull trend happened, lost 50, bare market, question mark. Four-year cycle, question mark. That certainly seems to be in a lot of people's minds.
So let's see what we're seeing here on the weekly. Um, Bollinger Band expansion. Looks like it is expanding to the downside. There's a lot of momentum going downwards. It doesn't look like it wants to stop yet. It looks like it's very, very much of an impulsive move to the downside. I guess the key thing is, we can have a lot of expectation, including myself, and the market doesn't really owe you anything. Just because we think that, you know, there's going to be a lot more money coming in and Bitcoin is going to keep going to the moon. Because Bitcoin is where liquidity goes into, and uh, it's been holding relatively well until recently. But Bitcoin represents the economy, right? Bitcoin represents how liquidity conditions should be, right? Well, I'm not necessarily sure about that. Like, the more I think about it, I think Bitcoin is its own asset and it represents its own thing. It has its own technicals. It does what it wants to do based on whether or not liquidity is entering it. This particular asset, as opposed to the other ones, currently is not being favored right now.
Now, in terms of what I think about the overall market, is this going to be the bare market that we've experienced like the last time where every single thing just crashes, including not just Bitcoin, but altcoins, including not just altcoins, but stocks, including not just stocks, but indexes. Everything just started crashing down nonstop, right? You're talking about the end of not just the crypto cycle, but the stock cycle and the economic cycle.
There are really two things that really matter here when it comes to economic cycle, as far as I'm concerned. The first thing is deleveraging. When it comes to deleveraging, this is Bitcoin's chart over here. As you can see that each bull market really comes with significant deleveraging that happens before we're able to have another great bull market. Right here, we have a significant deleveraging event happen here. But this bull market is just extremely strong. It requires a lot of deleveraging for about two or three years before you have a bull market here. Currently, we've had the deleveraging here, a big giant cup here. We only made a slight kind of higher high here. This bull market has not really been that strong.
Now, with that said, Bitcoin has been behaving in a very irregular way compared to a lot of other assets. For a lot of other assets, generally they tend to tag the 20-month moving average on the way up. Bitcoin during this bull market did not really want to do that. Bitcoin during this bull market did not really want to do that. As soon as it kind of just kind of basically exhausts itself whenever it decides to touch the 20, it really couldn't hold because there's such a huge amount of gains and a lot of people are looking to take profits. It just couldn't hold these kinds of 20-month moving average holding over here. This cycle we have made some gains. You, a lot of people can say that we've made tremendous amount of gain. A lot of people can say that the timing is right. This is the end of the four-year cycle and this is the bare market starting. The, the truth for a regular asset to touch the 20-month moving average is not a bad thing, and it can even wick down below, is not a bad thing. Matter of fact, if it touched the low Bollinger Band, touched the upper Bollinger Band, and it touched the 20-month moving average, this is supposed to be a relatively bullish thing. It can wick underneath of it as long as it ends up relatively finding good support here. It's supposed to be a bullish thing for an asset.
Now, but when it comes to Bitcoin, this is behaving very different from the past two cycles over here. It does get a lot of people a lot more scared about it. If you look at Nvidia, Nvidia also kind of does this crazy thing where it just keeps going up without tagging the 20-month moving average for the past two cycles, right? Which is also why the reason as to why back in April is extremely scary because tagging the for the 20-month moving average here. And if it didn't hold the 20-month moving average, it could go down a lot lower. Here it didn't hold. It went down to low Bollinger Band. Here it didn't hold, right? Closed the monthly candle underneath of it, unfortunately. And it just kind of kept going down a lot lower here. We end up touching up a Bollinger Band, got a little bit tired, a little bit exhausted, came back down to the 20-month moving average, and we were holding it. Although it was extremely scary when that hap, that was happening, and when we held it, we ended up making another leg up higher, and it was pretty impulsive in terms of what happened, right? That is what Nvidia ended up doing.
Now, at Bitcoin, are we at an Nvidia moment, or are we at a regular Bitcoin moment? Are we at an Nvidia moment where it, we're tagging the 20 after things just kind of went a little bit exhausted and we're trying to get a little bit more support here down the zone around $87,000 again? It can wick down below. I don't know exactly what it wants to do. Um, the month still has another 10 days or so before the candle closes. It can plummet all the way down to 45,000 for all I know. Or it could end up just tagging this support zone here. Go down even lower and hold. It's hard for me to say for sure.
Now, but with that said, this is a healthy thing for, if this is, if this were a stock, you know, to touch the 20-month moving average is actually not an unhealthy thing. It just did that with Nvidia when Bitcoin is having some relative strength over here. It didn't really tag down there, but it was getting a little bit exhausted here, and it's finally doing that, right? Nvidia ended up tagging it here back in April and had a really good reaction. Is Bitcoin going to end up having the same thing? I don't know. Or is Bitcoin going to end up plumbing down, plumbing down, kind of like Nvidia plummed down, plumbing down? I don't know the answer to that.
