Bitcoin's Next Big Move Might Have Nothing To Do With Bitcoin... We Have Waited 1,093 Days For This

Source: YouTube

Introduction

Speaker 1: 0:00

Bitcoin started crashing, and everyone was asking themselves, “Was this all just a massive fake-out?” There's a report that highlights how different this cycle is relative to others. The bond market doesn't really make sense. There are so many things going on right now that half of it could be enough.

In today's video, you're going to see the large position that I have just put on Bitcoin, the levels I'm watching, and exactly what I'm going to do with my money. Before we get into the boring but important data, let's have a look at Bitcoin on its own.

Bitcoin support, resistance, and the current trade

Speaker 1: 0:26

Ever since the high we put in, Bitcoin made a low about 8.2 away. Here's the thing, ladies and gentlemen: if you've been watching this channel, you know how much I was talking about this level as a potential very, very strong support level. Yesterday, we actually ended up hitting that perfectly. We've already started to see the market reverse, and this right here is the area which I am paying attention to next.

I want to see Bitcoin break the downtrend that has existed since early October. But more importantly, this level right here is extremely strong. Not only is it the value area high, but it's also the point of control, and we have the 50 simple moving average that Bitcoin used as resistance when we had the last flash crash towards $80,000.

It is obvious that this is a massive resistance level. If Bitcoin can end up breaking this, I don't think we'll come back down. But there's a chance Bitcoin won't.

I don't just talk the talk; I walk the walk. The level I gave you all publicly many, many times on this channel, I actually took a long from. Currently floating about $3,000 in profit. My break-even level is that extremely strong resistance level which I just showed you, and I have my take-profit right now at about $90,000.

Telegram group and exchange offer

Speaker 1: 1:45

If you want to know pretty much my every move, then you can join my free Telegram group. It's literally entirely free, and I post videos like this one where I give you market outlooks. I post my trades, and eventually we'll do private Sunday meetings. If that's of any interest, it's literally free. Check out the link down below.

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Exchange access and order-book liquidity

Speaker 1: 2:42

Oh, and FYI, if you're in the US or Canada, all you have to do is enable a VPN.

Part of the reason why I decided to long Bitcoin from $80,000 was, first of all, because we had a massive buy order. There was just an immense amount of liquidity buildup right at $80,000. As price was selling off here, I anticipated, ever since the top of this consolidation, that it was going to revisit $80,000. I was prepared to take a long from that area, which is exactly what I did.

It is also an area—you can see all these green and red bubbles—where a lot of trading volume took place. That's often when we can expect a reaction.

Right now, there are two potential scenarios for Bitcoin. Obviously, it's going to go up or down. But if we have a look at the actual buy orders, you can see at $78,000 and at $75,000, we have relatively large buy orders. Could that suggest that Bitcoin is going towards $75,000? Yes. Do I think it's going to happen? Not necessarily. Why? Because if we have a look out here, have a look at how much liquidity there is to the upside: $90,000, $95,000, $99,000, $100,000, and it just gets worse and worse.

We have so many sell orders resting above $100,000. $80,000 was the worst one. That was the largest buy order that has now been liquidated. Therefore, depending on the macro environment, we can hope for a push towards $100,000 at any given moment.

Inflation, falling yields, and financial stress

Speaker 1: 3:57

Recently, we got the PPI results, and they were not as great as one could have hoped. You can see that the Producer Price Index for final demand increased 1.3% in September. That's quite insane.

What we can also see is, on an unadjusted basis, the index for final demand climbed 6.3% for the 12 months ended in September, which is the largest 12-month increase since moving up 6.4% in December of 2022.

This suggests that inflation is starting to spread beyond energy. Before, it was mostly concentrated in energy due to the supply disruption in the Middle East, and that was more manageable. But now, everything suggests that inflation is starting to spread beyond energy and throughout the broader economy.

But then something very weird happened, because this was supposed to be incredibly negative. Yet, for the first time this year, the yields—both the two-year yield and the 10-year yield—are crashing. The 10-year yield has gone down approximately 6%, and the two-year yield has gone down approximately 5.6%. Following the report, they both crashed additionally, and more specifically the 10-year yield, which was the one that seemed impossible to correct.

