Bitcoin or Altcoins: Eric Crown Vs. Jacob Canfield | Crypto Duel

So we're here with another crypto duel with Jacob Canfield and Eric Crown. And today we're going to be talking about a few different things and we're going to start and just jump right into it. So if you guys want to, you know, bump gloves, have a fair fight and whatever that means. You don't watch boxing.

I do. I'm just kidding.

Okay, good.

Well, to be honest, man, it's good to meet you. It's good to meet you. Jacob spent a lot of time actually speaking with him on what, Discord and Twitter. So it's actually cool to see face to face now. Definitely.

Yeah, man. Good to meet you finally. We've been chatting about doing a live stream together for a while, so.

Great.

Well, it's a great matchup and we're really happy to have you guys. All right, so let's jump right in and let's talk about. I guess I'm interested in bitcoin adoption. And you know, right now are we actually using bitcoin to make payments? Do you guys use bitcoin in that way or are you just trading? Are you saving? What do you think? Maybe Eric, we can start with you?

Yeah. So realistically, I've never used bitcoin to pay for anything. I think maybe once I used it to buy a flight off this site called Abitzkis, something like that. Pretty cool. It actually did work out. But as far as like a day to day expense, no real interest in using it as of right now. The volatility within it just doesn't really appeal to me as something that I want to use as a daily payment driver.

Okay.

All right.

And Jacob, what do you think?

I am one of those unfortunate souls that have been in the space for a long time and I spent a lot in bitcoin a while ago. And so like I bought a mattress on overstock and that mattress ended up costing me at the height of the market around, you know, $100,000, $200,000 in future value, you know, and it ended up being a shitty mattress, so.

So you don't sleep on your own.

I learned my lesson exactly.

To never spend it. And it's morphed. It started as a peer to peer cash system and now it's more of a store of value and it's being used exactly as that for Argentina, Venezuela, Zimbabwe. These countries that have shitty fiat currencies, people are hedging their store of value. Even in Korea, when we saw the nuclear threat, Korea was a massive hotspot for people that were converting their life savings over into Bitcoin. And also I got taxed on that purchase because it was, it was a taxable exchange in from bitcoin into USD. So no, all around is a very shitty experience spending my bitcoin. So I don't, I don't use it as a payment system. But that being said, I do have some international employees with some of my companies and they want to be paid in bitcoin. So I do buy in bitcoin, but our agreement is if I buy it at this price, that's exactly what you're getting paid at. So if it moves here and there or anywhere, it's basically whatever I bought it at. That's what they get paid, just a hedge for the volatility because they do want to get paid in bitcoin.

I see. So it's kind of means to get money from one country to another, but not to buy coffee at Starbucks.

Well, it just doesn't really make too much sense right now for something like that. Because if you are a believer in bitcoin, if you do believe it's going to hit some of these More like John McAfee numbers, there's not really too much of an incentive to be paying it out right now. It's not really an economical decision now, is it?

Yeah, but then why are all these companies, Coinbase and all these kind of exchanges are coming out with their own crypto debit cards? And you know, that seems to be.

Well, that doesn't mean it's a good idea. I mean, they're offering a service because they're going to get paid off of it, not because you should be using it on a day to day. But that's just my perspective again, you know, coming through in the sense that, you know, I am a believer in bitcoin long term. So, you know, if you do think it's going to get into those more crazier numbers, I don't know what crazy means to some people here, but for myself, you know, maybe into like, you know, past the prior highs, something like that, within that 50 to $100,000 region, then, you know, spending it right now when it's literally a fraction of that isn't really the best decision in my opinion.

Yeah, well, Tim Draper said recently he thought, you know, by 2023 it would be at 250,000. What do you guys think about that? Is that a realistic number by 2023?

You know, I think, I think the problem is, is both Eric and I are traders and asking someone to. And his reasoning was because of payment processing technology. And I don't think that has anything to do with it because I have no issue buying anything right now. I don't think anybody has an issue with buying anything. I have an American Express card. It works all over the world in China, Malaysia, India, it doesn't matter. American Express, it works everywhere. But. So I don't think the issue, I don't think the technology coming in is what's going to drive up the value. I think that our government's being horribly irresponsible with our money. And the fact that the Federal Reserve keeps cutting interest rates and it's a race to zero with our fiat currencies, I think that is more of a driver of exponential Bitcoin value, especially because that's how. That's what Bitcoin was designed for by Satoshi Nakamoto. So I think that's more of a driver and I think that's what's going to create more adoption. But I don't think that it's has anything to do with the spending it or the ability to spend it.

Eric, do you see that as well?

Yeah.

So we can actually do this mathematically. I'll share my screen right now, and I'm going to do something that a lot of people are going to really hate. But the thing with that is we can actually kind of plot out like expected moves with regards to historical volatility percentile, which can give us estimated sort of probabilities of what a price range could be at a later date. So right now we're looking at it on a daily time frame. You know, obviously not all that helpful, you know, for. For what we're talking about. We're later talking about, you know, a likely range between where we are right now and about 88, about 800 even, it looks like. But if we actually adjust this so that we can include the next. What was it? 2023 is what he said.

Yeah, 2023.

Okay, 2023. So what? That's three years away from now. Essentially, we're almost at the end of whatever this. Whatever this year is. So that's 365 times about three. So we're talking somewhere around like 1000 to 100 to 1100 days. So just kind of doing some bad ma. We'll just take the middle of that and put out 10, 50 days on top that we can come out with a range, actually, although this range is not that helpful. Let's actually go to a weekly for a second and we can do this. Well, actually, it's Easier to do on a weekly anyways. $150. It's going to be about 50 weeks per, per, per thing. So it would. This would actually suggest from a historical volatility percentile that it would be less than a 1% chance. Actually, literally, actually less than a half percent chance to get above about 160,000 around that time. Equally as unlikely is going below about 1000. As you can see right over here, this would be about 760. Now how accurate is this at this moment in time? It's more experimental than anything. But I just want to show that even in the most sort of.

Bullish.

Enthusiastic ways, it's pretty unlikely. And this is coming from someone who does believe in Bitcoin. But what's most likely, in my opinion is somewhere between about 50,000 and maybe 100,000 is probably, probably around where I'd.

Be looking towards by 2023.

Yeah, yeah. Bye. Bye. By 2023.

Okay.

All right.

And Jacob, what do you think? Like, you know, do you, do you agree with this math or.

Yeah, so I'm going to share my screen as well.

The battle of screen sharing. Okay, let's go.

Hold on, let me. Okay. All right. So this is for, for lack of a better descriptor, these are called the Canfield Fibonacci extensions. And I use these for long term value forecasting. And basically what they are is everyone's familiar with the most common Fibonacci levels, the 161 8, 2618361 8, and then the 4,236. But you can actually extrapolate further extended values using the same derived logic of how they get the Fibonacci values, which is basically you take the Fibonacci sequence, you take one number, you divide it by the previous number, and that's how you get those extended numbers in the same way with the way that you derive the Fibonacci Fibonacci retracement levels. So basically Bitcoin historically has respected these extended Fibonacci levels from the first wave, first impulse. Basically down on Bitfinex you can use bitstamp, you can use the BLX index, you can use any one of these. But basically when we get these extensions, you can see the respect that it shows. For these extensions, you got the 161 8. It was a perfect retrace bounce point. The 2618 was our rejection. 4236 was up here. But then beyond the 4236, you actually have these extended numbers. The 6854, the 1109 and then the 1794. And you can actually find these on Apple, Amazon and you can see how well it respects all of these Fibonacci levels, the 1109, 685.4. So for me I use these as a forecast to see how well or what values we can expect beyond this. So the next level beyond the 17.94 and if you look at gold, Gold actually respected the 1794 as well. But beyond this, the next level is the 2903, which is we just saw the Dow Jones Industrial index hit the 2903 on the extended Fibonacci levels and that's right around 31,000. So if we break this previous high, I think that 31,000 will probably be our next previous, our next high before a retracement, maybe back down to the 1794. We will find support at the 20,000. But first we have to break and hold the 1109, which is around that 12,000 level, which obviously on the weekly chart was a very historically strong level. And then beyond that, the 4697, which we just saw the S&P 500 hit as well as I think Apple. And that's right around 50,000, which basically was that same range that Eric gave. So the 2903 and the 4697, those are the two levels that I'm watching. But in my opinion, based on kind of how Bitcoin reacts, I think that the 2903 was probably the level that I would be watching for. So basically right around 31,000 and that lines up with, you know, market Cap having all that stuff. And based on timeframes, I would probably put that out end of 2020 to reach that 31,000 level.