Let's look at other clues, right? This is the S&P 500. What had ended up happening? Well, we end up having a deleveraging event, right? We end up having all the way down to the 20. As you can see, a lot of times you touch the low trend and you push up, you, it, it's fine. It just keeps on going. Sometimes it decides to tag the 20 like it did over here, and then if it's holding the 20, and this was extremely scary back here, back in October in 2023, for a lot of people. A lot of people just think that we are [snorts] going to end up resuming the bare market, breaking down. But it was testing the 20-month moving average over here. It did wick down underneath that here a little bit. Same thing here for April. We did end up wicking down here a little bit. Grab a lot of liquidity, get a lot of people really scared, and next thing you know, we just ended up just having a big giant wick and we just ended up going a lot higher.
Same thing here for NASDAQ. The same thing happened for NASDAQ. That already have gotten significant deleveraging. Same thing happened for IWM. IWM had multiple deleveraging events, including October 2023, including April of 2025. All these are great, great deleveraging. The deleveraging event that has ended up having a lot of weak hands being shaken up. A lot of stocks been transferred from the weak hand to the strong hand, and a lot of margin calls happened. A lot of folks have lost their position. And a lot of people sold at the low because of the panic that was associated, and a lot of people just end up having their leverage position liquidated.
This is the ARC fund. ARC fund has also had multiple deleveraging events on the way up. Just been chopping, chopping, chopping, have deleveraging event over here back in October 2023. Had another one over here in, I believe this is the August 20, um, 24, when it was the yen carry crisis. You have another deleveraging event over here back in April was the tariff prices, and next thing you know, because all these, these different deleveraging events, it just went a lot higher. Right now, we have another bearish engulfing scary candle, but it's forming higher highs and higher lows. There's nothing really that bearish here for the trend. Although I do not know how low the higher low is going to get. It's, it's not a bad thing. Right here, this is RG. RG has gone through a huge deleveraging event. Where is a huge plummet and huge channel down to really crush everybody. It just reclaimed the 20-month moving average, is forming higher highs and higher lows right now over the last year or so. This is a trend change, and it's looking pretty decent here for RG. If RG is changing trend from negative to positive, I don't think liquidity is really leaving the system. I think it might be just uh, one of those things that is happening with specifically with Bitcoin is trying to delever it because it hasn't really deleveraged like all the other assets I've shown you here, including again, Nvidia has deleveraging events. Bitcoin really hasn't until just now. Nvidia has this deleveraging event, right? S&P 500, QQQ, the NASDAQ, IWM had multiple, Ark fund has multiple, RG has multiple. This over here is biotech. Biotech is actually doing really well, higher highs and higher lows. Is biotech something that happens, um, to, to go up when you have a recession, when you have market crashes? Not necessarily. This is actually one of the indicators to tell me I don't think liquidity is really leaving the system. I think this might be a Bitcoin specific thing.
Look at the, um, uh, the SM, which is the, um, ETF for, uh, a lot of the semiconductors. And you can see how scary it was. It even closed the month down here below the 20-month moving average. Are we going to end up plumbing all the way down a lot lower? No, it ended up just being liquidity grabs. Just end up having a huge move up here for about half a year after that. We're just simply way outside the upper Bollinger Band. Simply got pulled back right into a Bollinger Band here. We had the deleveraging event for semiconductors, right? We've had the develop, the deleveraging event here for Tesla. Tesla has plummeted here all the way down to 100. Plummet all the way down to 140. Plummet all the way down to the low 200s over here. Everybody got absolutely demoralized during these. Got absolutely destroyed during these because they're using leverage, because they're buying your double leverage ETF like TSLL, because they're doing all kinds of things that end up just getting punished here. Guess what it's doing the entire time? Higher highs and higher lows. Guess what's happening right now? It, we already tested the 20-month moving average, right? Is liquidity leaving the system right now? I don't know. That's not what Tesla is telling me. This is extremely economically sensitive stock. It looks like it's holding pretty well.
What is we, what are we looking at here? SoFi is SoFi had this deleveraging event, even heck yeah, it did, right? Back in April of 2020, uh, 25, it went all the way down from 20 bucks all the way down to eight bucks, right? It went down 60%, and next thing you know, it just shot all the way down to 30. Right now, we are correcting, but it went up straight here for about seven or eight months. This is a very economically sensitive stock. It's been forming higher highs and higher lows. The trend is your friend. The trend is bullish.
What do we have here? Affirm. What is Affirm looking right now? Well, higher highs and higher lows. It looks like it wants to build up a little bit more of a base and correct this move over here for the last 5 months and then correct over here for 3 months. This is a higher, higher, higher low type situation. This is still a bull trend until otherwise proven. If Affirm, which is an economically sensitive stock, is looking like that, I really don't think that the, you know, the overall bare market is coming. I think it's Bitcoin specifically.
Looking at Shopify, what are we seeing here? Well, it had multiple deleveraging events, touching the 20-month moving average over and over again. It keeps bouncing. It keeps bouncing. One, two, three, deleveraging event, and we were able to shoot up to the upper Bollinger Band. Right now, we're having a correction over here because we're trying to break the previous all-time high. And a lot of times when people see, oh, it was breaking about the previous all-time high, but it could be a double top. It doesn't really happen that way. This is a big cup over here. Just keeps forming a handle. It's a bullish formation. It could go down even lower and it could form, you know, a more stronger handle. But this is a bullish formation. And as far as I'm concerned, you also have some really crazy stocks that are still going up and simply just need a correction because it was just way outside the upper Bollinger Band, such as Cipher, such as Iron. All these are still very impulsive and they have just made a huge move. And these are kind of expected corrections here for a stock that's gone up from, you know, $4 all the way up to like 70, correct down to 40. It's not really that big of a deal.
