Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin, and we're going to provide an update to the bare market resistance band. 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 intothecryptoverse.com. Let's go ahead and jump in.
So, Bitcoin's trading right around $77,000. And we've previously talked a little bit about like windows of weakness and windows of strength throughout the midterm years. One of the windows of weaknesses, the major one, is February, right? February kind of shows up every single time as a window of weakness for Bitcoin in midterm years. You'll see, you know, February of 2014, February of 2018, February of 2022, and February of 2026.
The next one after that is usually like late March, early April. Um, here's April of 2014. You've got April, early April of 2018. You also have, um, in 2022, it was later April that ended up being weaker. Um, and in this case, it was sort of early April where that higher low formed, kind of like 2018, in fact.
Now, the next one after that, May is usually not that weak in terms of like the monthly return. Uh, but but a lot of times going into June, right? If you look at June, Bitcoin tends to be weak going into June. That doesn't mean all of June is weak. It means that the sort of the kind of going into it. And that was kind of what got me into trouble, you know, a few weeks ago was I said, like, look for a low in early April. It could be a higher low. So, but but then people just sort of thought, all right, Bitcoin has to go lower in April. But the point is, is in midterm years, one of the major weakness points is June, right? June of 2018 and June of 2022.
Now, in 2014, you can see that you had a high that formed in early June. But even then, in the first week of June, there was a big drop. You know, back to that 20-week SMA, it formed a lower high in late June, and then we fell down into October.
Now, what I told you guys a week or two ago, I said that if June is going to be a low rather than a high, then we need to start dropping because if Bitcoin just continued to go up, right, then how could June be a low if it's just going up into June? But the fact that Bitcoin sold off the last couple of weeks raises, raises the odds a lot that you are looking at a potential low in June. Now, again, that doesn't mean it has to be a lower low. In 2018, it was a lower low, right? You had a low in February, a higher low in April, and then a slightly lower low in June. In 2022, it was a major lower low, right? Um, and in 2014, you know, it was it was a little bit different as we were back above the bull market support band, which you could argue is not that different from what we're seeing right now, right?
You know, back then when Bitcoin got above the bull market support band, what it did was it it got above it, it sold off, rallied, and then sold off again. What we just did was we got above it, we sold off. Are we going to see it rally for a little bit? It's possible. If it does, then it it would look more like 2014. But what I'm thinking is there is still a good chance that we we end up seeing that low form in June.
So what I would say is this. If Bitcoin falls below, back below the bare market resistance band, kind of like how it did in 2022, you see how in 2022 we got above the bare market resistance band and then we got right back below it. And it's also happened in other bare markets as well. Like in 2018, there was a couple times we got above it, but then we just kind of sold off right after it. 2014, we got above it, um, and it did take a little bit longer to get back below it, but we still did get above it. And even in 2019, you can see we briefly got above it, um, a couple of times actually, before falling back down.
So, look, if the losses accelerate for Bitcoin, and we just had two red weeks, and if they just continue to go down, then I would say look for a low to form in June, okay? Because a lot of times what will happen is a low will form in June and and then you'll bounce for a little bit into into like sort of the July, August time frame. If that doesn't happen and we just kind of stay elevated, then it it to me, it would be more likely to play out how it did in 2014, where even then, you still stayed elevated for basically all of July, and we didn't really start to see it move back down again until August. A lot of times July in midterm years holds up okay, and it's usually after a June capitulation.
Um, again, all this to me is just academic. I'm not like trading these specific ideas. I thought it made sense to offload the Bitcoin that you were wanted to offload back over here in late Q4, not to panic sell it late in the midterm year, but I still do think we will likely see Bitcoin head back down as the year goes on.
And, you know, I know some of the biggest counterpoints to this is like, well, what's going on in the stock market? Yeah, but the stock market going up the last several weeks already didn't stop Bitcoin from dropping, you know. So, and and the other point too is if you look at the valuation of Bitcoin against the stock market, you'll see that it it's gotten rejected by its bare market resistance band. And this is something that frequently happens in midterm years, right? If you look at midterm years, Bitcoin's valuation against the S&P frequently gets rejected at that 20-week SMA, 21-week EMA, and that's exactly where it just got rejected at. So, I think Bitcoin is going to continue to underperform the S&P 500 for at least a few more months and then probably start to outperform again, hopefully next year.