Right, but from what I understand, that would imply a time frame for that, would it? Just price levels and price targets based upon one off?

Yeah, there's no timeframe. You can use like Fibonacci time frame cycles, maybe GAN theory and some other things to try and derive like a price. But I'm not that well trained in that stuff to really give a time timeframe based on it. I'm just looking at kind of like historical, historical, you know, how long it took. But you know, we're in a bull market. In the last bull market was I think like, you know, three years. And so we're just now starting. If we lose our, if we lose our I think probably 7,400 level, then that would imply a deeper retrace but until then, we're kind of chopping around and maybe a wave two before we kind of start moving into that next.

Exponential wave of what we can expect. Maybe, but I'm kind of focused right now. I'm interested in really what's driving this if it's mass adoption. I mean, is that back to the question, you know, if the masses start using Bitcoin to buy Starbucks, is that going to drive the price? Or, or is you think it's, you know, silly for you to be buying mattresses using bitcoin, but you kind of want other people to be buying coffee with bitcoin?

What do you think?

I don't think that, I don't think that mass adoption is occurring at all. I mean we might see, we might be seeing it in China after, you know, the President announced that they were moving forward with blockchain. But the Google interest shows that almost no retail money is coming in. I think a lot of people got burned on buying Ripple at the top or investing in BitConnect. And I don't think retail is really interested in cryptocurrencies like they were. What I think is driving this is just institutional money, non correlated asset risk. You know, Maybe they're putting a 5% of their portfolio in family offices. I'm seeing a lot of these friends and family that were involved in investing at a high level. Maybe they've got like 20 million to a billion dollars under management. U and some of them are asking me questions about Bitcoin. Whereas before that, you know, we'd have conversations but there was almost no interest. So I think that's where most of the adoptions are, especially when like a global leader like ice, they are, you know, going all in on their backed futures. And you know, they, they revolutionized the game for the New York Stock Exchange. They, they, you know, got rid of pit trading, they did all these things. And for the fact that they're stepping in and they're you know, kind of putting their focus on bitcoin and bitcoin futures and you know, options and all these different things. I think that wakes up the rest of the, the financial market to say, hey, this thing's here to stay and you know, kind of pay attention. And also you got, you know, like Fidelity and TD Ameritrade and some of these other people that are also building desks and some, some other stuff. So that's where I think the adoption is coming in. So I think it's more of a speculative asset. It's got a lot of volatility. So it's kind of a trader's paradise. And what I think is mostly driving the price right now is just open interest values on leverage exchanges where you get massive long squeezes, massive short squeezes. I don't think personally that it's retail adoption from my perspective.

And Eric, what do you think? What about, what's your stance on the retail factor?

Right, so I'd have to disagree with Jacob on this one because I don't think that retail means anything. It's pretty much worthless as far as when you compare it to big hedge funds, when you compare it to big money managers, those are people with access to, you know, billions and billions, you know, at the upper echelons, 50 to 100 billion. These are people who would make just, you know, the whole conglomeration of the retail sector just look like peanuts. Right? It's, it's a drop of piss in the ocean. It's nothing. So actually adoption does come from institutions and that is what you want. If you do want this to become a more legitimate asset. You know, going forwards though, what we're seeing right now is very slow, as you'd expect and as it should be. But all the infrastructure is being built up. As Jacob said, we are seeing CME's offer futures, we see Bakkt getting in the game, we see CMEs kind of talking about options. And you see all across the globe that, you know, as the infrastructure gets set in place, as the laws get, you know, set, there becomes a path towards that adoption for institutions. So before they didn't really have it because you couldn't really get into it. I mean, you know, not to mention just the lack of liquidity in this as to begin with is, you know, it's a major problem. So even if institutions do want to force it in right now, it's not really there. But it's going to be a slow process. And with all that said, you know, the retailers are just, you know, in my opinion, they're kind of like the last ones to come. Once Bitcoin's probably, you know, near its upper echelons, that's when the retailers will come to market. That's typically what we see during these sorts of major life changing technologies. The retailers are the last ones to know. That's the whole thing of being early is you get to be in the stealth phase, you get to be in the early adoption phase. But for the people coming later, that's usually when the party's over. That's end of 2008 with the housing market. That's what we saw in the 2000.com boom, sorry, crash. You know, you get what I'm saying, though? So I would say that it is that way, but that's actually kind of a good thing. And as things get built up, I would, you know, I would. I would think that over time, that does speak to the health of the market.

But do you think that maybe, you know, at that point bitcoin would be pretty much considered like a crypto asset, not a cryptocurrency, and that other players, you know, Facebook, Libra, you know, that might be. That might fill the void of the actual currency for retail purposes? You know, at some point, will bitcoin just be, you know, its own thing that's not even connected with currency at all?

I think that if we see bitcoin up in the $250,000 million dollars range, I think that it could very well act as a currency, especially because it's so divisible. It's divisible, you know, down to the one millionth, you know, down to the satoshi. So satoshi could act as the everyday dollar or whatever if we get into those upper levels of. Of value. But like Eric and I said before, it's a very early, nascent technology. You know, it's only 10 years old, and it's so volatile that right now, as a payment, it's, you know, like, there's like a meme that says, you know, basically like the kid bought some bitcoin to pay for something, and it shows the value changing of that specific object based on, you know, the minute, minute to minute value of bitcoin. So I don't see it as being. It is a cryptocurrency. You can never take that away because, I mean, that's just the definition of what it is. It facilitates transactions on the bitcoin blockchain network. I mean, by definition, it's always going to be a cryptocurrency. But whether it's a medium of exchange or whether it's a store of value, I think it really depends on what happens macroeconomically and whether or not this trend continues for global adoption around the world. But you could still use it as a medium of payment. But I think that there's going to be better, better mediums of payment. Like, we don't buy things in gold, but we store gold. But you can transfer gold into, you know, a medium of exchange that works. Well, it's just whether or not you want to. I mean, it really depends on what you want to hold your, your base currency in. Do you want to hold it in US Dollars? Do you want to hold it in Bitcoin? And then do you want to transact back into dollars? I mean, there's so many questions that you can ask, but I don't know, I don't see it as a good medium of exchange at this point in time, especially with tax laws.

Right. So a little soon to say, but, you know, you know, just like the institutional players like Bakkt and you know, ICE are getting into the game. We also see major corporations like Facebook, you know, with Libra trying to, you know, I think get the question started in Congress about regulation and whatnot, but I think yesterday they just announced their Facebook payment for, you know, kind of a cross platform, you know, currency for Facebook and Instagram and WhatsApp. What do you guys feel about that? Do you have any thoughts? You know, is that, is that a cool thing? Is that great for, you know, kind of their ecosystem, or is that going to have an effect on the crypto space in general? Or maybe I think I'll take this.

One first and then I'll let Eric give us his thoughts. But I think they fucked up by trying to introduce a cryptocurrency first. I think that the biggest thing watching that hearing, nobody trusts Facebook. They got, you got the Cambridge Analytica scandal. Every single person that signed on, whether it was PayPal, American Express, all these guys that signed on to the Libra project, I think all of them pulled out and so they messed up by trying to launch a cryptocurrency project first. So I think launching Facebook Pay, they've got PayPal signed on and they're just trying to build trust. I think before they launch their Libra project, they're not going to get cryptocurrency project approved. They realize that. So now they're launching this pay. Because the biggest questions that everyone has is, can we trust you with our data? Can we trust you with our privacy? Is our, you know, are we safe to transact on your platform? And the hearing was an emphatic no. The social media was an emphatic no. Nobody trusts you, Nobody. You know, you're exploiting us. You're basically, we're open to propaganda from Russia and the U.S. there's all kinds of misinformation, censorship going on. And so, you know, it begs the question, are payments going to be censored? You know, because information is being censored, so our payments going to be censored. And so that's a, that's a big question everybody has. So launching Facebook pay, I think is a step in the right direction to build trust with regulators, build trust with the public. They get everybody used to it. And then launching a cryptocurrency makes sense to have basically, you know, non government consent where you can transact anywhere, where it doesn't have to be in US dollars or fiat. It can be in, you know, anywhere, which is a basket of stablecoins.