Now, looking at the Hang Seng index here, what do we do? We have multiple deleveraging effects. Matter of fact, this whole big giant thing over here was deleveraging of the housing market of the entire stock market for, for China, for a very long time. Formed an Adam and Eve double bottom. Delever, delever, back-tested Adam and Eve, and just went way overboard. Got closer to the 20-month moving average. And next thing you know, it found good support. I just decided it wanted to go high.
What are we looking at here? Japan. You know how scary it was when you talk about the yen carry trade where the Japan index just falls like eight or nine percent in a day. And guess what it did the entire time? This candle over here with the yen carry trade back in August 2024, touched the 20-month moving average, found support, and tried to bounce. Couldn't really bounce quite yet. It wanted to delever even more. What happened here? Well, the tariffs, um, scare around, um, April 2020, uh, 25, touched the low Bollinger Band, and that was a Dragonfly candle. Dragonfly candle, two huge deleveraging events, shot way up, right? Stocks needed to be deleveraged before they shoot to the moon. That's basically what is happening. And I think Bitcoin here might be doing a very similar thing. This could be a deleveraging event before going up. How low does the deleveraging event push down? I do not know. I know that it is at a pretty strong support zone over here. Could it break down all the way down lower to touching the Bollinger Band and have a bare market? I do not know the answer to that, right? But all I know is that I don't think liquidity is leaving the system overall. I think this is a specific correction for Bitcoin, and Bitcoin so far is doing something that actually is looking pretty healthy in isolation. If you don't let look at a previous cycle to have the expectation of what Bitcoin should have done or would have done, it is doing something that is expected to do for a stock on the way up, because that has happened pretty much this cycle already for multiple things, including Japan market, including the Chinese market, including the US market, including a lot of stocks that have shot way up that actually end up having a huge deleveraging event before going up. All these things are happening. Liquidity so far is not leaving the cycle, but this seemed to be more or less a deleveraging event that Bitcoin is going through.
Now, thing number two: Liquidity is liquidity in the system. I just showed you a lot of clues that it is. I just showed you the Chinese market is actually for an Adam and Eve double bottom over here. Looks like it wants to go up higher, just kind of cooling off around here. If you're looking at the Hang Seng index here, generally last cycle, you have a little bit of difference here. A lot of people was talking about the bearish divergence. But if you're looking between the liquidity, um, conditions between Bitcoin and the Hang Seng index, you would notice that last time you formed a little bit of exhausted higher high over here, but the Chinese liquidity was already leaving the system. Here you formed a little bit of exhausted higher high over here, but the Chinese market is keep on going up. There is increasing in Chinese liquidity going into the system. There's a little bit of bearish divergence here. There's a little bit of bullish divergence here. And it still may be playing out here. Maybe Bitcoin just needed to have that deleveraging move, kind of like, you know, what happened here with the Nikkei, with the Japanese market, before going up.
Now, looking at the Nikkei has gone up way up, just like that. Previously, Bitcoin has tracked the Nikkei relatively well. Previously, whenever Nikkei has a big move up, Bitcoin goes for a big move up. Whenever Nikkei makes a big move up, Bitcoin goes for that. Right? Currently, we have a discrepancy. Currently, we have Nikkei just pushing all the way up to the moon. But Bitcoin is lagging. If anything, right now, Nikkei is pulling back to a pretty significant degree. Then, Bitcoin is pulling back to a significant degree, but Bitcoin has been kind of holding steady for a long time. It hadn't really, um, had any major correction despite all the other things having some crazy corrections that you can see here. You know, despite the Hang Seng index here going through some pretty crazy corrections over here and here, you know, Bitcoin didn't really do that. So, that might be what we're kind of dealing with here.
Now, next up here, talking about liquidity is that we have currently still a relative outperformance of the NASDAQ over the S&P 500. This is a bullish behavior in a bad bare market where we just had from 2022. You have the, um, relative underperformance of the NASDAQ compared to the, uh, the S&P 500 for the entire year. We have basically reversed that, have a V-shaped recovery, and basically just kind of going sideways over to the point that you have bullish squeeze, and we end up breaking to the upside here. We just simply are correcting here. Now, this is not a bare market if the NASDAQ is outperforming the S&P 500 overall, but it's forming higher highs and higher lows. And so far, the month in November is scaring a lot of people because it's just a very, very bearish month here so far, and people can't really remember more than just a few weeks, sometimes more than like two or three months. The reality here is that it's actually doing pretty darn well in terms of what is showing here for liquidity system here.
Look at the US dollar index in general. You have the US dollar going down. There is a lot more economic activity that could happen for the US. There may be more goods and services from the US that might be, you know, relatively more affordable. And this is going to be a good thing for the US system. Here you can see that basically we've broken down with a bearish megaphone pattern, trying to backtest here for a while. We're right at the backtest. Right here is where things get a little bit more bullish here for, you know, for the US dollar, or at least feels more bullish, but it's at resistance. So technically, it's actually very bearish. It favors more of a bearish continuation, and if that's the case, then, you know, as far as I know, if the US dollar does poorly, usually that means a little bit more risk on for the system.
