Bitcoin Still to $100K? Halving Breakdown, Stock Market Decoupling & More | DataDash & TheChartGuys

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With your hosts, Jackson and Giovanni. This is Cointelegraph's Crypto Markets Live. Hello, YouTube. Welcome back to another episode of Cointelegraph's Crypto Markets Live. I'm your host, Jackson, and today I have the pleasure of welcoming aka Data, Dash and McDermott from the chart. Guys. How are you doing today, fellas?

Great.

Glad to be here.

Awesome. Great. So it looks like we got about almost 300 people in the chat right now. It's great to see our audience coming out to support the show. Throughout the discussion section, you feel free chat guys, to write your questions in the chat. Our team will be combing through them looking for the best ones. So just ask the most relevant questions to the topic of discussion and we'll be looking at those and asking them to our guests. And if you're enjoying the crypto content so far and you want to stay in touch with all of the next crypto live shows coming to you, make sure you hit that subscribe button. So, all right, let's get into the discussion. We're going to do a little past, present, future. We're going to take a look at what happened with the bitcoin halving when we're going to take a look at what's going on right now in the crypto markets and we'll touch on what we think is going to happen in the future. So Bitcoin block 630,000 was mined precisely at 3:23pm Eastern Time on May 11. This confirmed Bitcoin's most recent halving, where the block reward was reduced from 12.5 bitcoin to 6.25 bitcoin. We saw a fair bit of volatility on the day of the halving, with the price jumping between highs of over $9,000 and lows of nearly $8,300 the day before. Also saw Bitcoin lose over $1,000 in a matter of minutes. Nicholas, what is your interpretation of this volatility surrounding the halving event and how did the price action line up with your expectations?

Yeah, to be fair here, Jackson, when it comes to expectations, I tried to keep a pretty neutral viewpoint. I think obviously people will throw a lot of different things in regards to their estimations for the halving event. Some people say that miners shutting off their machines is going to crash bitcoin's price, which I can't find Any actual data to actually suffice that or make that argum and along with that as well, that the halving event would just rally upwards and that miners would purchase Bitcoin in order to get it towards the point where they can actually mine profitably. I think both of these arguments and the arguments that most people would make are kind of up in the air. So for me, I mainly just actually sat by and watched. I've been currently holding long on the market right now, not in any margin positions, haven't been placing any shorts. And the major thing that I was looking for was to see whether or not we would hold in a very substantial level of support, which was the support range we had back in early March before we actually had the major sell off. So it was around the $8,500 range. And as you kind of alluded to in that case we went down to around 8300 to 8500. And actually we're able to hold that range for a matter of two days. So we've actually now picked up in this case in the sense of price, been rallying back up to the upper $9,000 range. And I'm quite confident in this case that we could actually be testing not only above a very historic level of resistance that's been weighing price for a while, but also come up to around $11,000 and over the next coming weeks set up for the broader cycle.

Dan, how did your thoughts play out over the course of the day of the halving?

Sure.

So I was looking for a sell the news reaction and you hear the saying buy the rumor, sell the news. And when it's a known event, everybody knows it's coming. The market prices it into a certain degree beforehand. So the harder you run up to a known event, the more likely you are to see a sell the news reaction. And there was a little bit of a curve ball thrown in there with the Paul Tudor Jones news, which we'll talk about in a bit. But it was a hard run up and then a sell off as we see that. And a lot of people who are unfamiliar with markets, they'll expect things are just gonna keep running until that actually happens, until the actual having block fires off. But in reality, the way that the psychologic, the psychology of the market works is I was expecting a bit of a sell off. But I have also been very impressed with the recovery from that sell off. I mean, we had an hourly uptrend after hitting the bottom of 8,100. That hourly uptrend has lasted three plus days at this point to get us back almost to that 10,000 mark. So impressive recovery. And at this point it's all behind us now. And looking forward, I think that if we can clear 10,500, that'll be a pretty significant statement from the bulls heading into later this summer.

Nicholas, I remember when you were on our Show Back in January 30th, we had a whole discussion about whether or not the bitcoin halving price was priced in. And I believe you took the position that it was not priced in. And you mentioned because of the stock, the flow model, it's impossible to price in. Did you see the same thing that Dan was talking about in terms of selling off the news as well, or did you not? Did the event not confirm any thoughts you had about the bitcoin halving being priced in or not?

Yeah. So to refer to what Dan's actually talking about, I would actually take the position that he has. And the reason for that is you can get some kind of anticipatory buying activity, especially for people within the crypto space right now that will lead prices to be a little bit inflated and usually come with a buy the hype, sell the news event. What I was talking about in January, in that case when I last came on, what I've been talking about a lot on the channel is how the halving event can't be fully priced into the actual fair value of the stock to flow model. And what I mean by that is that, for example, if you take a look at the last two cycles, you know, a lot of people say that markets are 100% efficient. And in reality, if markets were 100% efficient back in the summer of 2000, excuse me, back in May of 2016 when we had the second halving event, then bitcoin would probably be resting at the fair valuation of today's valuation, which would be around $9,000 or 8,000, a few hundred dollars for bitcoin. And that's what I always bring about the halving event is that we actually don't get those price levels, those fundamental levels, stock to flow model, until we actually go through the cycle. On Bitcoin, what initially happens is you have this supply shock that comes in because every day price is generally determined between a rate of inflows and outflows, buyers and sellers. Until you get to this point where you actually have the having of it initiate when it actually happens, you can't have that systematic change where on a day to day basis for the next coming years, you're Going to have half the amount of sell side pressure you had before. That's one thing I always talk about how over the next course of two to three months after the halving event, you start to have a really big difference in the dynamic between supply and that's usually what starts to kick off the next cycle where you break past the previous highs a few months out and after that start to kick off into a new cycle for the next year or two.

