Transcription
Okay, there is still one thing that is strange here. October is historically the best month for cryptos. In October, cryptos pump, that's a fact, we see it here, it's the best month of the year. And here, we are starting the month of October, it's only been 5 days and we are already in the red. Doesn't something shock you? Isn't it shocking that we are entitled to happiness in this crazy market? Usually, this kind of thing doesn't happen. Will the month of October quietly grant us what it owes us, the good old October that will bring us to higher levels for Bitcoin? We've even already touched a peak, so it's still quite positive. Or did it set a little trap in there? Well, that's what we're going to look at. I'll give you my opinion, but I think we're going to have a lot of volatility in October and I'll explain why.
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Okay, October is the best month. Fine. What really interests me is Q4. Q4, the 4th quarter of the year, is always the best for Bitcoin and cryptocurrencies. The big bullish phases, the famous alt seasons, happen at the end of the year. They never happen in the middle of the year. In Q2, Q3, it doesn't exist. It's Q4. That's when something happens. It's linked to the debt expiration cycle, which we've already talked about, which often occurs at the end of the year. In short, that's why I've had this thesis for over a year that the market top will occur in Q4 2025 or Q1 2026. And I'm sticking to this thesis, but I'm a bit more skeptical about the month of October. I think Bitcoin and cryptocurrencies haven't fully reset from the big pump we had on altcoins and Ethereum in July-August. Basically, to create my medium to long-term theses, I heavily use liquidity, liquidity cycles, debt cycles, etc. And for shorter-term theses, meaning what will happen in the coming weeks and months, I heavily use liquidations. And look here, we have a huge amount of liquidations of people who took long positions, meaning they are bullish on Bitcoin at certain prices. For those who don't quite understand, look, we see big candles at certain price levels. What does that mean? It means that, for example, at 11681, as soon as Bitcoin reaches this price, people who took long positions, meaning they bet on Bitcoin going up, will be liquidated at that price. And there's a large liquidation cluster that will liquidate over 6.79 billion dollars. And market makers love to target this level because it brings them a lot of cash, obviously. And so, concretely, we see that up to $110,000 on Bitcoin, there are over 15 billion in liquidations to be targeted. Can we reach this level? I think so. Historically, market makers like to do this, and it would make sense. It would allow for the final reset of what we saw in July-August, to screw over retail one last time. The market has been functioning like this since institutions arrived. We never have truly sustainable rallies. They are always rallies that go very fast to prevent people from entering, and then big corrections to ruin morale a bit and to get good entry prices. And so, I don't see how we would have a huge bullish phase like this, going from October to December, without any reason, and I think we can have quite a bit of volatility in October to target precisely these levels to have one last purge before potentially having that. That would justify the last bullish phase that could arrive in November, December, January, we'll see. That's why I expect us to have quite a bit of volatility in October, and it makes sense with my dominance thesis. We talked about it in the last video, Bitcoin's dominance has drastically decreased in the period between roughly June and September, and this materialized in the fact that Ethereum, as we see here, has outperformed Bitcoin for the first time in a very long time. And this is a bit what I expected in the last video. If you remember, we have a resurgence of Bitcoin's strength compared to altcoins, and you can see this if we take a look at CoinMarketCap. Bitcoin is going to challenge its ATH, $123,000, $124,000, while altcoins are just recovering from the small correction we had. We don't have huge price levels, Bitcoin is leading the market. So the question we can ask ourselves is, okay, what can we concretely expect next for Bitcoin, and especially for altcoins, because I think many of us are positioned in altcoins.
In fact, I took a little look, and it's a pattern that's quite recurrent. Look, in 2021, we had roughly the same scenario where dominance dropped. So, Ether outperformed Bitcoin during that period, which hadn't happened for a long time. And then, we didn't have a big increase in dominance, we had a sideways movement where, okay, the market took time to breathe before the last big liquidity drop, which materialized as a decrease in dominance and the start of the famous Altcoin Season. You can see it. Look, if I add XRP, you'll see it immediately. Look, from this point on, there it is, we see it clearly. I added XRP because it clearly represents altcoins. This is when we really had an outperformance of alts compared to Bitcoin. And honestly, even in 2017, we have a somewhat similar pattern. It's a bit less obvious here, but we had a drop then a rise in dominance before the famous liquidity drop and altcoins performing. If I add XRP, boom, we see it here. XRP, which didn't exist while Bitcoin was in full ascent. We see a large sideways movement. I'm using XRP because it represents altcoins somewhat, it's a good image. And then at the time of this famous liquidity drop, so after the drop, then rise, then drop in dominance, that's when we had the big performances and the famous altcoin season. Obviously, what happened doesn't mean it will happen again, but we still have a pattern that is emerging and is quite interesting. But in any case, if the pattern continues in its direction, it would mean that Bitcoin could continue to gain a little strength before the last liquidity drop, in short, the decrease in dominance and the famous altcoin season that we are all waiting for, and a moment when liquidity flows much more into alts.