We will see. A lot of people are also talking about Fed's Fed funds rate. Now people are talking about cut rate cuts are bad. Now they're talking about rate cuts not fast enough is bad. Everybody is just basically throwing narratives out there that I don't know how to make sense of because it doesn't. So what I'm going to say is this: Most of the time when you have Fed's Fed funds rate going down, most of the time your Fed funds rate going down is good for the market. This is the Russell 2000, and the small caps, extremely economic sensitive because they have a lot of the more high debt companies, extremely economic sensitive. If you have rate cuts, the Fed funds rate goes down, generally it's good for the market, right? Except for two things. Except for when the market is just really bad and you need to go through a great deleveraging. What is the great deleveraging? The first great deleveraging was the dot-com bubble, and we did that, right? That's why if everyone's going, "is actually bad" because it wasn't because Fed funds rate cut down is bad for the economy. It's because we needed to delever the system. Second time, what do we need to do with a deleveraging system? The great financial crisis. There's a housing bubble that needed to be popped, and the market did badly. That is not anything that is unexpected. But in general, when you have rate cuts, it's good for the market.
Now, you can also argue that you, people talk about Jerome Powell, people talk about Fed rate cut, things like that. As far as I'm concerned, you just look at the yields from bonds, they tell you exactly what the Fed is going to do. And the Fed usually just ends up being delayed in terms of, um, what they do. They follow market conditions. Market conditions correct itself. The peak of the 2-year yield over here, when everybody's calling higher for longer. The peak of the 2-year here in is in October of 2023. Guess what's also happening with October 2023? Now you can see also that the peak over here is October 2023, and the 2-year right now is going through a VOP distribution pattern which favors it to keep going down over here over time. What happened at October 2023 was also the bottom of the US money supply. This is the US M2 money supply, is right at the bottom of it here. Since then, money printing has just been going up. And on top of that, you can see the top, again, just another illustration, top of the 2-year yield is October 2023. Top of the 10-year yield is October 2023. And the bottom of the Russell 2000, which is the most economically sensitive index because it has all the small caps on there, is in October of 2023. Since then, money printing has been going up, and the Russell has been recovering, but it had a deleveraging event here in April that has recovered extremely well. And currently, we're going for a little bit of a minor deleveraging event over here that's getting a lot of people really scared.
But if you ask me, okay, so you're saying that liquidity is going up, US, uh, dollar supply is going up. Where's the money going to? Where are we going to get the liquidity to kind of come reverse back into risk-on assets? Let's look at this thing here called gold. What is gold doing? Gold is gone parabolic. It went all the way up to the 2.272 log fib here that has been drawn for a whole decade or decade and a half, I should say. We are hitting a resistance zone. Currently, we have got a little bit of a tweezer top over here. Month is not closed yet. I cannot say that that's going to be it. But currently, it's at a very, very important fib level here, 2.272. How the other thing you, you look at this is a log fib, right? Linear fib 3.618. Also very important fib level over here. Look at a fib channel 1.272. It's getting rejected right there. Look at another fib channel over here on the linear that was long. Looks like linear here, 2.618 over here. A lot of confluence in terms of resistance. What do we got here on the 3-month chart over here? It's way outside the upper Bollinger Band. Got a huge wick above. This is pretty, pretty bearish and pretty toppy looking thing. I'm not saying that gold has to stop because I don't really know whether or not it has or not. All I know is that pretty much when IWM is about to break out of the previous cycle high, right around the area is when gold tops. Right around the area is when you end up having a little bit of rotation from liquidity in gold going up to risk-on assets such as small cap stocks like the Russell 2000, and you're seeing that there's a lot of liquidity rotating up here and a run-up phase over here for the Russell 2000 that has lasted here for about two, two and a half years until you enter a bare market and consolidation, and that's when you have build-up liquidity going back to gold over here. And whenever it decides to break out in four more all-time highs over here, gold tends to rotate out of it, right? Same thing here. Build-up phase for liquidity over here. What do we got over here? Well, we got a bare market for the Russell 2000. As soon as it wants to break above, what do we have? Money is rotating out from gold into the Russell 2000 here again. And guess what's been happening over the last four years? Over the last four years, liquidity has not been going into Russell 2000. Over the last two, the last four years, liquidity has been going to gold. There's a lot of liquidity that's being trapped in gold right now. Really, for the last 3 years, cuz it's really 2023, 2024, 2025 where this thing just kept on going parabolic and hitting one, hitting 2.272 log fibs when Russell 2000 just goes through a huge base over here. A huge formation of a cup and a very, very deep handle, and currently looks like it wants to break above and keep getting rejected over here. Unfortunately, while gold is looking like it's very, very toppy and the sentiment here is extremely euphoric here for gold.
Now looking at Bitcoin, what's happening with Bitcoin? The same thing. Whenever you have a big build-up in liquidity. First of all, I think Bitcoin actually at the beginning phase actually does build up the liquidity together with gold. But then eventually, the interesting thing here is eventually you end up having a little bit of a weakness here for Bitcoin as you end up having a rotation from gold into Bitcoin. Eventually, you actually have a little bit of temporary weakness over here, right? Same thing here. You have a build-up phase for both. Bitcoin slower, gold, uh, gold faster, Bitcoin slower, gold faster before it rotates. You have some temporary weakness over here, right? I, I don't know whether or not this is what's happening, whether or not we're, we're kind of looking at the temporary weakness in Bitcoin as it was really trying to hold, and then right now it's below the 20-month moving average. Are we getting to a point we're about to get a rotation? This is just a temporary weakness that Bitcoin has always shown. I do not know the answer to that. Uh, I just, um, I'm just looking at patterns from cycles and looking at what I'm seeing here. It's a possibility, but so far the deleveraging for Bitcoin has been extremely brutal. So I know only answer that.