Great. You touched upon how you expected to see a bit more speculation as we approached the event and that was correct. There was a lot of trader speculation leading up to the having event. And just the week before, according to A report from CryptoCompare, April 30 produced the second strongest single day for volume on record. Trading volume on record with $66.2 billion worth of crypto assets changing hands. Who do you think was speculating on the halving? Retail investor and why? Because this event doesn't have any immediate impact on the price as you were talking about. It's more of a long term thing. So why would people speculate on this event? Dan, do you have any thoughts on this?

Sure. So when you see this kind of event happening and you start to see volume trading, volume inflow, it's almost like a dinner bell ring for traders saying here's your opportunity. Because when you got volume, you've got volatility and then you've got opportunity. So traders know that that's going to happen both to the upside and the downside. And that in my opinion, everybody knows that, you know, once we get to a certain point where the anticipation is there, you see it on crypto Twitter, everybody's talking about, you know, their moon calls and what's going to happen. There's excitement and that emotion translates into dollar volume trading. So there's a lot of opportunity. When things open up like that, as we've seen, we went 20% up, 20% down, lots of back and forth. And there are traders out there that are using this event where they are using their capital more, they're more aggressive, they're putting in more time to trading and then when ranges tighten, they pump the brakes and they back off a little bit and they're not trading as much. So traders like myself, I will strike when there is opportunity and volatility and then I won't be trading and my dollar volume will not be contributing to to what's going on in the crypto space when that's not the case. So this event was really just a beckoning call for all traders. Here's our volatility. Go get it.

Did you see things the same way, Nicholas? Yeah.

I mean the thing is, I think as Dan emphasized, I think both of us are considered macro traders where we trade amongst different markets. And basically if you're an active day trader, I mean something like the halving event that comes around every four years, basically it's a honey pot in this case to reach into and try to find opportunities. Especially with the kind of volatility where on a one or five minute candle I think as Dan and I were talking about before you can get 1 to 2% changes in price. So you mix this in with the excessive kind of risk that people have been taking doing leverage trading. I mean it's just crazy. I mean the kind of opportunities you have. But in regards to the actual having event in this case, I think the interesting thing that I took away from it is that right now with things as you mentioned Dan, like Paul Tudor Jones in this case, there was a lot of rampant speculation, I'm interested more than anything in this case to see how we're going to hold up substantially afterwards. One thing as well that was important to note just on the thing you brought up Jackson about in regards to the actual volume, the one thing I always like to bring up is that we didn't get a total of, I think you listed around $66 billion. The reason that is and stuff is because at the moment there's a lot of fake volume in the crypto space. The vast majority, I'd say probably about 95% of the volume that's actually published through a lot of coin aggregate sites is not real volume or we don't actually have substantial evidence that it is, but I don't doubt it at all. We did have a substantial amount of volume in the sense of actual day to day volume in crypto markets and I want to see that continue to sustain afterwards in the halving event. If we're actually trying to see buyers coming in and sustaining price to higher levels for the next cycle, we're going to need that liquidity really bad this time around.

Great. I'm taking a look at the chat's questions now and I'm seeing a lot of questions about bitcoin price action, where things are going to go from here, future economy forecasts and all that good stuff. And we're going to get to it guys just in a little bit. I'm excited to keep going on with this discussion and we'll get to those questions. Don't worry and I'll be sure to ask a few of them when we get there. We've been talking about Paul Tudor Jones and mentioning him a bit and I just think we should take a moment to discuss him now. He is a billionaire hedge fund investor who recently revealed that part of his portfolio is invested in bitcoin which many believe will inspire other institutional investors to enter into the space. What is your guys interpretation of the Paul Tudor Jones news given its coincidental timing with the bitcoin having. Dan, let's start with you.

I personally think it's a big deal. I mean you have. I refer to the herd as general retail traders and investors and those of us that know the game of trading, we look at CNBC and we laugh a lot about their headlines and but regardless of that, it moves markets. You know, if CNBC is going to talk about a stock, that stock is going to see price action based on what they are saying. So there are definitely people that are listening to the talking heads out there. And when you get, you know, this poster child that is going to come up and say this for bitcoin, there are going to be people that are more prone to accepting what he has to say than, you know, some of these myself or Nicholas or these younger guys on YouTube. It's a different credence for a lot of people. It's more reliable because this person has a history and is known in the stock and financial world. So I think it is significant. And the more that we see this happening, the more people that jump on and say, yeah, you know, 1, 2% of my portfolio just as a hedge, just as some diversification, I think that that can only continue to add exposure to the broader retail herd and get more people interested in the space.

Nicholas, do you think it says anything about the institutional presence in the space? Because I saw that on May 5th we saw a new record being set for the number of options contracts being traded on the Chicago Mercantile Exchange. And the CME is usually associated with the institutional presence in the bitcoin market. Do you think that Paul Tudor Jones statement combined with this new record being created says anything? How large is the institutional presence we're seeing here? Is it more than people realize?