Right. So in that sense it's, you know, kind of maybe a little bit safer. But, you know, isn't it also a little bit more centralized to have, you know, Facebook pay versus the Libra consortium, you know, the Libra Association? I mean, if we're looking, I think.

Both, both were centralized. In my opinion, a decentralized entity is one you can't censor, control or, you know, take control of. And there's no, there's no governing authority. Like bitcoin doesn't have a governing authority. You can't shut it down. What do you think, Eric?

Yeah, so I'd have to disagree on the premise. I think that Facebook actually did a genius thing. They went asking more for first. They probably knew that that was never going to get passed. I mean, first things first. Libra's not really even a cryptocurrency. They just kind of slapped that name on to give it a little bit of hype. And I imagine what their strategy is is to do the traditional ask for the most first, ask for the most ridiculous thing first, and then when that gets rejected, pull back, ask for Facebook pay, and no one's really going to, you know, stop that. So I do agree with Jake on this point that once they can kind of, you know, get some iterations in, get some experience in that realm and gain people's trust, then it opens up the road for them once again. If they do want to go back into something like Libra, that would make sense. But for right now, you know, again, the process is slow. And I think that they're, you know, I think that they're just kind of.

Playing the system really, really interesting. So maybe it was kind of a strategy, actually. So.

Yeah, absolutely.

And what effect might that have on bitcoin? I think some people look.

So the market likes to treat anything that has the word like blockchain or cryptocurrency in it as relating to bitcoin. And big investors and big money managers will kind of play off that sort of a news. So positive things with Libra were correlating with big upwards moves in bitcoin obviously this last major run that we had, a lot of it was off the back of of Libra getting more and more clout within the general sphere. And that adds into validity of bitcoin just by getting it into the public lexcon now. So it's the same thing as when Trump said he says a lot of things, but he said something along the lines of bitcoin is based off of air. It doesn't even matter what he says. The second that he mentions the word bitcoin is the second that he legitimizes it. It's kind of the same thing here. So I do think that actually it correlates well with bitcoin. But. But is there like really an interplay there? No, not really. Libra's again, not a cryptocurrency. Right.

And Jake, what do you think is that kind of like, you know, any publicity is good publicity?

Yeah.

I mean, how many news organizations have declared bitcoin dead? The more that they talk about it, the more it legitimizes it in the face of the public, in my opinion. But the beauty of it is they've attacked it so many times and they've declared it dead so many times that it has less and less effect on the overall price. Like he said. Trump came out and said that bitcoin was based on air. It didn't really have much of an effect on price. Whereas before in 2017, Jamie Dimon called it a fraud and it dropped 42% in less than 24 hours. So I think that the more and more that this happens, I think it gets more and more priced in based on the price action.

Yeah. Okay, interesting. And so, you know, I guess shifting back now a little bit to some of these forecasts, another kind of big range, big prediction was Bobby Lee who said by 2028 bitcoin could be like half a million. But what I'm interested not so much on, you know, because who knows what's going to happen in 2028. But he put a lot of stock in the havoc. What do you guys feel we're coming up to a having, I think next year. What's that going to mean for bitcoin?

Well, one, I would say look at Bobby Lee's track record for one. Two, I would also say the halvings are something that have become in my mind a little bit of a Mimi. And what I mean by that is the halving effect is something that everyone talks about now, even the people on cnbc, they're referencing it. This is a very Public known thing. And because of that I do believe that it's likely already priced in. Think about it this and for anyone listening right now, just think about it in your own perspective when you hear about the having that is information that is publicly available. It has been publicly available since the dawn of time for Bitcoin. And so people are already making decisions based upon that because they know that those things are going to happen in the future. It's in the code, it's in there, it's for all purposes, it's going to be done. So you can make decisions based on that today. And you also have to interpret and extrapolate that just one step further and say, okay, well if I'm doing that, you know, everyone else has the same information, they can do the same thing as well. So these sorts of things get priced in. And yes, while the first two ones did have a very nice interplay with each other, I would say that this one actually think it's probably going to, probably going to be a little bit more, a little bit more rocky of a path. In fact, I'm really kind of looking at it right now and I, you know, I'm going to say something that a lot of people are not going to like. I wouldn't be surprised if we are nowhere near prior highs come halving time. I should also say though, don't get me wrong, longer term, is it a good thing? Yes, reducing the supply. But as far as the mass indication that a lot of people are making out to be, I think just the fact that so many people are talking about it is a great sign in and of itself that we probably saw a good portion of the run on that last run from 3,000 to 14,000. I mean we have to realize that this is, this is insanity. What we're seeing right here, that's more than a 4x, more than a 4x over the course of what, three, four months. I mean it's very, very reasonable to think that we probably saw a lot of that move already happen pre to it. And the thing is, is that the miners, right, it's mainly a big deal for the miners because they're, well, their whole wear is going to be cut in half, right? That's a humongous revenue loss. So the less sophisticated miners, they're going to be likely washed out. And what is that, what does that mean? Especially in today's day and age, which we have a shit ton of these. Just, just got like, you know, people who just jumped on the craze in 2017 and they're operating like, you know, barely above water or maybe they're okay right now. But if there is any sort of, you know, major downwards action, they're going to get, you know, they're going to get crushed. And so what are they going to do? Well, they have to sell in order to liquidate, in order to cover their losses to, in order to cover all their costs and everything. So I would say that this, this market right now with more and more players in it, more and more miners in it, that actually produces likely more sell pressure. As I don't think that a lot of the miners are very sophisticated. In fact, I think very few of them. And the smart ones have already made their moves. The smart ones have already been selling futures on CMEs, most likely and locking in their profits right now. Very, very likely.

Jacob, what do you think? Is the halving already priced in?

Yes, I believe it's priced in. And you could see that with, I think early warning sign of what may happen with the halving is what we saw with litecoin. Everybody and their brother was screaming about the litecoin halving and we had the speculative run up similar to what we had probably 2019 for Bitco. But what happens after the having. Did price, you know, explode to the, to the heavens? No. It retraced 78.6% from, from its, from its all time high and Litecoin just got absolutely smashed. Did a reduced supply have any effect on it? No, not in pricing. So I have, I do agree with Eric on that concept and I've had a lot of interesting conversations with some sophisticated traders of size about miners and whether or not they're locking in profits. But the analogy that I always use is oil. Oil is really similar to Bitcoin in the fact that you have all these people with sophisticated mining equipment that they're constantly trying to get oil out of the ground. But you have the futures market where you can lock in price and same concept. But what happens is when you see a massive supply hit the market or when you see price crash, like we saw Saudi Arabia release all this oil on the market, the price per barrel crashed well below $40 a barrel. And what happens is you've got all these people who think that they know what they're doing operating in the US but they're operating on profit margins of $70 per barrel or more. And so when you see that, you basically watch all of these oil companies just go bankrupt. They have to get massive loans from the banks and so you're going to See that all across the world with bitcoin miners, just like he said, you're going to see capitulation. But, but what you're also going to see is you're also going to see all of this mining equipment flood the market so miners go back below market value. And if you follow people like Christopher Walken on Twitter, he's a high level miner. He built his own mining operating system. And when the price was below $4,000 and this mining equipment was super, super cheap, he's yelling to everybody, hey, start buying this stuff up, start speculative mining. Because now you can get everything super cheap where you can start mining all this stuff. And so what you're going to see is you're going to see a lot of those unsophisticated miners capitulate to sophisticated miners and they're going to buy it at cheap rock bottom prices and then they're going to start building up their farms again. And it's always efficiency, right? So everybody's going to find a more efficient and economical way to mine bitcoin. We saw it before. We saw people building mining facilities in hydro dams in Russia where they don't have to pay for cooling, where they get powered electricity. And you're going to see that again. You're going to find untapped ways to mine bitcoin without spending a lot of money on electricity. But right now, across the world, it's average around 5 to $6,000 per bitcoin to mine Venezuela, it's very, very cheap because it's subsidized electricity. Same thing, kind of all these other countries. You're just going to find more efficient ways to mine. And all these people who are not efficiently mining, like you're setting up a $20 million facility in Michigan or New York or something like that, where you're paying not rock bottom prices for electricity, you're going to get washed out. And I think that the having has nothing to do with that except that you get less reward for the same exact output of electricity. So I don't see it as being a major bullish catalyst. I mean, historically, yes, we've seen that, but I think more of a bullish catalyst is difficulty adjustments and how quickly you can mine bitcoin as well as the lower number of miners on the market allows for easier mining. So when you wash all these people out, the difficulty adjustments goes down so you can mine more bitcoin and it allows, I don't know, there's a lot, there's lots of different ways to look at it. But I think that the having is definitely priced in. There's just too many people who are watching it and the majority is almost never right. So.