Why did the yields collapse if inflation got worse? In my opinion, it's because the bond market is concerned about financial stress elsewhere, and particularly, in my opinion, debt-heavy AI companies like CoreWeave.

If we take a look at CoreWeave, we can see that these standouts were five-year CDS spreads for CoreWeave, which blew past 1,100 basis points according to the S&P Global Market Intelligence data. Its bond yields rose to as much as 16% before retreating to around 14%. This right here is typically a benchmark for extreme stress.

Here's what you have to understand: Treasury yields falling because inflation improves is totally different from Treasury yields falling because investors fear financial stress. The former is generally favorable for risk assets, and the latter can initially be dangerous.

Nevertheless, despite the inflation surprise, we also saw a decrease in the October rate-hike probability. When the core CPI and CPI earlier this week came in a lot hotter than anticipated, this briefly went from 18% all the way up to 44%. Now it has made its way all the way back down to 16%.

But here's the thing: the December probability has increased from about 84% to 90%, which is negative. What we have to hope for is a more dovish tone during the October meeting. That would almost certainly change the December meeting probability. I don't find this an accurate number just yet, because this almost always changes entirely depending on what is being said during the previous meeting—in this case, the October meeting.

The macro environment remains dangerous. I'm sure we all know that. But yields and the dollar are finally able to give risk assets some breathing room—well-needed breathing room.

Realized price and long-term holder losses

Speaker 1: 6:53

What's fascinating is that Bitcoin's underlying holder behavior was already changing before any of that happened. This cycle, Bitcoin did something for the first time, which is something we have literally never seen before.

The Bitcoin bear market has historically followed a script. They all had a closure below the realized price. You guys can see that the bottom here in 2019 closed below the realized price. We saw it again here in the last cycle, 2023: it went below the realized price, and then we saw the bull run. But we didn't see that this time around. For the first time, Bitcoin started a bull run without closing below its realized price.

But what does that even mean? In order to understand that, we have to look at this: long-term holders have largely stopped selling at a loss. Their realized loss peaked on August 12 and has since fallen by about 85%.

This suggests that the capitulation phase has already cooled substantially, even though the macro environment remains incredibly hostile. While this may, in some eyes, be negative, it actually isn't. It's incredibly positive because it does suggest that the vast majority of the capitulation is past us. It's already happened.

Dollar resistance and the trend line to watch

Speaker 1: 8:01

As I said just moments ago, the dollar is finally giving us the breathing room that we were waiting for. This level is something I called months in advance. I said, “Expect the dollar to go from this low to this resistance level.” We got that. Then I was hoping for a reaction lower from this resistance level forward. If you've been watching the videos, then you know exactly what I'm talking about.

The dollar finally arrived. It's been about a week there consolidating. But now it has hit the resistance level and also the 200 simple moving average, and we are seemingly pulling back.

If the dollar can continue this trend, and it can continue to go lower, what I'm watching for next is the 50 simple moving average, but more so the trend line that has previously sent the dollar up literally every single time it tried to break it. What I'm looking for here is a break of this trend line. If that happens, I think Bitcoin is in really good hands, especially if the yields can continue falling.

Downside support and the gamma-flip threshold

Speaker 1: 8:58

Let's talk about the worst-case scenario for Bitcoin. Not that I think Bitcoin is going to go there, but in case it does, then you're all prepared, and you know exactly what I am going to do.

One thing that Bitcoin hasn't done this cycle, which it has during other cycles, is retrace towards equilibrium, which is the 50% level of the entire range. This is typically how Wall Street evaluates an asset. When it's trading above equilibrium, it's a premium. When it's trading below equilibrium, it's a discount.

Even during extremely strong markets, you will often get these pullbacks towards a discount. People will buy the asset in discount, and it will continue the uptrend. That is very, very normal market behavior, and it is something that we could expect. Does it mean it's going to happen? No, and I certainly don't hope it will. But in case it does, then you know exactly what level I'm watching.