Yeah, I think for a while there's been a lot of institutional interest, whether it's from actual institutional investors or traders themselves or the clients they serve. And you can see that as you mentioned in that case, Jackson, from a lot of the data points from the options contracts volume that we're seeing. But along with that, as well, the amount of Bitcoin and Ethereum that's being acquired in order to create and issue new shares under the ETNs that Grayscale has created, in this case the GBTC and also the one for Ethereum. So you have this interest already that was present, but there's still been a lot of people to be completely fair and non biased. There's a lot of people who have been skeptical. And when Paul Tudor Jones came out, I think people kind of underestimate why this is a big deal. And I completely agree with Dan that this is going to be a huge catalyst for institutional interest because I like to build the equivalency in this case that as Warren Buffett is to investors, Paul Tudor Jones is to traders. A lot of people may not know who Paul Tudor Jones is, but he's a very well respected name, probably one of the most respected hedge fund managers throughout the United States. The thing is, you have to understand a little bit about Paul Tudor Jones background with his extensive knowledge and commodity cycles being one of the first precursors to gold back during the 80s along with that as well, just understanding a lot of his trading history, you can see how someone like him, who has this very good macro perspective, who can be positive on equities, positive on commodities, a whole wide range of things, which gives him a lot of respect. Him now appreciating Bitcoin as something that we can't ignore anymore. And that's really his stance. It's nothing more than that. It's look, it's the fastest horse in the race. It's something that I'm willing to put 1 or 2% of my portfolio in. That is enough to make institutions start to go. You know what, we either need to start providing these products to our clients or we ourselves want to get some exposure. What you see with Paul Tudorgens is he took on to be completely fair, not physical or actual ownership of Bitcoin. He took on contracts. In this case, I'm interested to see if he's going to actually start taking real ownership in the underlying asset. But above all, this message itself is providing a ton of respect to bitcoin and digital assets as a whole and it shouldn't be ignored.

Dan, do you believe in this narrative that the greater institutional presence we see in the bitcoin space will lead to mass adoption as they say?

I definitely think it's a big step in the right direction. And as far as you know, your question about what's going on behind the scenes, we're always going to find out after the fact. So these billionaires, they build their positions and then they tell you about them and then the price usually goes up in response to that. It must be nice to be able to have that kind of clout where all you have to do is say you're in a position and you're instantly in the green. But yeah, there's definitely, I think, a lot more going on behind the scenes. Anything where there's big money involved, you know, there's something going on behind the scenes that the public doesn't know about and we find out about it after the fact. And again, this is just this, this news is just going to spark more institutional interest and then we're going to hear about it after the fact.

Tip of the iceberg, Right? Great. So now the moment we all been waiting for. Let's take a look at what's going on with bitcoin's price. Right now I'm looking at the chart. It seems like we're at about $9,700 at the moment, which brings us up over $1,000 since the end of the bitcoin halving. And I'd like to steal a question from one of our audience members actually, who says. This is from Jago, who says, do you think we will go sideways for a while? Weeks in parentheses. Now, after the having. Nicholas, are we going sideways or are we going up?

Yeah, well, I actually, if it's all right with you, Jackson, I'd love to share my screen and stuff because I have a chart that actually it plays pretty good into that question. So let me go ahead here and let me know if you guys can see my screen. Good.

Yeah, awesome.

All right, so one thing I wanted to talk about, just stepping out here, we're taking a look at the daily chart. I'm actually going to go ahead and switch over to the weekly real quick. But this is the logarithmic chart on bitstamp for bitcoin. Now to this kind of thesis of bitcoin pushing sideways, I actually think there's a very plausible case scenario where we do push sideways for a prolonged period of months, possibly going into most of the summer. And the way that I generally see this happening is that we get another week or so in continuation of the cycle, up to about 11,000. Now, why is this significant? There's a few things to observe here. First off, if we do actually commit to breaking towards 11,000, we'd break past a long term line of resistance, a really long term wedge for bitcoin. And what I think we're going to see here is not only a head of resistance here at a very significant line between multiple resistance and support points. This is going to be 11,000, but we're going to push sideways and actually hold support on the previous line of resistance. The reason I think this is really important is because we can see over here, taking a look at the gold chart here over the long term that we actually had a very similar formation here, a very long term wedge from the previous cycle also including the bear market. And we can see here that over the course of multiple months, about four months here after we broke out of the line of resistance for the first time since all the way back here in 2011, we came down, found support and we've continued on to the next cycle here where gold has made a very nice leap up in price. So again I think we're going to see something similar here for Bitcoin in regards to the price action. And one thing that I think is important to keep in mind as well, why I think we could push sideways for so long. It's important to note that the cycles for crypto markets are getting much longer. Each cycle is adding about 11 to 13 months. So you can take a look back here at the first cycle where it was 11 months. The next was 24, nearly two years. In this case. We have 35 months for the third cycle and 47 months here looking for a top somewhere around 100k in November of 2022. So again, accept the idea at least. The thing I would probably propose is to accept that it's very likely we could see not only longer cycles, but a push for the next coming months as we've had a pretty strong rally off the rebound at $3,800.

Great, thanks. How does that compare with your charts, Dan?