All right, well, yeah, so maybe you guys can tell us, you know, go from long term to more short term. What do you see in the next few months? Just, you know, finishing out the year. Some people talk about the seasonality of bitcoin, how the winter months are historically good for bitcoin and price rises. Do you see that happening this year as we finish out 2019?

I think it's irrelevant what time of year it is. Bitcoin's only been around for what, nine, 10 years and most of the time it's just been enough trend. I don't think that has anything to do with the season or anything like that. I think you'd actually be better off trading moon charts, which I've seen so many of them now. That actually worked out that I'm starting to think myself. But what I can say about, you know, the next few months of price action. So next few months of action, realistically, you know, long term, you know, we are in an uptrend. You know, this is a quarterly chart right here. We don't really have that much, you know, we don't really have that much history to be. To really be aware of. But it's for what it is. You know, it is still creating higher highs and higher lows now, isn't it? So the next few months of action, looking at it, you know, looking at a quarterly like this, assuming that we don't break down below, let's call it 8,000 again, I would still be looking, you know, mostly up probably, you know, probably flirting around with the. With the lower, you know, teens again, or 10,000, whatever. Or whatever it ends up being. We could go back and look at the expected moves chart and kind of just plot out, you know, what might be the next, you know, you said like maybe three months. So how many days that maybe like 90 we'll call it. And so let's see what it kind of comes. Comes up with. It's saying that we're mostly going to be. It's very, very likely that we're just ranging somewhere between about 7590 and about 10,000. So I think. I think what's most likely to happen here is what everyone doesn't want to happen. Everyone wants to be a massive bull or a massive bear. They're always looking for the major massive trending movement because that's a very sexy thing to get. You get to show your P and L without like your actual P and L, just like the percentage ROI for like, you know, a cross trade. Most likely on Twitter, which is great. But what's most likely thing to happen here, we probably just range for a little bit longer. And this actually would line up around that having date. So I don't think that bitcoin has a major breakdown before that date. I don't think that bitcoin has a major breakout that date. I mean, for all intents and purposes, you know, just using the most basic of basic tools here, there's no reason at all whatsoever to be bullish on bitcoin. As long as we're closing, weekly is below, let's call it like 11,500. As long as we're doing that, we are still, you know, we're still just, we're actually just creating lower highs as far as a monthly goes and as far as the weekly goes. We're in a downtrend right now, so trends are more than likely to continue. In fact, looking at this weekly right here and spending a little more time on it, you know, again, just the most basic of basic tools. Every time that we've gotten a downtrend on a weekly, meaning, meaning two consecutive lower, lower highs and lower lows, it's always resulted in a year plus of downwards action afterwards. In fact, as time goes onwards and forwards, that time gets, you know that, that downtrend gets elongated, likely due to just the amount of people joining into the market. So going back on over here, you know, here's your first example right here. Major massive down. This one may be a little bit of an outlier. As you know, that's a 94 move to the. That's a crash. Not, you know, not a pullback at that point. You know, this one right here, we have another like 70, 72, 73% pullback. Right, pullback. There it goes again. And then this guy running over here, another 86 and a half percent pullback, if you want to call it that. And then this most recent when we had about 84% pullback right there. Right. Well, let's put this in perspective. If we're looking at this chart right here, and we are, and we are quite, we quite literally are making a downtrend on the weekly. If we actually are to play this out, historically speaking, that would probably align with a move back down here into this region. So I actually think that it's a little more likely that we move down within these next few months rather than move up. We probably Felt the bottom side of the range rather than the top side of the range. And then maybe sometime like mid 2020 or something like that, bitcoin pulls itself together and puts in another rally. But for right now, you know, the big areas that I'm watching and kind of the way that I'd be looking at this from, from a weekly perspective, which I think is probably most relevant to most people is there's two major. Well there's, there, you know, there's a lot of major trend lines, but there's two major ones that I'm looking at right now. This one that we're currently well in the process of breaking, which looks very much like it does want to break, which I'd say likely lends us down somewhere right around low 8,000 region. Probably play out another bounce right there. If the bounce fails, then I'll be looking for, then I'd actually be looking for a major washout down in this region. Low 36,000 actually, which know, a lot of people don't want to hear. But again, you know, what's the thing that most people don't want to see is, is a large trending movement. So what's most likely probably just range and just piss people off. You know, people hate trading ranges. People call it chop. I mean that's my favorite thing to do. That's the bread and butter of my game. So I'm more than happy for that. I mean I don't really care what bitcoin as a trader, I don't really care what price bitcoin is. As a bitcoin, you know, enthusiast I should. But again, looking at this right here, you know, if this, if this area does get violated the downside of the range as we looked at, especially with reg to like the next three month outlook, if you want to call it that, right around, let's call it a weekly close below maybe 7800 we'll call it then. Yeah, I would be looking for this to actually absolutely collapse down into the, into the low six thousands, upper five thousands. You know it's not going to happen at the snap of fingers, but it will, it will likely happen over time. By the same token, I don't see any reason to be even, you know, even like moderately bullish from like a long term perspective. As long as Bitcoin's below this 11, this 11, 5, 11, 6 area right here. If we can close above there, then yeah, I'd be looking for moves basically back up to the prior highs and likely beyond. But is that likely to happen right now. I think I'll let the probability speak for themselves. As a trader, you take your edge when it gives you edge and that's really all that matters. As a moon boy investor, maybe a little bit less sexy to hear, but that's what I'm looking at right now.

Okay, Jake, what do you think?