The question we can ask ourselves is, are we at levels close to a period of extreme euphoria? Well, personally, I don't think so. If we look at Block Unity, we have this wonderful social analysis indicator. It's simple, but basically, it's the spikes in new subscribers on major crypto YouTube channels based on Bitcoin's price. So, you see in purple, it's the evolution of the number of new subscribers, meaning new people who are coming, which often represents the euphoria phase, and the price of Bitcoin. And we see that every time we are in periods of local tops, there's always a spike in subscribers. The ultimate debate right now is, yes, but retail won't come. They're no longer here, they've understood that crypto wasn't good. Okay, but actually, there was exactly the same debate in September 2024, and we saw that with Trump's election and Bitcoin's halving, retail, in short, new investors, arrived. So honestly, I don't see why it would be different from December 2024. What happened for it not to be the same? Nothing. And if we look here, we are at totally normal levels, even decreasing. People are not interested in a new Bitcoin ATH. It will take a big parabolic rise, a Bitcoin breaking $130,000, $140,000, to have this famous influencer spike that I will personally follow closely. And again, I insist, these are my theses that I'm giving you. If you think there won't be any new retail, you might be right, and good for you if that's the case. But for me, I'm following this indicator to see a bit when we will be in this famous mania phase that materializes and often arrives, look, when we have big slopes in the evolution of Bitcoin's price. So we need a big candle, a big parabolic session, which could happen with potentially new price levels that would bring about the famous euphoria period. I think it will happen very quickly, and when we reach these euphoria levels, we'll need to be quite reactive in taking profits. But honestly, for now, there are some altcoin charts that I'm following that show no signs of reversal, or Solana, which is flirting with its ATH levels that it tested once, twice, and which I think once they are broken, if they are broken, will allow Solana to go much higher. Ethereum, which necessarily needs to digest this big rise we've had since April, globally with a good old x3, a x3 on the second largest cryptocurrency. Of course, there's a need for management. I think Ethereum will go higher than its ATH. It will mark the beginning of the altcoin profit-taking season, if we want to call it that. But Ethereum needs this sideways movement, this digestion, but honestly, for now, I see no signs of reversal that would make me say that we are at extreme levels for altcoins.
If we take a quick look from a macro perspective, what's happening? The Fed's pivot continues to be initiated. We're going to have an easing of the economy that's further materialized by the kind of news we can receive. There were apparently errors in the August employment figures, which were supposed to be +54,000 and ended up being -3,000. So the American economy is in a slightly more urgent situation than expected, and this is materialized by the number of rate cuts we should have, which has increased even further. We were previously at 85-90% probability of a second rate cut at the next meeting on October 29th. Now, we have 96% and 86% probability of a third cut by the end of the year. We should have the ideal scenario, meaning three single cuts of 0.25 at the three meetings, which is extremely favorable for liquidity and therefore for risk assets. And we talked about it in September when it was the famous big show of rate cuts. Rate cuts are a lot of noise because people often confuse the impact on finance and the impact on the economy. The impact of rate cuts on the economy is very complex. These are really mechanisms that are difficult to understand, to see, to grasp. However, for finance, rate cuts are favorable for markets. And as investors, that's what interests us. What's quite interesting is that we have a Fed pivot, meaning a rate cut, at a time of market ATHs. And that's quite rare. The S&P is at its highest level, and the Fed is pivoting to cut rates, meaning monetary easing. And this has happened six times historically in the economy, and it has always been positive for markets, except in 2007 where the scenario was very different with subprime mortgages, but it has always been positive for markets to have a Fed pivot during periods when markets are rising or close to ATH over a year. It's always extremely positive, and I don't see why it wouldn't be this year. We can add to this the fact that we are at the end of a liquidity cycle. Liquidity is cyclical because it depends on debt expiration. And so, the closer we get to the expiration of a lot of debt, the closer we get to the cyclical liquidity top. This cycle is about 64-65 months, and the biggest gains in cryptos are made during market cycle top periods. So for me, things are aligning for us to have a good end of the year and potentially a good Q1 2026. In