Sure. So it's fairly similar. I'm watching this longer term pattern as well. And there's two ways to look at it. We can look at it with trend lines. I personally prefer price levels because trend lines are very subjective. You know, am I gonna, am I gonna use the wicks? Am I gonna use the real bodies of the candle? Even just an eighth of an inch can be a difference of hundreds of dollars in the price. But price levels are concrete. So for me the most important short term price level is 10,522 and anything under that is a lower high and we would then expect to pull back and look for a higher low. The scenario that Nicholas is talking about is also something I'm watching on a longer term timeframe. Where if that 10,500 level breaks, it doesn't necessarily mean we're going to rock it. It's just another point in favor of the bulls. And I would then zoom out to the two month time frame where every candle is two months. And I'm looking at the big breakout to the all time high, the big pullback to the low of 3,000, the lower high at 13,800. This is a very important level for me as well. If I had to pick the two most important resistances, 10,500, 13,800, we then dumped back down to the low. Three thousands held support nicely and we're bouncing again. So the scenario that Nicholas pointed out, where if we go up to 11,000, it would still be a lower high compared to 13,800 and we could then tighten up, and that was something that I was going to mention, is it could potentially be a fairly boring summer in the sense that if we do top out and then look for another higher low in this pattern, we could be looking to the fall for that to eventually break. So I am watching. 10,500 is the most important short term level. But just breaking that alone won't be enough for me to be full steam ahead for the Bulls, because 138 will be something that I'm watching as well. One more note that I want to make is I have to admit that I'm very impressed with these two bounces, both on the weekly time frame. Well, first off, I was disappointed in bitcoin with the rush where everybody liquidated in fear in the broader markets. But to their credit, the bulls definitely recovered in a very significant way. This weekly bounce is more significant than I would have anticipated. Normally, when you see this kind of volatility, you're going to look for a tightening equilibrium pattern. And the fact that we're getting this close to that 10,500 top is showing me that the bulls have a lot of momentum behind them. And to go along with that, the same thing. This pullback just on the daily chart recently, this 20% pullback, the fact that we're bouncing right back up under 10,000 again is another point in favor of the bulls. Yes, it could just be a lower high compared to $10,079. And this range could tighten up into next week. That's something I'm keeping an eye out for. But the fact that the bounce has made it this significant. And fib traders, I'm not generally a fib trader myself, but those who are using fib retracements would point to how significant this bounce is. And I would certainly agree with that.

Yeah, it seems like there's certainly a lot of bullish signals and not only coming from you guys, but it seems like there's a lot of bullish hype in general about the heights that bitcoin's price could reach in the next couple years. There have been multiple billionaire investors like Tim Draper and Dan Moorhead who have you said that bitcoin could reach over $100,000 and beyond in the next few years. And Nicholas, you also just said that we could potentially see $100,000 bitcoin price in 2022. With such strong beliefs and high flying price predictions, what do you think is the likelihood that bitcoin will just do the opposite of what everyone is expecting? Nicholas?

Yeah, I could definitely dive into that. So I not only want to talk a little bit about my rationale for believing those price figures, but to answer your question, Jackson, I think it's a always a probability. And I always tell people with bitcoin being such an early asset, we are in kind of the wild wild west days of crypto. So it's like investing in cannabis stocks or a lot of other kind of new industries, except the idea that it could go down to zero. And if you want to, for example, maybe hedge against that potential event, then in that case it might be good to set stops at like midway on your position or something like that, where you take a 50% loss, something like that, if you wanted to set those measures. But the reason I believe fairly that we could see those kind of valuations for bitcoin is not just simply because when moon. Right. I'm not just basically trying to name random price figures. If you take a look not only at things like the logarithmic chart and the stock flow model, you can start to get an estimate about where price should be at a given time due to the actual distribution of bitcoin per block. But more importantly, the thing I would stress to people, because a lot of people have a hard time grasping, how could bitcoin go to $100,000? It seems way too expensive to not think in terms of price because bitcoin has a limited supply of 21 million coins. To think about it more on a valuation sense. So if you're going up to a valuation of $100,000 for Bitcoin, that would make Bitcoin a $2.1 trillion market. Right now, again, we have to denominate that a lot of the currency has been lost. So in this case you're probably shooting for something around like 1.5 to $1.8 trillion valuation. So keeping that in mind, let's compare that to some other markets, right? Gold. Right now, we haven't even gone through the full cycle for gold, at least from my analysis, and we're sitting at about a $10 to $11 trillion valuation for gold markets. For equity markets, we're talking about tens of trillions of dollars, not just in the United States, but globally abroad. And if you're talking about the greater bond market and deposit market, you're talking about hundreds of trillions of dollars. I think this idea that bitcoin can't capture a small piece of that, I think that's what a lot of people tend to miss or not really see in the sense of scale. And I think that's exactly what Tim Draper, Mike Novogratz, a lot of these people, why they can confidently toss up these figures even though they might be a few years off. I think people just have eager expectations for it to happen. In reality, at the end of the day, it's a matter of market to scale. Bitcoin right now is about 170, $80 billion market. It's very, very small.

Dan, do you also think that the numbers back the hype?