Yeah, let me share my screen. And then Eric and I, we have kind of similar trading styles. So it's not as sexy as someone that trades differently. But I also use moving averages, price action, RSI and stochastic indicator. It's just, it just works, you know, so there's no reason for me to not use it. But so what I look for is, I look for, for me, short term, I'm just looking at the four hour. If we just pull up our, you know, emas mas. The problem is is, is everyone is kind of watching this flag structure. The issue that I see is I have a couple of edges that I've been using for quite a, quite a long while and one of them is funding rates. I look for extent. It's basically a lagging indicator, but it's a really good indicator for me to know which side of the market is offsides or onsides as far as price action is going. And so when we saw price action basically down here between ranging between 84,8700 and I guess it dropped all the way down to 7,400. But the funding was paying shorts this entire time or sorry, the funding was paying longs this entire time. So funding was positive for basically from all of September to the end of October. So Almost, for almost 30 days straight, funding was paying out longs. And so that basically means that shorts, any position they had taken, they were paying out on that position for a long period of time. But what that does is that sets up for a squeeze or a BART pattern. And that's what I feel like is mostly driving bitcoin prices action right now are these, are these open interest patterns. We see open interest creep, creep, creep get up to about a billion dollars and then we see these massive explosive moves. And it usually happens when the futures market is closed. And so I don't know why anybody would be trading the futures market or even leave a position open on the futures market on the weekend because they're just getting absolutely smashed. And you can't do anything about your position because it's a 24,7 market. But so we see this open interest creep, creep, creep, creep up to about a billion dollars. And then we see these explosive moves to the downside, explosives moves to the upside. So what I'm going to do is I'm going to throw up the, the funding indicator and kind of explain exactly what I mean by that. So there's a really good indicator called Bitmex funding by Neobutane. But you can obviously just look at this on Deribit or Bitmex or whatever. This is a Bitmex funding indicator. But what we're going to do is we're going to kind of zoom out, look at it on the daily. And I'm going to expand this and I'm actually going to change my color so you can see, so people can see this a little bit easier. Black. Okay, so this, this funding indicator right here, this kind of shows which side of the market is getting paid. So when, when it's positive up here, that means that shorts are getting paid. When it's negative down here, that means that longs are getting paid. So what we typically see is just a kind of example here. When we see funding prolonged for an extended period of time, where shorts are getting paid and price is kind of consolidating, what we typically see is we typically see that long squeeze to the downside because of the offsides nature. If we see any sort of spark to one side, we typically see these positions. And this, this is really just mostly like a stop loss market, market, stop loss, slash, liquidation, liquidation cascade. So what you see is you see a little bit of movement and then what you see is you see the 25x leverage traders, they get liquidated and then that pushes them down where they're having to buy back into their position. So they're buying in or they're selling their positions. If it's a long squeeze to the downside, if it's short squeeze upside, then you see the 50, you know, so basically 100 x 50 x 25 x 10 x traders and it kind of cascades it to the downside. And that's what we typically see with these bar patterns. Patterns. And so we saw that back here where the funding was offsides for quite a long while, where we saw a little bit of movement. And then we saw that long squeeze explosive move to the downside. Then we see the funding rate was on the other side where basically longs were paying shorts for an extended period of time. But that means that longs were out of position because when longs are paying shorts, that means that most people are long or sorry, when shorts are paying longs and vice versa. So in this area, shorts were paying longs for, for about a month, right? So that means that longs were getting paid, getting paid, getting paid. So if you have a million dollar position and you're making let's say 0.2%, you know, per day, that's a pretty solid return each and every day. But again, when we see that nice spark, and this was just off the Chinese news, but when we see that nice spark, then you get the 50x traders liquidated, then 25x, then 10x traders all the way up here. And now we've just been chopping. But what we typically see is we typically see big move and then a slow bead, slow bleed back to origin. Big moves, slow bleed back to origin. So that's my edge, that's what I've been trading. But I also watch for whether or not big positions are being opened and you can see that with open interest and other things. And so that lets me know whether or not I want to be in the market. Right now I see that longs are basically paying shorts right now. So the majority of the market is long. I see a lot of death crosses happening on the four hour. We just lost our 200 simple on the daily or sorry, we lost our 200 EMA on the daily. We got rejected at the 200 simple on the, on that last move up to 9300. So to me I'm about 70% bearish. I am hedged from up higher into a short position and I've basically kind of been abandoning this little choppy range and I've mostly been trading alts. I know that Eric's not a huge fan of alts, but for me that's my bread and butter. I'm a very good altcoin trader. I can watch a lot of volumetric movements and order books and I love watching bot wall sell wall. So that's, that's where I make a lot of my money specifically. So right now I'm mostly just hedged on my bitcoin trading and I'm mostly just trading alts.

Cool. Actually, let's throw it back to Eric. Actually, I'm curious. So you're not really an alt trader. What's your, what's your strategy or you know, your philosophy about not trading alts?

To me it's like trade. It's like, it would be like trading drugs basically. It's like what's the point there? I just don't understand what the allure is with alts. I think that's for all the, I think what the most people or, sorry, what Most people would say is the allure is with alts and this is completely discounting that, you know, you're not a fundamental investor, not that these things have fundamentals to begin with but you're, you know, you're, you know, you haven't like read the white paper and, and you've done all the research into it and you like, you truly believe in the project. That's a whole different thing. Right, right. The reason why I don't really care to trade for alt is because yes, they do have some pretty massive moves. Absolutely. Which are, which look really, really cool. But getting in those moves is almost impossible with the liquidity available in these assets. You can't market a million contract position into pretty much anything that's not named Bitcoin. And even bitcoin, you're going to move it a little bit now too. It used to be like you'd have to have about 10 million marketing, you could probably move the markets a little bit with that. But now it's actually quite less anyways the alts are significantly, significantly further down than that. So I just see it as more of a risk than anything. Because if you do get into a position, assuming that you even get in your buy side in you get all your perfect fills, what happens if that goes against you? Well, you're going to have to get out. And how are you going to get out on an asset that's very illiquid, probably like you're going to have to market it at some point. Assuming that things do get in a truly desperate situation which if anyone's traded for a long time, they can tell you that the worst can happen when you least expect it. And for me that's just a massive risk. I'd rather not deal with that. And again, this is not to say that people who have done a ton of research into, you know, xyz, chain, shit chain, whatever, whatever it is right here, if you know that's a completely different game, perhaps you have your merit, you know, perhaps not. I'm not, I'm not here to judge that. I'm not really here to judge anyone to be fair. But you know, going back to bitcoin, that's your law of bitcoin. Right now you're getting these crazy moves. It's very, very volatile already and we already have 100x leverage on top of that. So even if, you know, it just doesn't make sense to me to trade it all as a trader to begin with because you can get those, that same possible percentage gain or Loss just based upon, if you really wanted to, you could just add leverage onto it on top of these absolutely massive moves to begin with. I mean this is just insanity what we're looking at.

I'm curious just for Jake to respond on that point. Jake, what does the altcoin market have that Bitcoin doesn't? Besides illiquidity?

Okay, not everything's illiquid, right? I trade Ethereum, I trade eo, I trade Ripple. And I found plenty of liquidity in my opinion. Obviously in the last year the liquidity has gone way down considering where it was. I think 2017, 2018, I could trade million dollar positions very easily on almost any altcoin. On Binance the volume was 4,000, 5,000 Bitcoin, 24 hour volume. Now it's hard to find a top 10 coin that trades above like 500 Bitcoin volume on a consistent regular basis. But on derivatives exchange like Bitmex you could still find some good liquidity for altcoins. But I will have to clarify. I will trade Bitcoin when I see good bitcoin trading opportunities. But I trade all markets, right? I trade options, I trade bitcoin, I trade stocks, I trade crypto. I just like to trade where the market's moving. And when bitcoin is stable and choppy and let's say like a 2% range, you'll see big swings on altcoins where you can capture 40 to 60% moves on an altcoin and you know, I'll throw a $50,000 position in there. That's a great, I mean that's a great trade. And they're very, very obvious and easy setups for the, you know, if you've been trading them for a long time, I mean you can see, you can see the market makers, they have all their little buy programs in the market. And so for me they're just, it's just such an easy market to trade that there's, I don't, I don't see a reason not to trade it. But for, for a very first time trader who's never traded, it's not the best idea to try and trade like a shitcoin that has less than 25 bitcoin volume because of what he said. And we saw this with emerging markets and we saw this in the currency markets where people, you start with the majors, right? You start with the gbp, the jpy, the USD, the Euro. And then as you start to trade, you start to get into these really, really, really shitty currencies that are really, really small caps. But they move like you know, massively in a day. But the risk is if something, you know, happens, it's really hard to get out of the market. And we just saw this with, with the massive market crash in general. So bitcoin is by far a safer trade just based on liquidity. But if you have a very small portfolio, a $thousand to $5,000, I think that trading altcoins is fine because it's just easier to spot, you know, big trades like 40 to 50 to 50% moves. Whereas if you're not an experienced leverage trader or anything like that, it's harder to get that in bitcoin. But the other thing with bitcoin is you see massive stop hunts in really choppy ranges. You see a lot of Darth Maul candles where it's really hard to manage risk because the order books are, can get really thin. But to each their own and everybody has their own trading style. I like to trade both. I like trade bitcoin and I like trade altcoins, but I don't trade that them both simultaneously. I like to trade when the, when the market conditions are right, when the, when the altcoin market's trending up, when bitcoin dominance is starting to fall. I think that altcoins you can throw a dart and make consistently 10 to 20% on a trade.

All right, interesting.

All right, so Eric.