The 200 simple moving average also remains very, very close to equilibrium. Overall, this is a very strong level, in my opinion. If we go back here, you can see this massive, massive order, both sell and buy order, which happens to overlap almost perfectly with equilibrium we're looking at here. In my opinion, this is one massive support level. I will be looking to add a lot more to my Bitcoin longs if we end up dropping all the way down here to the low 70s.

But again, we're not talking about a sentiment shift at all. Bitcoin is actually holding up the 50 simple moving average extremely well. Right below that, we have very, very large volume nodes, which can also act as a massive support level.

I think as long as Bitcoin holds this level between $80,000 and, let's say, $77,000, I wouldn't classify any of this as a sentiment shift. In fact, I wouldn't call it a true sentiment shift until Bitcoin starts violating equilibrium here. If we start moving towards the mid-60s, that's when I would seriously consider this a sentiment shift.

There's one level on Bitcoin right now that I am watching closer than anything, and one level that we seriously hope Bitcoin can hold. That, ladies and gentlemen, is the gamma flip at $79,750.

Positive gamma, downside acceleration, and the $90,000 level

Speaker 1: 10:59

Right now, Bitcoin is trading within positive gamma. What happens when it's trading within positive gamma is that dealers are going to buy the weakness, and they're going to sell the strength. This causes price suppression, but it's not a bad environment to be within when you're expecting an uptrend.

As soon as this flips, they are going to be selling the weakness and buying the strength, which means the moves are going to be much more aggressive, and they're going to be much larger.

Because the flip currently sits beneath price, if Bitcoin drops below $79,750 and stays there sustained, then we can expect whatever downside comes following that is going to be much more aggressive. Ideally, we hold the level of $79,750.

We still have the massively positive GEX level at $90,000, which can also be another reason for Bitcoin to want to move higher once again. Previously, we had the put wall at $80,000. That has now been completely wiped out. We can only hope that $80,000 was the bottom and $100,000 is next.

Holder break-even levels and the macro caveat

Speaker 1: 11:57

What I'm personally looking for to determine this is a very specific level that I believe a lot of people have missed entirely. What I'm talking about here is the orange line that you're looking at here. This represents people who bought Bitcoin six to 12 months ago—short-term holders, if you will.

You can see the last time we tried to retest this was earlier this year, and price got rejected. Then we tried to retest the more long-term holder break-even price, which, again, is people who bought Bitcoin within the last one to two years, and it again got rejected. You guys can see that we're now approaching those two levels again.

The first level I'm paying attention to is $87,700. If we can break above that, great. I think demand is obviously a lot stronger than it has been previously when it got rejected. If we break that, then I think $100,000 is imminent. Whether we go higher from that point forward depends on whether we can close above the level $99,500.

Ladies and gentlemen, the macro environment is still extremely rough. Yeah, Bitcoin has held up tremendously well. In fact, it has held up much better relative to the stock market as of recently, but Bitcoin is not immune. If inflation continues to run higher, and if there's no solution in the Middle East and that continues to worsen, then Bitcoin will inevitably get hit.

Monitoring risks and closing remarks

Speaker 1: 13:14

There are a few levels that I'm watching within the yields, as well as the credit spreads. If you want to know exactly how I'm moving forward with this and how I'm going to prepare for this in case it does happen, then make sure you join my free Telegram group. I'm sure I will also end up talking about it on this channel if we do end up seeing that. Joining the group is entirely up to you.

But, ladies and gentlemen, you now know exactly what I believe about Bitcoin, what levels I'm watching, where I'm long from, and what signals I'm waiting for to confirm whether Bitcoin is going much, much higher or not.

I hope you enjoyed this video. If you enjoy my content, if you enjoy the analysis, I put a lot of hours into this. What I do here is try and separate myself from the usual, very, very loud influencers that look at data that simply do not matter. I take my time with my research. I've studied macroeconomics for years, and I apply it within the crypto market.

If you enjoy this content, then please like the video, subscribe to the channel, maybe even leave a comment. It would help me out a lot, and it's entirely free. If not, then that's okay. All you have to do to make me satisfied is show up in the next video.