$8K Is Bitcoin's Next Target, But Will a Plummet to $3K Follow? | Charlie Burton & Clement Ip

From a market sentiment perspective, I've been trading 20 odd years and I've seen many manias over this time.

Who's coming in buying bitcoin right now? That's my biggest question.

Could we see a second wave in the stock markets? Maybe not with the same ferocity that we saw back in March.

What's up, YouTube? My name is Jackson. Today I'm here with trader Charlie Burton and co founder of Genesis Block. Hong Kong, Clement ip. How's it going today, guys?

Very good, thanks. Nice to see you.

Thanks. Yeah, great. Thanks for having us.

Awesome. So bitcoin recently broke above 7k and seems to be holding for now with this move, Bitcoin broke the key level of 6800-6900 identified by Michael Vanderpop a couple weeks ago.

What I want to see with the.

Price right now is just that we reclaim, reclaim a previous support level which is 6869.

Until we don't do that, I expect further downside to come.

It's just pure technical levels.

Do you believe bitcoin will continue its upward momentum? Let's start with you, Charlie.

I mean, do I think that 68 to 6900 level, it's okay. It's this sort of zone down here. I still think there's more. The market needs to do more yet before that really becomes that important. If I just put a pen up here, this is the sort of area we're talking about here. It's only just popped its head above there. I think that just a few days. This is a daily chart here. I don't think it means too much for me. Bitcoin would really need to go a bit higher before it becomes anything much more significant. I still think it's got a bit further to go before. I would say that it's out of the woods certainly at the moment, especially as it seems to have been moving in sync with the US stock markets with like the S and P and the likes. We're seeing this correlation there and at some point they'll probably do another bit of a pullback and we'll see how bitcoin reacts then as well. But you know, it's encouraging signs certainly that it's popped up. But I would like to see it well above 8,000 before I start getting that excited.

Clement, do you see bitcoin continuing its upward momentum?

Yeah. So I mean us at Genesis Block, we run an OTC desk and we have a prop desk as well. It's just been really weird the last couple of weeks. We haven't seen a lot of flow coming in, especially in Asia. We're based in Hong Kong. March was a great month for us. A shit ton of volatility. It went down all the way down to like 4K. And we did see a lot of people coming in buying bitcoin. Queues were starting to ramp up on ATM machines. But the last couple of weeks this run up has been really, really quiet. We've been speaking to other big desks as well and it's just been extremely quiet. Even with people trying to move money with like tether or using bitcoin. Like it's just been really quiet because of the coronavirus. So don't know, like, I mean I'm not convinced. I think if I had to put a bet on, I don't think we're going to head towards like any anything further. Maybe we'll come back down at 75, that's my guess. But I'm on the sideline right now.

In our previous crypto market discussion, CEO of CoinRoute's Dave Weisberger said that bitcoin could be forming a bottom at 6 to 7 in the 6 to 7k range. I think we're in the process of.

A BO bottoming process in the 6000 to 7000 range.

Do you think that bitcoin is currently.

In the process of bottoming from a market sentiment perspective? I've been trading 20 odd years and I've seen many manias over this time that it's like this second wave where it will suck a load of investors in again, only to then see what happened after sort of July time of last year, the bitcoin cat hold off again and that might have been that second wave which enables a lot of other people to throw in the towel and then you get your hardcore who will stay at it. And I think that's possibly where we're at now and we are in a longer term bottoming process. So yes, I believe we are. But what I would like to see, I've put a trend line on my chart here and I would love to see bitcoin get above there. So if we just said roughly 10,000, we get above there and I think it's a way but I think when I was last on I was sort of saying that this could be like a year to 18 month formation process. I don't think it's going to just take off and just go straight for the hills at all.

Clement, what's your perspective on this idea of bitcoin's bottoming process.

Specifically on 6.7k. I have some concerns here. I mean, we have havening coming out in around 40 days. I think a good benchmark would be litecoin. If you look at litecoin, I think there's a lot of hype coming up in this whole halving thing. Reality is, I don't think this third halving is going to have much effect. We're going to be down to 900 coins production a day. What I really like to see is more people come in the space. When we saw 2013, that was really fueled by the Chinese, and then 2017 was the Koreans, that created a huge arbor charge opportunity. And that's where a lot of organic flow really comes in. I think this entire year there's a lot of people doing futures trades. But reality is like new people coming in the space is nothing compared to like what we saw in 2017.

So.

And saying that, like, I think with all the futures, there's so many futures exchanged now, in my opinion, I think manipulation is also a lot easier. So it really depends on this whole coronavirus thing as well. I mean, there's so many factors to look into. So I'm not convinced that we're bottoming at 6,7K. But it's. Yeah. In order to see like bitcoin to go up even more, like, I think we're gonna have to need a lot of organic, real organic volume buying spot.

So you feel that bitcoin's next major upward movement is more dependent on adoption and reaching a critical level of involvement in the space?

Yeah, definitely. I think at this level, anything could happen. I mean, we saw swings of like, you know, $2,000 up and down. I mean, we were at 10K when everyone was really excited, just like in February. Right. And then we hit. We dropped like 6,000 points. Close to 6,000 points. And in the space of a month, we close to doubling up now. So crazy amount of volatility and yeah, I mean, who's coming in buying bitcoin right now? That's my biggest question. I mean, we've been very, very quiet. People are not even interested in maybe the online stuff. But for us, like, we've been hosting a lot of like physical events to teach people what bitcoin is, how to set up wallet and all that stuff. We're not seeing any of that.

So.

Interesting times right now.

Charlie, are you also looking at it, this perspective in terms of when is the next big wave of buyers coming in? When are we going to reach that critical mass of adoption?