Yeah, I'd have to push back on that a little bit and again teach their own. If it's been working for you, it works for you. If it has been working for you, then you certainly have more skills than me with trading those. But just looking at something as simple as CoinMarketCap, look at the trading by volume, even in just the top five, this is abysmal. This is literally fucking abysmal. This is a joke is what it is. Even bitcoin volume is not that great. I mean again, you could move the markets probably with just a few million bucks. I mean you can really, you can really put a debt in the market with just that much. And there's people who have way more than that. I mean that's to me that you know that anything less than that is just humongous risk to be begin with. But at least on bitcoin, if you need to get out, you can probably get out, assuming that you're not on Bixmex and the in the server is not overloaded. But look at it, you know, just look at them right here. This is, this is pathetic, but this is absolutely pathetic. I mean, what the hell is if. Cardano trading 54,000 volume per day. What the. That makes very little sense to me, you know, and this is just like, this is just the top 10. There's multiple pages on this coin market shit cap, which if you start to get. I mean, God damn, looking at this one right here, this is just scary. If it's been working for you, man, it's been working for you. I would say that this is just one catastrophic event from. Just a humongous disaster with my own account going in, looking at some alts. I think that you referenced Ripple. We can look at Ripple right here actually. Let's look at it versus the bitcoin pair and give it a little bit of, A little bit of just justice. I mean, these wi. This is a, this is just a daily. This is just a daily, man. These wicks are. This, this is just.

It just. I remember that wick.

I mark it very illiquid markets. Very, very illiquid markets. I mean, what the. Like how. You know, assuming that. Let's just say that you got in, you know, you got in your full position right here, whatever, you know, whatever it might be, and, and then you get a massive wick up. You're. That's. That's just a catastrophic event. So to me, that's more risk than I'm comfortable with as a trader. There's already enough risk just using TA to begin with as an edge, because TA is not perfect. You're going to take a lot. Well, you're most likely going to take losses. I certainly take losses. I've been around some of the best traders in the world. They certainly take losses as well. It's baked into the strategy. But, but this is just. It's too much, man. It's too much. So in my opinion, that's why don't trade alts. But again, man, you know, you know, anyone who's listening out there, if you've been doing that, if you're like Jake and you've been, and you've been consistently making money with, you know, with bigger positions on, you know, on an asset like this, and this is just, this is even like the top five. We're not even talking about, like, you know, I don't even know what's on page two or three. But, but that just. That just seems to me just too much to deal with. And, and as a trader, I don't want any more risk than necessary.

Yeah, but would you, would you agree that when they trend, they trend much, much harder and much Longer. I mean, it's very easy to identify a trend. Build positions. I don't know. I've been trading them.

Well, let's, let's look at this right here. I mean, let's look at ripple, right? You, you reference ripple. When they trend, they trend hard. I mean, this is just a pump and dump is what this is. This is, there's no. This is the definition of a pump and dump. You pump it all the way up. Literally dump it all the way back down to where you started. This is, this is, this is not that. I don't, I don't see this as a trend. I don't see. I mean, you know, could you trade this, could you make money off of this? Yeah, absolutely. But to say that it trends hard, I mean, this is, this is just, this is just a pump and dump to me. I mean, you could say the same thing. I mean, we could bring this even one step further.

Let's go look at, that's basically the entire cryptocurrency market.

Oh yeah. If you know how to trade. I wouldn't trade anything besides Bitcoin. I mean, look at, look at doggy coin, right? Legitimate pump and dump, right?

Yeah. I mean, I've made an incredible amount of money on Doge. It just literally bleeds back to, bleeds back to base value and then pumps. Bleeds back to base value then pumps. I mean, that's trends hard, trends all the way down, trends all the way up, trends all the way down, trends all the way up.

When you know when to get out.

Right?

You can maybe ride those waves. But I mean, you're definitely not trading the same on these altcoins like you would on Bitcoin, are you?

Of course not.

Yeah.

So, I mean, just different strategies, It's a different strategy.

You can't, you can't use the same strategies for every asset for every market. And I would, I would, I would say that, you know, you can use similar strategies, but Bitcoin trades very different than Ethereum and Ethereum trades very different than Ripple. Like Ripple hasn't been that sexy lately. It's been in a very, very tight consolidating range for almost, almost like two years. There's not. This. Not hasn't had much allure. Ethereum has been a dream to trade. It trades. It's, it's trading super. And I would, I would push back a little bit on the, on the volume. I mean, ethereum has almost $8 billion in volume. I mean, I've traded, I trade, I.

I know we just have to disagree on that one, man. That's, that's nothing.

But when you're tr. I mean, I trade a half a million dollar position size and I have no problem getting in, getting out for my, for my positions. But it's not like I'm trading like a million dollar positions in a less than $1 million volume. Volume.

Right. So the point that I'm making with that then is that for me, yes, you might be able to have this very good result. You might be able to have similar results to what you get on bitcoin, but you get extra risk with that. So you're saying you lower your position down. Well, that makes sense, yes. You'd want to lower your size. Absolutely. But it's still just, to me it is just, it doesn't make sense as a trader to add in any more risk. That's really necessary. That's what it's always going to come down to. That's why I kind of gravitate a little bit more to bitcoin. It just plays a little bit more technically than most of these guys and at least it has 10 years of history of it actually not doing what we see in most altcoins do, which is just for the most part be irrelevant. Although there are a few that stand the test of time. Ethereum, as you said, has kind of stood the test of time. Litecoin and Ripple, actually. Although, you know, the, you know, the one that people hate the most, funnily enough, it's actually been around quite a bit, which does speak for itself. But for the other ones, I just, you know, most of these projects have very little interest in ever, in ever doing what they ever set out to do. You know, they're not, you know, they're, they're probably not going to accomplish their goals. And you have these charts that are just going to be very, very sad charts, the same charts that we see from 2014, 2015, which are still basically, you know, irrelevant. Are they dead? No, they're not going to like go to literal zero. But there is an opportunity cost of being in these trades. Like let's say you get in one of these trades, let's say you get in the doggy coin trade. And what if it doesn't pump again? What if the game's over and then now it's an opportunity cost rate. You could have been in something else that is actually moving in your direction. And so the way that I think about it, and this is not to say that this is the only way to think about it, you Know again, if you've been making money doing what you do, more power to you, man. But the way that I think about it is that if I'm in an asset that is not moving and there's another asset that is moving which inevitably in a market, especially if you're trading all markets, there's going to be something that's moving that's actually kind of a loss of potential gains. So I look at that as a bad thing.

I mean, so yeah, I can understand that. But we take on inherent risk in crypto in general. So people that are in crypto are generally more on the. I want to be exposed to risk. But as a trader, different thing being.

Exposed to risk with Bitcoin, which doesn't really have a CEO, doesn't really have anything that kind of can truly get in the way. In the same way that if you have maybe like just I'm picking a random 1vert coin, I'm assuming that they have some sort of a CEO. What if he comes out the next day or what if he gets arrested? What if he dies? Something like that, that's unnecessary risk in my opinion. It's just.

I'll give you an analogy that makes sense for you. So I was trading Ethereum and there was a fake news that Vitalik Buterin died in a car crash. This was like early 2017 and the price dropped by about 50%. I understand that what you're talking about with the inheritance. So I'm going to give you, I'm going to give you a point to your favor. But an example of I think what I think there's, I think we need to really differentiate between what the hell we're talking about. First off, I'm talking about trading, I'm talking about maybe, maybe swing trade, maybe maybe three days to a 30 day trade. I'm not talking about holding it and investing in these, in these altcoins or these cryptocurrencies. Although there is merit to holding if you find the right project bubble, blah. I think that holding is, has a, is a very overrated meme type philosophy, especially in cryptocurrencies where there is no way to peg value to these altcoins. I'm talking about specifically trading, getting in, getting out. I'm not talking about holding these for an extended period of time and there's plenty of time to exit a position. Even on Ripple when it got to $3, you know, blah, blah, blah, you still had over a week to sell above $2.80. It's not like it went from $3 all the way back down to $0.30 cents in a day. Some of them do. I understand that, but I just think that there is a, I mean if, if you understand how to trade altcoins, then there is a lot of potential to be made. But for a seasoned, professional, veteran trader, yeah, bitcoin is by far a, you know, it's, it's a less risky asset. I just have made a ton of money trading altcoins, so I continue to trade them because they have very explosive moves. But yeah, so we can agree to disagree for sure.

That's great.

That's what this deal is all about. So different perspectives. I know some people are on both sides and I think you guys both make really good points. So I don't want to keep us too much longer. But Eric, did you have some more thoughts on bitcoin movement?