Now, to remind you, Bitcoin, uh, sorry, gold is at the 2.272 log fib right here. As you can see that 2127 log fib is very important because that was the top here for Bitcoin from 2015-2017. It basically hit the 2.272 and it just ended up having a prolonged bare market after that. 2.272 was hit here for Dogecoin back in 2020-2021, that a huge frenzy for Dogecoin hit 21272 and that was the end of it, right? 21272 was also when Nvidia was hitting here and ended up getting rejected here and corrected for the entire year because it couldn't break above the 2.272. 2272 is also right here on Amazon during the bull cycle of 2018, 2019, 2020, 2021. It couldn't really break above the 2272. It spent a whole year, year and a half, two years to do so. Couldn't do it. And you just end up having a bare market. Right here is the S&P 500. We look at the, um, great financial crisis, do a fib level here. Once it gets to 2272, what happened? It corrected here for the entire year in 2022. That is a very important fib level. Here is also Alibaba, whenever it's first come about. You can see where you have, um, from the IPO over here to the previous all-time low over here. It went all the way up to where is that level at before plummeting all the way back down to where it kind of got lows at 2272. It's a very, very important level. On top of that, MARA also ended the cycle, closed at 21.272 last cycle. So there might be some rotation from gold to other assets like IWM and potentially Bitcoin, but Bitcoin is showing some deleveraging behavior potentially before its run-up, or this is the bare market. I, I do not know the answer to that.
Now, chapter four here is talking about cryptocurrencies is now considered to be risky. Has always been thought to be risky, but now particularly so because it's crashing down and it's been suppressed and it's been very risky for a long time now, especially now when things are looking bad and they could look a lot worse. Again, Bitcoin, right? It could have been a lot riskier, I suppose, up here in the 120s. Um, right now we're now at around the, as I'm talking right now, this picture is old. Right now, we're talking about 85,000. Can it go down lower? Yeah, it can. Can it wick down lower yet? It can. Can it go all the way down to lower Bollinger Band to to the delever? Yeah, it can. Can it go down somewhere between these two levels and just kind of hold like it did over here in space? Yes, it can. All I know is that it is less risk compared to it was a month ago. And it, it's going to get even less riskier if it goes down lower. That's all I know. I know nothing. That's really all I know.
The other thing too is that I don't necessarily think that is that risky here compared to the previous cycle top. Assuming that if this is the cycle top, if this is a cycle top that you're talking about, from the previous cycle top to this cycle top, we've gone up 82%. Not too shabby, right? But in comparison to the previous bull cycle for Bitcoin, this is really nothing. You know, here from three is top here to the top over here was around 250%. From the top here to the top right here was 1,500%. Right now, you're talking about 82%. Which is relatively nothing and it's a little bit boring here. So, as far as I know, the upside is not that great. I'm not sure the downside has to be that much. If the upside is not hundreds and hundreds of percent of gain, I'm not necessarily sure whether or not the downside has to plummet 80, 90, 95%. I just don't know whether or not that has to happen. I also don't know whether or not it has to correct for that long if the upside hasn't really been that impressive. That is to me why I actually don't necessarily think that Bitcoin is that risky where it is, because it just simply hasn't really had that, you know, craziness move up yet.
Now, this is the Russell 2000. The Russell 2000 again represents small cap stocks. You're talking about Russell 2000 in the sense of cycles. Pretty much every single cycle once it breaks above the previous all-time high like it did over here. Once it breaks above the previous all-time high like we did over here. Once it breaks above the previous all-time high like it over here, generally goes up at least 35 to 50%. 35 to 50% seems to be the general rule here. So far, we had a little bit of another false breakout over here back in October. And that high over there in relative to the previous high here was 3.4%. That after a huge pit of accumulation, after gold is trapping a ton of liquidity right now, when you have the, the NASDAQ, when you have the S&P 500 going very, very high, when you have the Nikkei and you have the Hang Seng index from from Japan and from China doing very, very well, this is really a disappointing result unless of this is building up for something. I, I, I don't know. Okay, this is just something I'm thinking about.
Now, what the reason why I lump this with crypto is because this is going to be the most riskiest, um, you know, um, sector in the stock market, and as far as I'm concerned, people also associating Bitcoin with high risk. Although I don't really think that the risk is that elevated so far this cycle. So, we will see. Right now, looking at the other thing too is the altcoins. Unlike Bitcoin, Bitcoin has not really truly had any major deleveraging. It has some moves down about 30%, some moves down about 30%. Which is not really that impressive for an asset like Bitcoin to correct by that much, but it hasn't really had as much correction. Like before the shot up here, you had the COVID scare, and that was really demoralizing, you know. So, we haven't really had that correction here for Bitcoin.