any case, nothing invalidates this thesis. You shouldn't have huge levels of certainty in markets. We've understood that we need to be humble, but I don't see any signals that are currently invalidating this. And believe me, I pay very close attention to spotting them so as not to fall into a confirmation bias that isn't very useful. I've created a small graph that I haven't seen elsewhere, which is very interesting, on the amount of debt that is expiring based on periods, and we see that, look, we are here. So late 2025, 2026, 2027 are years of huge debt walls with enormous refinancing coming. So, naturally, Trump and politicians want low rates to be able to roll over their debt, but we are approaching periods where all the money we printed like crazy in 2020-21, the debt that was created is expiring, and we will have to adjust. I think this could materialize a liquidity top in this period of 2026, and we could potentially see a very good year 2026 for financial markets and perhaps a dip in 2027-28, to be seen, these are more long-term predictions that will also depend on other factors.
A quick point also on Bitcoin relative to global liquidity. Here you have liquidity with a 108-day lag relative to Bitcoin. We see that the correlation still exists. I've seen quite a few people talking about it on Twitter, saying no, the correlation no longer exists. I still think that if we take just this part, we could almost believe it's the same chart. So Bitcoin continues to follow liquidity. Here's how liquidity could evolve going forward. We'll monitor if Bitcoin could evolve. In any case, this could make sense with this potential theory of an October month that could bring a lot of volatility because we are at volatility levels on liquidity. It's not the only element to consider, but it's still always interesting to see that this correlation still exists.
A small aside before finishing, I've seen that many people are watching the videos but are not subscribed. And I understand, I almost never subscribe myself either. But believe me, when you make videos, the most rewarding thing that can exist is for people to subscribe. It literally takes one click. So if you like the videos and you want to take 10 seconds to subscribe, I would be really very happy.
The last point of this video, a bit more based on the psychology of investing. In reality, we are all positioned in the same altcoins with more or less similar entry points. And the difference to really try to extract money from this market isn't really made at these levels. It's made in 5% of the time, which are the most extreme periods, whether upwards or downwards. And if there's one thing I've understood, it's that it's extremely important to prepare for how we will react when we reach these extreme levels. How will we react when we are in very high volatility levels where we are a bit overwhelmed by euphoria and we tell ourselves that it will only go up? Will we make the right decision, which is to start taking profits, or will we get caught like most people and get swept away by the wave and get hit by the downturn? On the other hand, it's exactly the same. In crash zones, as could also be the case here, as we saw in April, how will we react? Will we sell? Will we panic? Will we just leave, or will we succeed? And it's very hard to allocate the cash we have available. And I really urge you to cultivate this plan and this strategy of how I react in the 5% most extreme moments of the market and to really try to create scenarios in your head because that's what will make the difference when you are there. If you've never thought about it, and then we experience a huge rally, and I wish it for Solana, and Solana reaches much higher extreme levels, we will reach enormous euphoria levels, and if we've thought a bit about how we manage to react in those moments, I think we will certainly make much better decisions than if we find ourselves a bit caught in the tide. And then similarly, if we have a bear market and we go down to much lower levels, how will we manage to react at those levels? The difference is really made there. We can do all the analyses we want on liquidity, on the Fed, on whatever you want. If you had bought Solana or any other altcoin that continues to perform during these bear market periods of 2022-2023, you had a very good entry point, and you didn't even need to look at anything, and you were taking profits like now, and you were excellent, and you had made your x10 minimum. And that's why it's very, very important to cultivate this. The best thing, I think, in any case, is what I do, is just sometimes to take a piece of paper and write down if we reach this level. This is how I think I will feel, because it's very emotional. Bull and very bear markets are very emotional. This is how I might react, and the mistake would be to react like that. For example, not selling. This is how I should react if I spot these elements a little. It's psychology, but it's extremely important. Take care of yourself. I hope this video helped you. This was IL. Ciao!