Yeah.

So if we're looking at, I think you also wanted a little bit more information on recent price action. So this is a four hour chart right here. Don't really care too much for a four hour in general, but we are in the midst of a death cross between the green 55 and the purple 200 right here. Yes, technically you want to be using the 54 death cross. It's an exponential. It's going to be about the same thing. It's a few more periods actually going to mean that's a little bit worse. The thing with this is, is that when we have these crosses, both golden crosses and death crosses, this is probably the lowest timeframe that I found that holds merit. When it's on the overall side of the dominant trend, meaning a weekly, those, those signals play out. And they play out, you know, harshly. For example, right in over here before this last breakdown from about 10, three to where we are or where we got down to like low sevens or mid sevens, you know, that was a 30% move to the downside. Right. If we go back a little bit further and we actually take one of the positive examples for a golden cross right here. Dominant trend moving up. We break the, we break the structure and we got the 200 simple supporting and you know, this, this one a little, you know, a little bit unfair of, you know, of an example. But just to show, you know, how, you know, how good it can get, you know, that's a 300% move to the upside. Of course, you know, another example of the downside right here, Dominant trend is down for all of 2018. All of the death crosses during 2018 were very, very good. This guy right Here, this guy right here, this guy right here, and this guy and this last guy right here. So what I'm looking at right now, and this is going to be most relevant to the price action that's coming, you know, in the next week, week or two, is if we actually do get this death cross, which could be initiated as soon as, as soon as like, you know, later today, I guess. And it will, it will inevitably happen as long as we're below the 200 expansion we have, which is 8,850 right now. So we're level load, although, you know, you never know when a BART shows up. So hey, if we do get back above 8850, this all goes out the window. And I'd probably be short term, medium term looking for a move back up to like 91, 92 region. But assuming that that doesn't happen and assuming that, that we, that we continue to use the 200 simple as, as resistance here, you know, this, this, that, you know, this would line up with another pretty nasty move, likely back down to the low 8 thousands. I would be looking for a bounce likely in the, in the low 8,000 somewhere around maybe 80, 81, 82 within that region. It's, you know, it's all the same to me really. You see this nice order block coming in from our late September region. So, you know, we'll have to reassess it after that. But kind of putting two and two together once again, again is going back on over here into the weekly and looking at this right now. Well, actually, let me take these guys off. We'll get to that in just a second. So the yellow moving average right here is. Hey, hold on, that's not. Yeah, there we go. And let me get this guy off right there. And let me put on the red. Okay, beautiful. So the yellow moving average is the 21 exponential moving average, which bitcoin loves to play off of, you know, in. In loves to play off of, you know, as support in its bullish markets and resistance in its bearish markets. Not perfect, but it gets the general feeling of it and we can expand this, you know, quite a bit. So going all through, you know, the dawn of time, essentially all of our major dumps were essentially to this level. Booze it back up if we're bullish and you know, the highs continue to go upwards and onwards. And same thing for when we lose it to the downside. The first tick that we lose it is, you know, is the crack is the catastrophic crash right here, you know, right here as well, and more recently in 2018 happened right here. What's going on right now? Well, we're actually in danger of breaking it. And this will close, this will confirm at Sunday, 7:00pm Eastern Time, I believe it is. And, and that's currently coming in right around about 9,000 bucks, or let me get that. Yeah, about 9,000 bucks. A little bit below 9,000 bucks. So assuming that we do close below it, to me this is, you know, it's going to likely set in the greater trend, you know, going onwards and forwards for the next couple months probably leading into the, you know, into the end of, the end of the end of the year. And we probably do find ourselves at the very least at the bottom side of this range. And if that range breaks, then very, very likely much, much, much worse than that. But like I said, we can take it one step further. Looking at both the, both this red moving average and the 21 in relation to, in relationship to each other. That is the red 10 simple, that is the yellow 21. When they, you know, when they have the lower period cross into the upside of the, of the higher period, you know, meaning the 10 above the 21. It's exactly what you think, intuitively speaking, it means that the trend is strengthening as you know, or to the upside in this, in this example and just blindly trading this over the history of time has been pretty damn profitable, to be fair. Selling it right here. While it's not like the best entry, it does get the momentum and get some momentum for the next year and a half of price action. And this guy right here, you know, equally as awesome, you know, 300% move the upside.

Yeah.

So, you know, we can, we can back this all the way back. And over here, yes, we do get a few one offs but for the most part, once these guys get divergence between each other, that's when we get big momentous moves, you know, more, you know, multi thousand dollar moves on top of that. In fact, if we actually just look at the slope analysis of these guys, there's a very, very specific signature that we see in, of Bitcoin whenever we see both these guys having negative slopes, meaning the 10 simple and 21 are both angled downwards. I mean it's exactly what it sounds like. The average of price is down. And when they're, and when they're barely crossed, we actually have a pretty nasty, pretty nasty history of this going all the way back right on over here. When we get a negative slope on the 10 simple and the 21, this one, you know, that's your little Correction right there. 70% correction, to be fair. This guy right here, same sort of thing. Although this one playing out all the way down to, I think we already looked at this one like an 80% move. Although even if you gave, even if you gave this one the benefit of the doubt and so that's, you know, you actually had a nice little bottom right there. It was still what, a 7, 50, 60% move. And we get another, then we get another trigger right here. That's another 75% move in your face. And then same thing right in over here. Right. So we are in danger of getting the bearish cross of this and more importantly, we're in danger of getting negative slope on this. Take this even one step further. On top of that, looking at CMEs, which I put more weight on CME charts than I do on spot chart as they're the most professional exchange and they, I do believe that the most, you know, the most money is probably, probably, probably interested in looking at this chart right here. This one's already broken. This one's already broken. If we go look at the, if we go look at gbdc, which, not the best thing to be looking at, to be fair, but broken and now using it as resistance, popping down, not good. Now if we do take out last week's low, I would be looking for continuation back down the lower end of the region. So that, you know, that's probably like the next few weeks of price action. But this is all again coming off of the assumption that we actually do get that initial four hour sale signal and then everything else kind of plays out looking for the avalanche of effects. We can actually even look at this. Just one last thing, I promise I'm going over here and checking out what is this? The VWAP ratio. Yeah. And credit to Willy Woo for this. He's a goddamn genius. I've been trying to reach out to him, no response. But it's all good. And I do want to thank him for this because this is amazing tools right here. So this is the bitcoin vwap ratio and there's a very, very specific interplay between the relationship between all these different moving averages on the vwap. Right. We see that not only is it just, not only is it just their posturing around where my cursor is right now that kind of judges whether we're generally bullish or generally bearish. There's actually much more, much more complicated stuff on top of that. We also can see that the interplay between the positioning of the. Of the most reactive, the blue to the purple, which is semi reactive. And then you got the pink. It's like some sort of red. What's the one with like the. The soups too hot. Where the is. I don't even know. It's some sort of children's tale with like, you know what I'm talking about. The three bears, if you want to call it that, which funnily enough, Goldilocks. Goldilocks.

Yeah, there you go. Yeah, the Goldilocks zone.

Awesome. Awesome. Anyways, we do see that. First things first, there's three prongs of this, if you want to call it that. I want you to kind of imagine a regression line where my cursor is right now, kind of just running it across right there. When we're. When they're all above there, generally bullish. When we're all below there, generally bearish.

Bearish.