As far as I'm concerned, altcoins, and this is the others chart, which represents [snorts] the cryptocurrency market cap, excluding the top 10 coins. So, you're talking about not, not, you know, Tether, not USDC, not Bitcoin, not Ethereum, not the top 10. You're really talking about the riskier stuff here. We had three deleveraging events, and one that touched the low Bollinger Band. Three deleveraging events, including the yen carry trade, including the, um, tariff scare. It didn't really shake crypto that much. This over here in October, whatever that was, when it felt like a lot of crypto were going to zero, really shaked bit, uh, really shake the cryptocurrency market up. Really had created huge negative sentiment for the crypto market, and it's caused significant delever over here in October that has went into November here as well. Currently, it is just extremely weak price action over here in the short term, right? But deleveraging is not necessarily a bad thing, I guess is what I'm trying to say, because it really seriously haven't run up by that much. I don't really necessarily think that the, if you, if you're into like the larger altcoins, I, I don't think that the, the risk is that elevated right now. I could be wrong. I mean, all these things are could be go to zero if you say there's no utility or whatever. Um, again, I don't know. Like if you look at stocks like Open Door or whatever, they, they're very high. You know, I, I don't know. I, I have no idea. But all I'm trying to say is that they already had all these different deleveraging events, and the one in October is particularly horrifying. I think a lot of people have been liquidated. A lot of folks have kind of exited from the crypto market, and they probably not never look back until things go up higher. I think that it has already happened for that.
Now, if you're saying I don't like to look at others, I like to look at, um, something that really tells me a lot more information. Let's look at the entire cryptocurrency market cap excluding Bitcoin, Ethereum, and stable coins. Total three ES. That's what the ticker symbol is. We've had a lot of deleveraging events over here. The same thing, right? The yen carry trade, tariff scare, and the crypto crash in October. And currently, we are kind of trying to hold on to the 20-month moving average and have a hard time doing so. But as far as I'm concerned, these are deleveraging events on the way over here. And this is still a little bit of a cup and handle pattern over here. The cup, the handle over here has been deleveraging galore. It's been really, really tough here right now.
Looking at something that is also, um, very important to look at, and I don't think people are not talking about it, but I don't think people really necessarily put this into into context here. This is what we call Bitcoin dominance. This is a percentage of the entire cryptocurrency market cap that belongs to Bitcoin. It looks weak. Bitcoin has not really had a correction, and the others, um, the, the other altcoins have already had significant correction as Bitcoin is going through its correction right now. The altcoins have been destroyed and they are bleeding, but they're not bleeding as hard as one would expect. When Bitcoin keeps on just keep on going down, it doesn't look like it wants to stop. Altcoins, I would argue relatively is actually holding pretty decent, considering, right? Because Bitcoin dominance is dropping. When Bitcoin dominance drops, that generally signifies a little bit more of a risk-on thing. It may not happen immediately, but in general, it signifies a little bit more of a risk-on behavior. Sometimes Bitcoin dominance drops for a whole year, drops for a whole year, and that allows actually rotation for Bitcoin into altcoins. These are times of, you know, significant euphoria when this happens. We simply haven't had that happen quite just yet. Matter of fact, if you're talking about having a beginning phases of crypto, uh, of Bitcoin dominance, you know, dropping down, usually not much is happening. Um, I, I actually think that this is something of a rotation between, um, Bitcoin into altcoins. And sometimes when you have rotation, you have to sell it before you can buy, you actually end up having a downward pressure for the market overall. And as you're having a continued rotation, you, you might continue to have a downward market overall. I, there are a lot of folks that are saying that, you know, hey, if people are, all these like original OG Bitcoin whales are selling, and now they're selling out of it. Well, are they going to keep cash? Maybe they are. Maybe they have their own personal, you know, um, preferences in terms of what they're doing. Or maybe they're actually looking at, hey, you know, this is actually a risk market. Maybe this is just a correction. Maybe they know something, and maybe they want to rotate out into altcoins. Who knows what they want to do? Russell 2000, who knows what they want to do. Tesla, who knows what they want to do. All I know is that the dominance is dropping. And that's not necessarily a bad thing.
The top of the crypto market here for the cycle was in November of, or November, October 2021. That was the bottom of the, um, Bitcoin dominance. The top over here was in December of 2020, 17, and that was around the top of the bottom of the Bitcoin dominance. As far as I'm concerned, dropping down generally favors altcoins to do well. Generally favors more risk-on environment, but it's still in the process of figuring things out. It's got a tweezer top over here. It's trying to break down underneath the 20-month moving average. It's not really doing that quite just yet. With that said, on the weekly, it's broken down underneath the Ichimoku cloud. I think it's going to go down here moving forward. We see here with the moving averages, the orange over here is 20-week moving average. The blue over here is 50. The purple over here is 100. This is a classic sign of a trend change where it broke down the 20, touched the 50, was able to hold, break back above the 20, came back down to 50. This time, wasn't able to hold, down to 100. Trying to backtest the 50, not able to push through. A negative 20 is coming back, slapping, uh, this all the way back down here. It's going to go back to 100 here. It's probably going to hold. It's probably going to get stuck in the range. It might even break above temporarily above the negative sloping 20 here, but it's not going to hold because it's negative sloping here. So, and probably end up breaking down. It might even backtest 50 here. Who knows, right? Whatever it is, it's trend changing because Bitcoin dominance has been going up nonstop for about two and a half years. This is the first time where Bitcoin dominance is actually showing some kind of weakness. It's actually showing signs that it wants to do a trend change. And it looks like it is going to happen because the 20-week moving average is negative sloping, because it's broken underneath the weekly movable cloud. Even the 20-month moving average is starting to flatten. So it looks like Bitcoin dominance is going up.