Well, the number one thing that'll make me question my confidence in a trade is when I look around and everybody has the same opinion as me. I view it as a boat and everybody's on the same side of the boat and I don't want that boat to tip over. So whenever we start getting everybody hyped up, it's always my first red flag for caution. And that's generally referring to short term price. I always tell everybody we don't know what's going to happen. Even as technical analysts and traders, I'm not predicting what's going to happen. I'm reacting to what I'm seeing in the short term. And the number one thing that we have to do is plan. Plan for both scenarios, plan for the big bull break and new all time highs and the hype to return, and also plan for the possibility that that does not happen and we fade back down towards 6,000 into the fall. You know, what are you going to do? And having that plan is so essential to ensure that you are not reacting to your emotions. Because those who are reacting to their emotions, those traders that have experience are going to feast on those emotions. And if we have our clear game plan, okay, if bitcoin goes to 6,000, I will do this with My current position, maybe I'll enter some more. If bitcoin keeps breaking out, I will do this. I want to sell here. Having that laid out so you can go to that plan at times of high emotion is so essential. So I'm absolutely open to the possibility that we break 20,000, you know, see a big bull move up, see hype return. And as Nicholas points out, absolutely, the valuation has a lot of room that it can grow. If we're talking macroeconomic scale, if we're talking comparison to these other markets, it is still very, very small. So I am absolutely open to the idea that it could go to 100,000. But by no means am I dead set. We're going to 100,000.

Yeah. One thing to build on your point, Dan, and stuff. It's not only great, as you mentioned, to have like two trading possibilities, so it might be that you're not in a scenario right now where you have to take a position. We might wait for that confirmation on the breakout outside the line of resistance. Or you might have something for a potential trade around 5 to 6,000 if we get lucky and prices go down that low. But the one thing that I always emphasize, and I think you'd probably agree, is that right now it's important not to make silly mistakes and as you mentioned, get caught up in trying to trade very short term variations in price, especially on things like trading margin. I think in this market, the one thing that has become almost like a cancer in this space that started to weigh down a lot of people and really knock out a lot of traders who could have been profitable in the space quite easily, as bitcoin has a pretty historical record of being profitable. At the end of the day, I think a lot of people are getting completely liquidated, losing their entire funds, and it's almost acting like a casino. And that's not what crypto is meant to be. At least in the case of bitcoin in regards to its logarithmic chart, we can see that over time in the last 10 years, it's acted as an emerging, in my opinion, an emerging store of value. We're not there yet, of course. We're very small. The market is still developing. So it's a matter of looking for those higher lows and those higher highs, as Dan mentioned too. That's what I look for as a macro trader above anything.

Yeah. And be careful when you leverage.

Yeah, absolutely. I want to piggyback on that as well because we were talking yesterday, Nicholas and I, and the rate at which we're seeing the crypto space rush towards leverage and how education is lagging behind. That is a very dangerous combination. And you see the stories of people liquidating their entire accounts and think of not only the short term psychological impacts that that's going to have on those traders that just lost all their money, but now think about, okay, maybe in two years we do go to 50,000 Bitcoin and they're going to be sitting there watching that happen, knowing they got liquidated and it's just, you know, beating the horse while it's down. So I personally have my anti FOMO position, which is my long term no touch position. I will ride that to zero, don't care. And that right now is 1.5% of my net worth. So very in line with what Paul Tudor Jones is doing. And when I see setups that I like, I will increase that exposure and when I like the risk to reward for that increase. And currently we're not in a point where I like that, but I'm always open to adding more. But I would highly suggest that everybody does have an anti FOMO no touch position, if you believe in this space because that can help you psychologically and emotionally on short term price action. If you know, okay, I missed this move, but I'm still benefiting from it because of this no touch position.

Yeah, it's really the insurance policy at the end of the day for like a hedge against everything that could be the doomsday scenario of the dollar collapsing or equities having a mass sell off or something going wrong in treasury markets. So I completely agree. I think that's the thing that everyone should look at if they're even just interested in Bitcoin, treating it as that kind of hedge investment. In that case, to have as a portion of your portfolio, you wouldn't want to miss out on it. But at the same time, if it were to go to zero, as we talked about in that potential scenario, it's not everything in the world. Your other assets will usually provide the yield to outpace that loss if it were to go down to zero.

Yep, great. So I would just like to remind our audience chat, if you have any questions for our guests, make sure you're typing them into the chat below the stream. Our team is there, we're looking at them, we're checking them out. And if you're enjoying the content so far and you can't wait to see the next show, make sure you hit that red subscribe button below the stream. Now I've got a fun fact for you guys. Interestingly, on Block629, 999,000, the final block of the 12.5 era, Mining Pool, F2 Pool printed a New York Times headline which was titled, NY Times April 9, 2020 with $2.3 trillion injection Fed's plan far exceeds 2008 rescue. The transaction referenced an article of the New York Times that compares the current financial Crisis to the 2008 collapse. This appears to be a pretty clear reference to the inflationary policies of the modern financial system, which are believed will propel scarce assets like bitcoin to greater heights. Dan, what are your thoughts on the implication of F2 Pool's message? And why do you think they decided to print this message on the last block of the 12.5 ERA?

So that message definitely is in line with the message of Bitcoin and what Bitcoin was birthed out of the 2008 collapse. And I personally have a bit of a history where I was actively involved in the Occupy movement. And that really allowed me to very quickly jump on board and say, okay, I can understand the point of bitcoin. I can understand what it is looking to do. I have an intrinsic distrust of the government and our financial systems. And my experience in the Occupy movement also made me a bit jaded because I also am not discounting the ability of those that make the rules of this game, which is the Fed and those large banks that are controlling everything. I'm not discounting their ability to change rules and keep this party going for themselves. Kick the can down the road and everybody's looking for the collapse and the house of cards to fall. And again, I have those two mindsets. Absolutely, that could happen. I can see all the setup for that to happen, but I can also see the setup where nothing happens in the next five years. That's going to be this major catalyst that everybody's looking for. And the Fed prints itself into more time, essentially. So I think that it is very much in line with the message that bitcoin is trying to get across to everybody. And I think it's very fitting for that reason. But I am still a bit skeptical of the impending collapse that everybody is looking for.