Now, the relationship between the blue, purple and pink speaks to the strength of that trend. So when we have the blue, the most reactive training above the purple, training above the pink, all above the regression line. That's your bull market. That's right here. That's right here. That's right. And more recently, right here. And of course going all the way back running over here as well. So the opposite logic applies. Right. Where when we see all these guys below that regression line, that's usually when we play out our bear marks and play. And when I say bear marks, I mean those are like the 70% moves to the downside that we're talking about. That is crash. Right. You can see right now. Or sorry, let me actually just show this what it's done in the past first. And then we'll kind of go to our current area. But when they all kind of trend below right here and we see especially the purple below the pink, that was the beginning of the high being put in at 20,000. Yes. A little bit of a. What's it called? A lagging indicator. But you don't really care about a lagging indicator. When you. It gets the next year and a half worth of price action. Same thing right here. We see them all go down. That calls this top right here. And then we see the same thing after this bull trap right here. You know, once again. And remember, this is a 70% move to the downside. This was also like a 75% move to the downside right here. It doesn't look like much because this is log scale, but it was really, really nasty. Same thing right here. We get the same sort of interplay. And this again, doesn't look that nasty, but this is very much a 75% pullback right here. And then this guy right here, you know, an outlier of probably 94%. Anyways, what we're doing right now is we are in, in what I think is kind of like the dangerous territory if we actually are going to play out some like, legitimate downside because we have both the purple and the pink below the regression and they're starting to get divergence away from each other. The blue is still reactive and above, but it is angled down right now. And even in the past when we've just got both the purple and the pink in that posturing below the regression that has led on to, you know, that that has actually been, you know, good enough to get those 70 plus percent moves to the down downside. So getting the blue, which is more reactive, is kind of like icing on the cake and probably speaks more and kind of my theory is that it speaks more towards like the longevity of that trend. So, you know, in like a really aggressive one, like this guy right here. This plays out for a year, right? This guy plays out for a year as well. We get them all like in perfect posture and for a bearish market. So that again, you know, speaks to all the same corrections that we've seen going back on over here, you know, from $20,000 high from bull trap right here. Here from, you know, from. From high right here. And these are all again, multi or sorry, not, not multi. Thousand dollar moves. They're like, you know, high percentage moves. 75% right there. This guy right here, 72 and a half percent. This guy right here, another 76 and a quarter percent. We already spoke about this or this one right here, that's you know, kind of an outlier. And this guy more recently about 83%. So if we just even take the lower echelon of that, does that kind of line up with what we're looking at right now? Well, well, let's just play around with numbers, right? And I want to preface this statement by saying, hey, this is really experimental. This is mostly just for like a crypto duel. Because we might as well talk some shit right now, you know? Right, Right. But at the end of the day, am I like looking for this to happen? Am I angling my trades for this right now? No, I'm not. I could care less, really. I'm mostly a ranch trader, as both of us are. But if we do play out like a 75% down, which is pretty Much for the course off these, off these signals that put us right around our prior lows at around 4,000 bucks. If we actually put on some major movement averages, especially the 200 simple and 20377 and 200 exponential moon average that actually put us back down around the 200 simple right here. Right. Which did hold us up off our. Off our 2018 lows and also our 2015 lows going back on over here. So I would like to say that as a absolutely deathless scenario, if you want to call it that, not the thing that I'm looking for the most happen. Not the thing that I really want to happen either that is possible. So for all the people looking for the having to produce back to 20,000 or double it or whatever they're thinking, I just don't think that, at least for myself, speaking just purely to my strategy, I don't see any reason to be bullish on bitcoin until we get back above this area right here. And I'd mostly be looking for ranging action back down to high seven thousands, low eight thousands. If that area breaks, then we could legitimately talk about a scenario like this longer term. Again, it's highly experimental, but there's enough things in there for me to give it some merit, give it some thought.

Jake, what do you think about that whole analysis? Yes, it's speculative, but do you mainly agree with broad strokes, kind of a little bit of warning to the bulls in the next few weeks, months?

Yeah, I mean it's not very popular to say. And I have been publicly short since about 9900. I've showed all my positions and basically I've highly recommended hedging short, at least just to keep your portfolio USD neutral when you get a massive move. That's like the biggest, third largest candle in history in your USD portfolio for Bitcoin goes up 43% a day. Day. I like to lock in those USD gains. You know, when your portfolio goes up 40% a day, you're kind of an idiot if you don't want to take profits or at least lock in some of those profits. But so I'm going to share my screen also really quick and kind of just go over some broad strokes as well. So I do agree, I do agree with the death cross. I do agree with his moving average analysis. I'm a big moving average trader myself, but just naked price action. I'll kind of go over some stuff that's like really simple, really basic, but kind of shows like kind of where we're At. So this blue line on the top here and this blue line on the bottom, this is the weekly, weekly close. And this was the weekly open. The previous prior weekly open. So basically we just got rejected at the weekly open. But also we got this internal trend line that was basically resistance here and it acted as support 1, 2, 3, 4, 4 times and formed this descending triangle that everybody was watching. But basically this move down and then this move back up was a bearish retest. That was not a bullish move. As much as people wanted to say that was a bullish move. That was just a bearish retest. We never actually broke back above the previous, previous support that acted as resistance. We got rejected once, we got rejected twice, and they, and they swept the highs and they also grabbed all this liquidity. To me, that looked like more of a, of a positional short fill than anything else. Yes, it was a short squeeze, but this massive wick rejection, especially at the bearish retest and it couldn't close the above, that was incredibly bearish to me. Now, the one thing that we do have going for the bulls is we did break above this, the simple resistance level that was acting as a downtrend resistance, a kind of a dynamic resistance rather than just a horizontal level. And we've tested that 1, 2, 3, 4, 5, 6 times and it has not broken yet back down to the downside. So if we can hold that level or if we can at least break out of this wedge, then I could see us definitely ranging back back up maybe to test the 94, 9500 level and getting another crack at the weekly, at the weekly level. But our monthly level is also about the same level. It's around 8,000. Now I'm going to share a chart that isn't mine and kind of go over some of the same stuff that he, that he went over. So Willy Wu is part of Adaptive Capital, which is a, which is a fund with David Puelle and Maram Bonabadov, and they're a couple of my close friends. And Marad shared this chart with me and it's, it's kind of interesting. What he said is he's watching for the 8,000 to about 8,200 level. And you've got, got that. Basically you've got the yearly pivot right around the 8,000 and you've got the, the VPVR, which stands for volume profile range, a visible range, but basically the VPVR is sitting right around 8,000 as well. And you've also got the, the yearly VBLAP from the December 25, 2015 bottom sitting right at around 7,900. So there's a lot of confluence and also the 78.6. Between the 70.6 and 78.6 level retrace of the, of that bullish move. But there's a lot of confluence around that 8,000 level. So I do agree with Eric that I'm watching that 8,000 level. We break that, then all hell probably will break loose and we'll. We'll probably see another massive long squeeze to the downside. But I am watching for right now. I'm. I'm head short, but we are in this kind of consolidating wedge structure where prices, you know, consolidating between the previous resistance and the, the top side resistance. Resistance which is acting as support right here. So I'm watching for a breakdown or a breakup of this range. I don't see any reason to be long at this point. Funding is still paying out shorts and so it's paying for me to be short. I've actually made a good amount of money just by holding my position. The, the holy grail is when the price goes down with your, with your trade and you're making money on funding, that's like the most. That's like the best feeling in the world in my opinion. But so, so I'm also leaning bearish about 65, 75. Bearish. I don't see any reason to get long. I don't see any accumulation buys from the big boys on Coinbase either, which is another telltale sign. But we are kind of retesting this top side resistance and it's acting as support right now. I do agree with, I do agree with Eric that the Bitcoin futures chart is by far the chart that you should really be paying attention to. And the level that held our lows was the 61.8 of the total move from the swing low to the swing high, as well as the 200 simple. And then we. And we rejected right at the 38.2 as well as this internal trend line. We got rejected right here. That would have been an ex. An extremely beautiful short around 10,000. I unfortunately didn't get that short. I got the retest up here around 9900. But we are, we do have a descending channel right now. We're coming back to the 200 EMA, which did support this random spike wick down, which, which took out a lot of liquidity here here. But so if we, if we can hold the 8,400 level, I think 8,400 level would be a decent play to to get long, but right now I'm not trading that. I do want to see some reaction from the Bulls.

Jake, we got 15 seconds, so I.

Just want to say that's it. So that's what I'm watching for. So great. It's just interesting watching Spot and Future so you got to watch both though.

But guys, guys, thanks so much for this crypto duel. It's been awesome and we'll talk to you soon. Soon.

Hey, that was awesome, man. That was awesome. Massive respect, Jake. Massive respect.

So thank you, Eric and Jake. A little bit of warning for the bulls and a little bit of a difference of opinion on altcoins, but that's what we're all about here at crypto Duels. So be sure to check out our YouTube page and like subscribe and huddle.

Cointelegraph like subscribe and hodl Sam.