Now, as far as I'm concerned, when you have a prolonged period over a year of Bitcoin dominance going down, you have increasing in Bitcoin. Now, until that happens, you generally have the beginning phase of Bitcoin dominance shifting. You actually have some weakness over here for Bitcoin. When at the phase of, you know, Bitcoin dominance kind of shifting over here, you actually have some weakness here for Bitcoin. We are having a shift over here. At the beginning, there is some weakness here for Bitcoin. How weak is Bitcoin going to get? How long is the weakness for Bitcoin going to get? I do not know. But this is not anything necessarily unusual. I'm saying all these things without knowing whether or not the bare market is here. Nobody really knows, right? But there is a, a thought process there that is saying that maybe this is nothing that's truly that unusual.
Now, as the market goes on, there would be people who are scaring you, saying that the all the, the, um, stable coin dominance is going
up. If that's the case, that means that, um, you know, people are leaving high-risk crypto. They, they don't want to hold Bitcoin. They don't want to hold Ethereum. They don't want to hold altcoins. They just want to go to the stable coins. The reality is, it's not true. It's not really a reflection of that. The US, uh, USDT, USDC dominance added together. These are the two biggest, um, stable coins added together. They are shifting trend. They are going up. But this happens pretty much every single time whenever you have Bitcoin dominance drop, which is the bull market, and it then stable coin actually ends up dropping. Bitcoin is going up, and then that can happen during the bare market. It doesn't necessarily mean, just because you have an increase in stable coin dominance, that a bare market is here. I want to make sure of that.
Now, same thing here. This is the USDT over plus USDC dominance here. This is Ethereum. You can actually have stable coin dominance going up during the uptrend of Ethereum. This is not mutually exclusive. I just want to point that out because there might be people out there that are looking at stable coin dominance. They're going to get scared about it.
Ethereum, very quickly, how, what do I think about Ethereum? As far as I'm concerned, I don't know everything. I don't know anything. All I know is that we just had a huge deleveraging event that happened back in April. Huge deleveraging event that happened in April that scared everybody out from Ethereum. This four months over here has shifted, um, the momentum and sentiment greatly. The issue, I guess, is that we have such a great sentiment that there is a lot of leverage here in the system, and currently we're trying to delever again. It's incredible how it's incredible how, how much deleveraging is needed before sustained uptrend here during this cycle. It's just absolutely incredible. There's liquidity being trapped other places, but it's not coming yet. Or, at least, it's not coming. At least it's not coming yet. Right.
Broke down underneath the 20-month moving average. Break back out. Back testing it so far in the, you know, on, on November 20th. We are down underneath the 20-month moving average here again. We couldn't hold it. Is it a wick like kind of like is going to be here because we have another 10 days of trading? Who knows? All I know is that currently it seems that if, because this is a huge accumulation zone, because this has happened going sideways here for a very long time, because liquidity in the system is there for the S&P 500, NASDAQ, and gold, and in Bitcoin, and Bitcoin is going through a little bit of deleveraging here. Ethereum is also going through a little bit of delever here. But the interesting thing is that Bitcoin dominance is dropping. That is something that is of interest to me. Pretty much whenever it dips underneath the 20, uh, month moving average here, because of the structure that is showing, which is in a cup here, a smaller cup over here, because the structure over here is still bullish. As long as this is, this is a higher high, by the way. As long as this is a higher low, which actually lowers go all the way down here to like the 13,400. As long as this is a lower low, the lower it dips, the better risk-reward ratio it is. It's, it's not, you know, like, yeah, it can go all the way down to zero. Sure. I don't, I don't, whatever you want to say. It's, it's fine. It's breaking support level. Yeah, sure. Monthly candle is not closed yet. I can't guarantee you that it's going to end up, you know, closing a month underneath of it. If it does, can it go down lower? Sure. But as far as I'm concerned, if it dips underneath the 20-month moving average, this is not anything that is super, super high risk like it was up here, right? It could break out. That's, that's an upside risk, too, right? It could break out if liquidity conditions comes in, but it wants to delever. What can I say? It can delever all the way down to 2500 to the top of the Ichimoku cloud here. It broke down here. It could hold. It could break down again. I don't know. But this is higher high and higher low. How low does a higher low get? I don't think anybody can is really going to be able to tell you.
The Ethereum chart is up top. The Russell 2000 chart is at the bottom. What are we seeing here on Ethereum? On Ethereum, you can see that right before the Russell 2000 breaks out, or right around the time when the Russell 2000 breaks out, which it looks like wants to do that, but it's just having a little bit hard time doing it. But right before it breaks out, what happens? Well, Ethereum actually looks like has some temporary weakness over here for three months. Looks like you got some temporary weakness over here for, you know, for a couple months here. Looks like we [clears throat] have an attempted event over here trying to break above, couldn't. Well, they're the enduring weakness over here for about 3 months, right? Could it keep on going longer? Sure. I can't guarantee you anything, right? But this is not anything necessarily unusual. And to me, does it matter in terms of the levels? Not really. I'm trying to chase the, the bigger move. Um, but I, I could end up losing 30, 40, 50% of my money or more, um, while trying to do that. Um, but as far as I'm concerned, the lower the higher low gets, the better risk-reward ratio there is. That's kind of what I'm looking right now.
