Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin, and we're going to be discussing how it has now, finally, after all this time, closed a weekly close below the 50-week moving average.
If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the sale on Into the Cryptoverse Premium at into the cryptoverse.com. I really want to do like an hour-long video and go through a lot of thoughts. Uh, but I just got back from Amsterdam. I was at the Bitcoin conference there. It's, it's not even that late, but I've been up for a really long time. So, I'm gonna keep this one short, and then tomorrow, I will do a longer video.
But, I do want to at least bring up the fact that Bitcoin had a weekly close below the 50-week moving average and, and just kind of say, um, again, historically, that's not a good thing. Now, again, I don't control the market. You don't control the market, as I've said before, right? Trade the market that you have, not the market that you want. And there's obviously some nuances to it, and we're going to cover those in more detail tomorrow because it's not like the exact same thing.
But when you look at all prior Q4s of all prior post-halving years, when you get weekly closes below the 50-week moving average, it historically has meant the cycle is over, right? That is what has historically meant. And again, this is one of those things that like you can't really dispute that, like it's just a fact that when Bitcoin gets the weekly closes below the, the below the 50-week moving average in the post-halving year, it then sets up the drop to the eventual 200-week moving average. Now, last cycle, we went below the 200-week moving average. Does this cycle do we go below it?
Here's the thing. The bears have a solid case. They do, right? And we've talked about this for a while that when you look at the ROI from the low, you have to, it, it has to be an outcome you consider here because, you know, when you look at it, Bitcoin topped right around the same time that it always does when you measure the ROI from the low, or if you measure it from the halving. Right? You measure it from the halving. That's also, you know, you could argue, hey, why would you expect too much more when it tops when it always does? Okay. So, that's true.
It's also true like the bulls are saying, well, hold on a second. We didn't have a euphoria phase, right? Like, you know, none of the indicators that you would have expected to top or to signal actually went off. It's been sort of a slower move up. And that's why I've more so compared this to sort of what happened in 2019, right? Where we don't top on euphoria, we top on apathy. And if you don't know what I'm talking about, if you go look at the social risk, social interest in crypto, you can see that we've more so topped on apathy like 2019 rather than euphoria like 2017 and 2021.
So, what I'm thinking, first of all, is that there, there needs to be a little bit of wiggle room, right? I've said two weekly closes is, is kind of what you want to see for confirmation. There was some time in 2019 where we got a weekly close below and then we got right back above it the following week and then we kind of hung out at the 50-week moving average and then eventually we moved up again and then the market crashed, right? I would say at this point, given the fact that we've closed below the 50-week moving average and given how late cycle it is, I would say there's probably a 60 to 70% chance that the top is already in. Okay? About a 60 to 70%.
Now, listen, at the end of the day, we just had a death cross. There's plenty of times where death crosses mark local lows within a few days. Um, so I'm not like, I'm not asking you to go make rash decisions, but it is something to keep in mind. Like we're all adults here. It's just something to keep in mind. And to remember that bear markets are a normal part of the cycle, right? Like they are. They happen. They've happened every single midterm year. 2014, 2018, 2022. Could this just be setting us up for 2026?
You know, you could have a scenario where it does like what it did last cycle where it drops at the end of the post-halving year and then at the very beginning of the midterm year, it rallies for a little bit, you know, back up to the 50-week moving average. I think that's a possibility that that absolutely could play out. I do want to draw your attention to the death cross and to know there are times where Bitcoin finds a low around the time of the death cross, right? I mean, it happened earlier this year, uh, and it's happened many, many times. So, I, I, I want to like, I, I don't want to ignore that like the bulls have a point that hey, a lot of times Bitcoin finds a low around the time of the death cross, but at the end of the cycle, it doesn't have to. That's the hard part. Like there are times where at the end of the cycle, like people wait for the death cross rally, it doesn't happen. You get kind of like a small little rally and then it dumps further. People panic sell and then you get a rally up to the 200-day moving average.
So, I want to draw your attention to that. If the top is in, if the top is in, then you would expect at some point a rally back up to the 200-day moving average, right? Like it's happened every single cycle. It also even went above it in 2019, but we tend to get that rally back up to the 200-day moving average at some point. And note that we're, we're pretty far below the 200-day moving average right now. But I would guess that at some point, if the top is in, Bitcoin would get a rally back up to the 200-day moving average, right? That doesn't mean it can't go down first. I mean, it could, but the 200-day moving average, I'm going to guess will come into play regardless of whether the cycle top is in.
So, here's the way I'm thinking about this market, and I'm just being honest. I'm not trying to like pull a fast one on you or anything like that. I'm just saying like how I'm thinking about it. I think that next year will be a down year, right? Like I, I think it, it will be down even if the very first part of it starts off like if it goes down a little and then goes up for a couple of months. Like that's possible. Did it in 2022 as well. But I do wonder if there's a way where both sides can kind of claim credit here where the Bears have a point like in terms of, in terms of like when we top, we normally top in Q4. They have a great point and you can't ignore it. Just because you want to. Why can't that be the top?
There does exist a scenario where you have a bear market and Bitcoin drops, but maybe it, it's like the 2019 move, right? Like where it, it drops, and we're going to exclude the pandemic drop for now, where it drops like 50%. Right? Where you get a 50% drop back to the 200-week moving average around 60 to 70K and then maybe things start to pick back up after that. Now, a lot of times the bear markets are 70% drawdowns, 80% drawdowns, but I just want to throw that, throw that out there where, you know, it's possible that you get this like correction back down and it ends up being a bear market, but you've had diminishing losses each cycle. I mean, I would generally expect a 70% drawdown, but I would also generally expect a 70% drawdown to happen after a euphoria phase, not after sort of apathy, if you will. So, that's kind of interesting when you think about like how the market has, has behaved right now.