What are your thoughts on this, Nicholas?

Yeah, to kind of go with Dan on that and stuff. Again, I'm always usually much more of an optimistic type in this case. So, like Dan was mentioning, even though there is that possibility of a doomsday scenario, maybe we go into a depression over the next few years, which it's looking like it might be likely if we continue the way we're going right now. But again, I always keep up to an optimistic position just to put it through my actions. For example, before I started investing in cryptocurrencies, I was doing equities investing for the last few years and a bit of equity trading as well in a lot of emerging tech sectors. And I realized you can't bet against quantitative easing to try to bet against the Federal Reserve. And, and these tools with all of your capital is a pretty difficult position. Meaning like trying to short the market or trying to bet against the excessive printing machine. The only thing that I would say that I get optimistic about during these kind of times when there is more risk, is looking for a new asset class, something that's not only small, so it has a lot of room to grow, but could provide for that kind of insurance policy as we talked about, in case things go wrong. And I think that's really what bitcoin is. I think Paul Tudor Jones as well as other institutional investors like Mike Novogratz and Chamath, they've started to kind of realize this over time. And as you get more and more names, it starts to become a viral network effect where people start to really respect bitcoin as an asset. It doesn't happen overnight. It's very difficult to build a trillion dollar asset class. We're not even there yet. I think that that's what we're going through right now. And to your point about the block and everything, where they actually instilled the message, I think definitely it's a homage to basically what Satoshi did in the first block in bitcoin. And it showcases that unlike that time around, Bitcoin really wasn't a developed asset back in 2000, back in 2009 and stuff when they actually had the first printed block. So in this case we now have a really interesting opportunity to see bitcoin not only post having event, but also in this macro environment where there are trillions of dollars of liquidity moving every month between different markets, can we see crypto gain a little bit of that valuation? That's what I'm curious about.

Yeah. And we touched a couple times there on the Fed's money printing policies and money printer go brrr and all that stuff. And one of the things that's really benefiting from this era of money printing is the S&P 500. And a number of people have pointed out a correlation between bitcoin and S&P 500 in the past couple months. And we have some questions from the chat, who are also. Some people in the chat are also very curious about this. We've got Zane Ross who is interested to know will we anticipate lower bitcoin correlation? And I think there was another. Yeah. Felix Kim is wondering, have we now decoupled with the stock market? Dan, I know you have some thoughts on this. How do you see the bitcoin's correlation with the stock market given that that the stock market is being kept afloat by these inflationary policies?

Yeah, so I've been involved in the cryptocurrency space and trading pretty much. This is my three year anniversary, so May 2017. And since then I have always been watching for correlation because correlations are such a significant part of my trading. When I'm trading stocks I'm watching the S&P 500. I'm watching correlations to that on individual names and it's very important to me. So I've always been watching for bitcoin correlation to these, whether it's the stock market or gold or whatever it is. And I haven't seen anything notable. 2017, 2018, 2019. This year it's gotten very, very notable to me and it is something that I'm constantly paying attention to. Yes, the last three to eight days that correlation has shifted and I'll pull up a chart here real quick. But it is very notable. And I would say one of the most bearish things that could happen to bitcoin is if it just mimics what the S&P 500 is doing. So looking at this chart right here, it looks very, you know, messy and confuddled, but it's, it's because they're so similar to each other. Half of these candles are going to be the S&P 500 and the other half is bitcoin. So they dumped the same. They had their little bear flags on the way down. They bounced roughly at the same point. And again it's just the last few days and it's a bit different. It's hard to compare because The S&P 500 trades five days a week. Bitcoin trades seven days a week. But we can see the last three days the S&P 500 dropped and it's bouncing today. And then the last three days Bitcoin shot up and it's pulling back just a little bit. So pretty inverse the last three days. But it's something that is going to be very important for me personally because honestly back here when this was all happening, I was trading the S&P 500 and those leveraged instruments with zero fees. And I'm saying to myself, why am I going to be trading bitcoin right now with exorbitant fees when it's doing pretty much the same thing as the S&P 500? And it's granted, it goes up faster and it drops faster. So it's almost like a leveraged version of the S&P 500 when it is so correlated. But if you are a bitcoin bull, you want to see this correlation break, because the last thing you want to see is it just doing what other instruments are doing. And again, I said I was a bit disappointed in bitcoin. The fact that we did see such a mass liquidation of everybody. I think of it as life rafts. And we had the life raft of the dollar where that was the savior over the last two months for the coronavirus. We had stocks rush into US Dollars, sell off and rush into the dollar. We had bitcoin and cryptos sell off and rush into the dollar. And I did the same thing. I was looking to protect my assets. I was in conservative mode. I went US dollar with everything. I felt like a turtle pulling inside my shell. And as long as that is the life raft, that's going to keep happening. And that's historically what has been the life raft. Now, if you start to see the weakness in the dollar, and if you start to see distrust in the dollar, then we can start seeing perhaps people going to the bitcoin life raft. But until we see that dollar weakness, I don't think we're going to see the kind of mass movement into the cryptocurrency space that a lot of the bulls are hoping for. So I'm sitting in my US dollar life raft for the majority of the time, and I have my plan for what I'm going to do to jump into this life raft if I need to. But at this moment, things are fine and I don't have to make that leap. So I'm watching the dollar very closely. I'm watching the correlation with the S&P 500 closely. And the bitcoin bulls are hoping that the last three days is going to translate into a break in that correlation, ideally for as long as possible.