Well, again it all comes back down to trader psychology. You get back above 10,000 and more people will start saying, oh, maybe I should be doing something with bitcoin again, some of the cryptocurrencies. So it does seem to work that way. It's the same in any market, whether it's the stock markets. People don't buy the stock markets when they're down at the lows. When the stock markets were down, S and P was down its lows two weeks ago, most people weren't buying it then, they were running for the hills. You could see that. And the outflows of people pulling their monies out of their pension funds and their 401ks and whatever. And it's the same as what Clement was saying here about bitcoin. It's been very quiet from what you're seeing there over the last few weeks. And of course people are worried about their jobs and their incomes and everything else. But psychologically it'll only be once, in my view, once we get above some milestones, that you then start to see investors saying, oh, actually, yes, I should be getting back involved in this.

So speaking of milestones, you mentioned 8k as being one of those milestones earlier. And Cointelegraph contributor Phil Philb recently published a market analysis suggesting that if Bitcoin's momentum were to carry it past 8k, Bitcoin would enter a bull market. However, two traders who have correctly predicted bitcoin cycles in the past, both believe bitcoin could reach 8.5k before plummeting down to 3k in the near future. What do you think the likelihood of that reversal move is of occurring?

Anything in the markets can happen, but I think that this flush down move that we've had, all right, that was in sync with the stock markets and it's really gonna. What will be key is whether the stock markets come down, roll back over and make new lows, because if they do, then we probably will see bitcoin come over and make new lows below that 4,000 that it made just a few weeks ago. So I wouldn't necessarily agree with what those traders are saying, going to eight and a half and then coming back down to 3,000. But I understand why they might say it because again, that could be another clean out move in that market. But I don't see anything technically to say that it has to come down to three and a half, back down to 3,000 at the moment. So could we see a second wave in the stock markets? Maybe not with the same ferocity that we saw back in March with that type of sell off, but maybe we see a gradual sell off back down to at least retest the lows. That could still happen. Yet if you, if it doesn't happen, then I see no reason why Bitcoin would need to go back down to 3,000. But if we do see the S and P and the stock markets coming back down to test their lows, then we could well see bitcoin do the same.

Yeah, I agree with Charlie there. I think when it does hit 8, 5, I think a lot of people in the space, in the crypto space will get a bit excited, which we are seeing a lot of people. So how I see this entire cycle is like 2017. You have a bunch of people coming into the space that don't know how to trade derivatives. They're just flipping ICO coins. 2018 was dead. 2019 was a year that Bitmex made a ton of money, which means a lot more people learn how to trade on leverage. It's just more exciting for them because there's no ICO coins for them to flip. And what we saw, you know, a couple months back was like, funding rate reached record high. A lot of people were in longs and got completely wiped out. So maybe it's definitely possible, you know, when we hit 8, 5, we will see more people coming in and thinking that it will go past 10 and up and beyond because of having, who knows? But if that does happen, then it would be, I mean, the big whales out there could wipe them out. It could retest the lows. I think it's absolutely possible. It depends how many people believe that this will happen.

And looking to the more longer term, many of our previous guests believe that the Federal bank strategies of quantitating, unlimited quantitative easing will propel Bitcoin to safe haven status. What is your take on this narrative, Clement?

Yeah, I think so. If people who are watching this don't have a position in bitcoin or looking into investing in bitcoins, then I think these are great times. I mean, bitcoin all the time was nearly at 20k. If you want to get into bitcoin, these are like, these are great times to look into it and really take some action. I think the whole narrative of bitcoin is like there's only 21 million coins ever going to be minted and there's going to be less and less supply. I think it's a great time for you to accumulate sensibly because the dollar is just gonna, at some point it's just gonna blow up. I mean not just the dollar, but like, I mean I think the UK even has given people so much money at some point, have no idea how they're going to pay their debts. So I think once the virus is over then I think governments, feds at some point will need to answer these questions and that will be a very, very good time for bitcoin to shine.

Mm. What are your thoughts on this, Charlie?

I think that, yeah, good points made there again. But the, and the, with the, the huge amount of money that's being printed, especially we're seeing it in western governments and the U.S. especially if the U.S. has some sort of U shape recovery, I say U shape, not V shaped, I don't see see that happening. But some sort of U shape, a longer recovery. But if we get beyond this crisis then with all of that amount of dollar printing that's going on, then what we'll see is, we should see is a weakening of the dollar. And so this is important when it comes to bitcoin here because all of the time that we've been in a crisis, money goes to the dollar and that's what we've been seeing over recent weeks. But as investors around the world feel more comfortable then all of this printing of dollars that's out there, at some point there's going to have to be a devaluation, a marked devaluation in the dollar. And when we get that devaluation of the dollar, then other assets such as gold could continue to do well. And we're already seeing gold doing quite well recently in that regard. And also bitcoin, I always find it funny of bitcoin mentioning people mentioning bitcoin being a safe haven because I've always seen it as quite volatile. But the fundamentals behind it, the blockchain behind it. Yes. And there's a lot of huge potential going forward in the future.

We're also seeing a lot more really user friendly wallets happening. Even phone companies are embedding wallets within their phone. And I mean, I think like as soon as more people starts to believe that, you know, or they want to own one bitcoin, then it's very natural that against the dollar, I mean price will just go up.

Yeah. And the, and the, and you've hit the nail on the head there. It's making it easier for the average choice Joe to own some bitcoin where the average Joe, the average person on the street hasn't necessarily got in. Some did and they got burned. But next time round. With the ease of getting into these cryptocurrencies, it's gonna be a very different thing.

Great. Well, thank you guys for coming on the show today. I really appreciate your time and the conversation.

Thanks for having us.

Yeah, thanks again. Nice to meet you. Colin.

Nice to meet you. Charla.

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