The biggest question everybody's probably interested in, where is Bitcoin going? The answer is, I don't know. I can tell you that there's an arc over here around 85,000. There is, um, a 20 moving average over here around 87,000. There is a tenkan up here that we've lost around 100,300, 100.3,000. There's a kitchin down here around 76,000. All those are levels. There's a big buy order block over here around 85,000 all the way down to the 70s. Right? There is a buy order block here on the weekly. That was a monthly B block. The weekly buy order block all the way down here around 80,000. There is the bottom of the Ichimoku cloud over here, which is around 80,000. All these are possible.
With that said, I, I want to, I want to finish this one thing here. The fear and greed index today is six. It doesn't mean anything. Stocks can keep going a lot lower, and people can get more scared. It doesn't mean anything. The only thing it means is if the liquidity is truly leaving the system, this is truly a bare market, then this really doesn't mean anything. That stocks can keep going down a lot lower, right? I have a problem with that mindset because S&P 500 just made all-time high last month, because the QQQ or NASDAQ just made all-time high last month, because the Russell 2000 just had a wake up all-time high last month, because the Dow Jones Industrial Average is making all-time high last month, because ARK fund, which supposedly is trashy, made an all-time high last month, because the genomic ETF, the ARK fund, is making higher highs and higher lows and is changing trend to bullish now, because biotech is doing well, because semiconductors are doing well, with the exception of just one month, it made a previous all-time high just last month, because Tesla is looking like it's doing pretty well and it's holding relatively steady and just made all, like it closed an all-time high candle last month. Um, because you have some of the economically sensitive stocks like SoFi just made all-time high last month, the firm looking like it's basically consulting sideways over here to get it to get higher low over here for before it breaks out, because Shopify, which is an extremely economic sensitive stock, has been making higher highs and higher lows, and there's nothing unusual over here compared to some previous correction that I've endured. Um, I bought the stock right around here, by the way. I've added a little bit more over here. Um, it's just forming higher highs and higher lows. Do I suffer sometimes? Yeah. Um, but I, I mean, overall my strategy is to not overtrade. Cypher is it just shooting up? Yeah, it's, it's a bull trend, right? Look at Iron. What is it doing? Well, it's still a bull trend, but it's still basically way overextended. It's just trying to hug the upper bull band over here. Hugging again, keeps going up, right? Form trying to form a high low over here. What is the U Japan market over here? Nikkei is doing. It went way outside the upper Bollinger band. It's simply tagging the upper Bollinger band here. There's nothing scary about any of these charts with the exception of fear itself.
Looking at Bitcoin, what is it doing? It's touching or getting near or maybe even waking down the 20-month moving average. Could it end up crashing all the way down? It, I don't know. It could, right? I have no idea. It could. Is the liquidity leaving the system? Do we have a global bare market for stocks, for everything? Um, to me, I'm not sure, um, if we're there. It's just, I, I'm not seeing the data for that. I want to say, say one last thing. It, I think it's having its Nvidia moment. I think Bitcoin hasn't touched the 20-month moving average here for over two years. Is finally doing it. Same thing here for Nvidia. Run up a lot. Not touching the 20 here to backtest. See whether or not it holds. It did it over here in April. Right. What did Bitcoin do in April? Eh, I'm good. You know, I, I think that this is the deleveraging event for Bitcoin. That just simply hasn't happened yet. And it has happened pretty much all throughout many different stocks, the indexes, international markets, and everything. Again, Bitcoin dominance is dropping, right? Bitcoin dominance is dropping. Bitcoin dominance is dropping. That is some thoughts in terms of maybe this is not a global, um, bare market where liquidity is leaving the system, but this is more potentially of a deleveraging event right into a strong support zone, maybe even go below that to scare people. And, uh, I, I, that, that's how I view it. Again, I'm not trying to get a bunch of bag holders here. This is just a point of view. I don't know what I'm talking about. I, I, I am not one of those that like to trade in and out. I like to buy things when I think that it's risk is low, and I just simply haven't seen the risk being high enough for me to get worried quite just yet because the Russell 2000 hasn't broken out, because Bitcoin has been just gone up from previous all-time high by about 80 something percent. I still feel that the risk justifies my own risk tolerance, and I'm holding, and I'm buying risk assets. There is no right answer for everyone, and I could very well be wrong. But darn it, I'm going to lay down my thesis here and make you listen to an hour video to try to get you to think. And if you disagree with me, I'm completely fine with it because if you're right, and if I'm wrong, I'm going to lose a lot of money. Thank you so much for listening. Um, I, I just wanted to share these things, and, uh, good luck to all of y'all out there. I know things are getting scary, and, um, I, I hope that, um, you guys find whatever it is that helps you. If you have a strategy that works for you, great. I think we are all trying to figure out our own strategies here, and I hope you guys have a great rest of the week despite of what Bitcoin and the market is doing because it's been extremely rough several weeks for a lot of you. But for those who end up sticking around for months and years, generally you do pretty well. Take care, guys. Have a good one. Bye.