Nicholas, are you also strapped into your US dollar life raft, and do you also see the bitcoin correlation with the stock market as an overall bearish signal?

Yeah. So I would agree with Dan on a few points there in regards to a continued correlation that would be very concerning. The one thing I always stress to people is That a correlation over a week or two weeks isn't really that much of a concern for me. So I'm happy to see that we are getting some disparity away. But either way, I would look more than anything at the longer term trend. And so far I haven't seen something that worries me too much. If we continue to see it. 100% agree. The thing about what Dan had brought, that I think is a very good point, is that bitcoin itself doesn't really pride itself as being a general hedging, it's just printing. In this case, everything will usually react to printing. Equities recorrelate. After we had the liquidity crisis over and the Fed started injecting money at rapid rates. In this case, equities went back up because you have guaranteed buyer to equity markets and a lot of that as well. You've got the same for bond markets as the Fed in this case is promising to buy up government bonds basically of all these different markets that there is a guaranteed liquidity provider. And if we actually take a step back to what Paul Tudor Jones said, he actually had a graph in his report that he put out that actually quoted in this case, or at least by his fund that had quoted that equities are actually their prime hedge in this case against central bank monetary policy or the great monetary inflation that the Fed is going through alongside other central banks. He had bitcoin ranked as number four. It was the last asset on the list as a potential hedge. And I think this plays into Dan's point. The problem that people see sometimes is that they think that bitcoin will be the best asset right away to react to excessive money printing most of that liquidity, you have to ask where is it going initially? And it's going into equities. And even though equities are a much larger market, it is going to have a much more substantial effect on equities versus directly on bitcoin. Now there is the case scenario where we print so much money and eventually those dollars start to get into the economy and we get excessive amounts of not only inflation but velocity and prices start going up. We start to really see how much money the Fed has printed. I don't think we've really materialized that yet. Even though we know the numbers, it's what happens when it comes into the actual economy. When that happens, and as we continue to get more stimulus programs, you're going to start to see people realize that their dollars aren't purchasing as much. And then as you get negative interest rates at the Fed, you're going to start being penalized for having money in your savings account or have a penalizing yield on your Treasuries. We already started to see negative treasury yields in the United States for the first time in history back a couple of weeks ago on some of the shorter term maturity government Treasuries. When that happens, when you start getting penalized for owning dollars and your dollars are purchasing less and they see that during the time when the Fed has got the money printer going, brrr, and the price of bitcoin is going up, they're going to start thinking maybe I should get a little bit of exposure to that if there's a way to get exposure to it.

Great. That was very insightful. I'm seeing in chat now that there have been a lot of questions regarding altcoins and bitcoin versus altcoin. So I think this is a good time to touch on the altcoin market because we've been talking a lot about bitcoin. We've got the passenger who says, what are the best altcoins to trade? Filippo Mazzini, what do you think about alts versus Bitcoin and crypto King wonders, you know, will there ever be an alt season? So let's start by one asking, you know, bitcoin dominance versus versus altcoins? Do you see as the, the having as like in a way cementing further bitcoin dominance? Do you think there will ever be a time for altcoins to rise up and close the gap? Let's start with you, Dan.

So yeah, there's always a time for altcoins and generally I find the times where altcoins are thriving is when bitcoin just chills out a little bit, trade sideways and allow people to pretty much if bitcoin is going to drop, those altcoins are going to drop as well in the most part. And so if bitcoin is, you know, range bound and trading sideways, that's when funds start to go to the altcoins and can start to move them more significantly. So I absolutely think that we saw a big uptick in the bitcoin dominance leading into the having because bitcoin's getting all the headlines, getting all the attention and the altcoins that have been standing out to me recently are, you know, link's been standing out, XTZ has been standing out. Of course, eth always have my eye on that. That's the first crypto that I ever got interested in. Once I started exposing myself to the space. So I'll always have a little special place in my heart there for eth. But it's always worth watching those charts for when the opportunity presents itself. And you know, right now I'll share my screen real quick. Looking at the bitcoin dominance chart. This is the monthly timeframe. We had a little monthly pullback and a lower high and lower low without a whole bunch of follow through. So this is still a very healthy chart. And this bitcoin dominance can continue to climb in my opinion. Another chart that I am keeping an eye on is the ETH BTC weekly chart. Because again, when you start to get familiar with these patterns, you can say, okay, this is a big broad equilibrium where we have higher lows and lower highs. There's a very key support down here at 2019 and we are currently coming really close to that support. So if I'm a trader, I can say, all right, well I can make a play off this support, very low risk, maybe put a stop loss a bit below it. And if the most likely scenario plays out as I would anticipate, we will bounce, hold that level and then just see this range continue to tighten. So there will always be opportunity in the altcoins. There's definitely recently more opportunity in bitcoin, but certainly never want to fall asleep on the altcoin space in my opinion.

Nicholas, what's your opinion right now of alts versus btc?