Now, you might say, why? Like, why is Bitcoin underperforming when the stock market is doing so well? Well, I think the stock market is doing so well primarily because of a lot of AI names are really helping the market a lot. Probably will continue for at least in the short term. Even the S&P M2 fractal would still say the stock market could even stay elevated even until September, um, and it not really be that different from what we saw back, you know, 26 years ago. Um, but I I will say the thing that I think people are missing is that the the S&P is going up because, you know, there's all these earnings expectations, all these companies. Crypto doesn't really have that. Crypto is more dependent on monetary policy and liquidity than it is all these other things that stocks are dependent on.
And so when you look at what's happened to monetary policy and expectations, we're looking, the market's starting to price in rate hikes. Now, I don't know if we're going to get it, but the fact that the market's pricing it in is bearish for crypto in general. And so if this continues to head this direction, it'll likely remain a macro headwind for Bitcoin for at least a few more months. Okay?
And and this could continue. We could see more rate hikes get priced in if if, you know, oil heads back up, if, um, if things over in the Middle East don't get resolved. Now, obviously, there's chatter about a deal, and I'm not really following it that closely to be completely honest. But I will say there is a good chance oil could still remain structurally elevated for the rest of this year. And I wonder if it's just basically waiting for that bull market to catch up before it continues back up. So, we'll see. I mean, I know it's it's selling off today, uh, but it's, you know, it's done that plenty of times over the last few months, and it's still way higher than it was, you know, back in in late 2025.
So, maybe the narrative for Bitcoin going lower would be that, you know, energy prices don't go back down right away and they stay elevated, and maybe they start to go back up in the third quarter. And if that's the case, then that would probably cause more rate hikes to be priced in, which would likely be a headwind for Bitcoin. And then perhaps by the end of the year, Bitcoin's priced in all that stuff, and then it can start back into a a bull market. That is at least my guess as to how this is going to play out.
I would have been amenable to an earlier, uh, to to the bull market starting sooner, but the fact that we didn't continue to see devaluation, um, after February makes me think there's still more to come. If Bitcoin just kind of bounced and then went lower into like May and June, then I think it would have already made sense to flip bullish. But the fact that it hasn't makes me think this is just like another bare market rally like the ones we've had in prior midterm years. I know it's not a popular view, and and a lot of people dunk on me every single week for it, but that is what I I think is happening.
Now, that doesn't mean Bitcoin has to go down to $10,000. I'm not saying that. It probably isn't going there. Um, but I I would still expect at least a sweep of the low, like kind of how it did in 2018, and and it very well could go below that, right? But I mean, that's sort of the next step would be at least a sweep of the low at at $60k, I think would be highly probable to happen within the next couple of months or so.
And if you think this time has been different, it hasn't been. If you look at the sort of the the amount of time it takes for Bitcoin to put in new lows in bare markets, in 2018, it took Bitcoin about 20 weeks, like 19 weeks or so, um, from that low to that low. And then the next low took about 21 weeks. You're talking about 20 weeks. If you look at the low that Bitcoin put in in June until that low was taken out, it was about 21 weeks. Uh, if you look at 2014, from this low in April to when we took it out, it was about, you know, 25 weeks or so. So it can take upwards of 20 weeks. We're currently on week 16.
And if you think about it, 20 weeks would put you in in late June, which is probably, you know, late June, I believe. That's the next Fed meeting, uh, June 17th. And the next Bank of Japan meeting is that same time, I believe. And if they raise rates, a lot of times what Bitcoin has done, not a lot of times, so there has been some precedent for Bitcoin to finding a low like a week after the Bank of Japan raises rates. That's actually what it did in, um, August of 2024, right here. The bank trend raised rates like right there, and then, uh, Bitcoin sold off, capitulated, and then it bounced.
So anyways, guys, those are my thoughts. We'll wrap it up there. Thank you guys for tuning in. Subscribe to the channel. Uh, check out benjamincan.com if you haven't. Um, and we also do have that direct access option under Into the Cryptoverse now if you're wanting, um, more direct contact. But we'll wrap it up there. Thank you guys for tuning in, and I'll see you next time.