So, what I'm looking for essentially is you've already had one weekly close below the 50-week moving average, right? And considering how late cycle we are, we have to start, you know, you have to start thinking about, hey, like we, we can't just talk about it as hypothetically. Oh yeah, we know that could be the top. Like there is some evidence. Um, there's really some evidence starting to mount.
Now listen, I don't like, like flip back and forth very much in my views. Is like normally I just have a view and I stick with it and I don't like, like I don't change my mind every week about how things might play out. But I will say, you know, if, if Bitcoin gets back above the 50-week moving average this week, then I would be forced to then say, okay, maybe we're back to 50/50, right? So like if Bitcoin were to rally back up to 103K and get a weekly close back above it, maybe it is just a fake out. I mean, in 2019, on the first week we closed below the 50-week moving average, the next week we rallied right back above it, you know, and eventually it did lead to another rally. It didn't lead to a new high, but it did lead to a new, another rally. Uh, that I mean, honestly, if you look at the actual percent move of the rally from the low, it was 60%. Obviously, if Bitcoin would go up that much, it would actually put it at a new all-time high. It goes to show you just how big those moves were back then when the market cap was smaller.
So, I don't want to get like overly deterministic here because like I, I do see a case from both sides and, and the next video that I do, we're going to do sort of the infamous, uh, the bear versus the bull case where we go through the intricate details of the bear case and the bull case. Um, obviously with the weekly closes below the 50-week moving average, it, it has to make you question things because it's Q4. Remember what I said all year long, do not be complacent in Q4 because normally Q4 is when the cycle tops. So again, the Bulls have a point. It's not like we topped on euphoria like normal.
But if we were to really bring this 2019 comparison home and follow it through, then you know perhaps the way it plays out is we get a drop back to the 200-week moving average. And that just ends up being kind of how it played out last cycle with respect to monetary policy because remember last cycle Bitcoin topped out a few months before QT ended. So who's to say that can't just simply happen again? Like maybe it tops out a few months before quantitative tightening ends. It slowly drops down to the 200-week moving average and then gets a big bounce off of that. Now, the 200-week moving average is only 50% below the all-time high, right? Like it's not an 80% drop. It's not. So, that's something to think about.
I want you guys to keep that in mind. I don't really have anything else to say. Tomorrow I'll do a longer video and we'll go through, you know, a lot more of of the intricacies of the bull case versus the bear case and, you know, kind of how the probabilities lead. If any of you guys follow the prediction markets, like the probabilities for things are constantly changing, right? They're constantly changing. So, there's not really like a, a sure thing. I know a lot of people are convinced that there is a sure thing and that they know exactly what's going to happen, but the reality is is like no one actually knows. Like no one actually knows. Bitcoin could go to 80K tomorrow just as likely as it could go back up to 100K. You know, no one actually knows. We're all just guessing.
And, and so again, I don't flip-flop very much in my views, especially like on a weekly basis. But I will say if, if Bitcoin were to go back above 103K by the end of this week, then I would say the odds go back to 50/50. If you get a second close below, the odds go up considerably that the top is already in. Doesn't mean you can't have a rally. It just means it would likely yield a lower high.
By the way, one more thing. If the top is not in and the weekly close below the 50-week is a fake out, which we can't assume that at this point. We have to assume that it, it means something. But if it is just a fake out, you would expect a rally by Bitcoin within the next day or two. Like this is not something we can just sit around all week. Because what I've seen happen before when death crosses happen and the cycle's over, what happens is, look what happened in 2022, right? Where you have like a little rally, but then it doesn't actually go up and then you get a bigger dump. Like you get another dump and then you get the rally to the 200-day moving average and then it marks the macro lower high.
So here's the thing. If the cycle is over, you would only expect a small rally around the death cross. And after about a week, people are going to give up waiting for it. And then you get a deeper drop and then a rally to the 200-day moving average. If the cycle is not over and somehow miraculously Bitcoin is able to go to a new all-time high, you would expect a rally within the next day or two because people are going to stop. People aren't going to wait around forever. You know, they're just not. They're going to come to the same conclusion that everyone else is coming to and they're going to sell.
So again, every single death cross this entire cycle, every single one, the low happened within a couple of days. Some days it was a couple of days before, sometimes it was a couple days after, but they all happened within a couple of days. So, if the cycle is not over, Bitcoin should have a sizable rally within the next few days. If it does not, and we're still hanging out at these low prices by the end of the week and you get a second weekly close below, it doesn't mean you can't have counter-trend rallies, but the odds of the cycle top being in go up considerably.
So, those are my views. Again, you have to respect the market that you have, not the market that you want. If this is, you know, if, if we are really going into the bear market, uh, which normally drops below the 50-week estimate this late in the cycle would suggest, then that 200-week moving average is going to be the focus for the next few months. Okay? Because normally we kind of drop back down into that. It would also maybe correspond to Bitcoin kind of back-testing that trend line sometime out in like mid-2026. So certainly an outcome that we have to consider here.
Um, and I, I think we'll wrap it up there. Thank you guys for tuning in. Uh, make sure you subscribe, give the video a thumbs up, and again, check out the sale on Into the Cryptoverse Premium at into the cryptoverse.com. I'll see you guys next time. Bye.