Yeah, so I take a similar position to DEN and stuff. I don't think we've really gotten to the point where the trade is very clear. I took a position and I was, I was very fortunate back in September where I actually flipped the dime and I turned bullish on altcoins. So I'm mainly positioned in altcoins at the moment. I do have some bitcoin exposure as well as in my outcome portfolio, have some exposure to some of the larger plays like Ethereum. The major thing that I always emphasize, and I can share my screen here real quick just to provide little details is I actually, when I'm looking at altcoins, I actually look at an inverse chart of bitcoin dominance because I like to think on the bullish case scenario here, in this case of whether or not it actually took a long position on when altcoins are gaining. Right. And you can do it vice versa instead of as Dan had mentioned on his chart. But one thing you can do is type in 100 minus BTC D into TradingView and it'll actually take a hundred, basically 100 point value and subtract whatever bitcoin dominance there is. So you actually get a chart of altcoin dominance. You can see back here in 2017 where we had the major rally where altcoins took up over 64% of the market from down here at 3%. So there's a few things I always mention here. First off, to take a look at the long term wedge here similar to bitcoin, we've got a very long time period where we have not tested against below the line of support or above the line of resistance. That has really weighed down some of the more significant price levels along with that as well. In the shorter term we did get a breakdown with the halving event outside of a small short term wedge that we had here. So I'm looking for possibly a third retest here to this line of support for an eventual rebound back upwards. Our original projection that we had was that this could possibly after the having come through and start to come up and make support here. I think generally speaking what's going to change about this is that it's just going to take a longer period of time. We're going to come down for this low, we'll come back up to bounce against this resistance, press up higher and much like we had drawn here, we're going to have that multi week retest and eventually as bitcoin starts to get back up towards its previous highs, I don't know exactly when that will be. Probably sometime in the winter of 2020 or sometime in 2021 when we eventually start to get above 20K. That's when the next speculative cycle comes in and we have a very high opportunity of hitting the next altcoin cycle. One thing I do want to mention as well as we're on this topic is if you actually take a look back and when altcoins actually kicked off, there are two periods of time where altcoins actually did well. The first one was when bitcoin got back up to its previous highs. So that was back for example. And I'll just pull up the chart here. We bring it up here real quick. We had the first altcoin cycle here in this case when we got back up to the previous highs. Let me get it actually on bit stamp so we have a little bit more price action. So I can show you guys basically right over here. This is when we kicked of this all the first altcoin cycle in early January of 2017. That's when Eth XRP, Litecoin, all these plays started to enter into a billion dollar territory. So we started to get that first initial kickoff in altcoins and then the second one was after we reached the peak of the cycle for bitcoin. So as we started to see bitcoin drop from around 20,000 downward towards around 13 to 14,000, that's when you saw XRP take off to new highs. Tron Rip or so we already mentioned Ripple, I guess Verge, a lot of these other cryptocurrencies that started to commit up to 50 or 100 x's in their valuation, that's when a lot of that happened. So again, crazy stuff went on at the peak of the cycle and also when we revisited back to the highs here, I'm sorry I don't have really good visualization to show it, but if you take a look, you can actually use the compare feature here on Trading View and type in a few of those. For example, as Dan mentioned, ETH to btc, XRP to btc, LTC to BTC pairs and you can start to see that that's when we had a momentum swing for all altcoins during those periods of time. So I'm waiting for that breakup to 20k before I really think we're going to start to see any significant breakout.

Nicholas, you mentioned before that you actually have more of your portfolio in altcoins than you do in bitcoin. Would you mind sharing just briefly what altcoins you're currently looking at? Which ones are catching your eye?

Absolutely, yeah. So there's a few different things and to be fair, it is a mixture of not only really good technical price action, but also so a good mix of fundamentals where they actually have utility demand for the token. So the first one that I think is going to be really interesting over the next few months is obviously, as Dan mentioned, Chainlink. Chainlink's chart has consistently set generally higher lows and has generally been pressing higher highs. It's been one of the best performing altcoins in 2019 and has continued to show strength in 2020. So I think that link is going to be a big one. It's one of my larger positions along with that as well. Kyber Network I'm really interested in the decentralized finance space and I think that we're seeing decentralized exchanges become a much larger probability of actually scaling out. I've been a fan of the project since 2017 and I really built up a decent sized position here in the earlier part of this year and so far it's performed really well. I think I'm up about like 2 to 2.5 times compared to Bitcoin on that position and then outside of that as well. Basic attention token this is one created in tangent with the Brave browser. So the Brave browser has gotten over 10 million users back a couple of months ago, so it's going to be one of the larger browsers in the world. And outside of that there is a way for you to actually earn the token in this case for your attention on the apps. If you look at the chart though, though the technical analysis side of things doesn't look too good. I care about some really interesting factors that people don't look at. For example, most of these tokens have a limited or finite supply similar to Bitcoin, and the basic attention token is only a few million tokens away from reaching that max cap supply. So I think when we get to that point, if advertisers want to lock in space and basically lock in the ability to purchase a certain amount of attention on the platform, in this case they're going to want to have ownership of those tokens. So there is a real almost utility or ownership in that case to the Bat token, which is the retention of users in that case for buying ad space throughout the Brave browser. So I think that that's going to be a really big one that will start to shoot up here in the later part as we go into the altcoin cycle.

Thanks for that Dan. I know you mentioned Ethereum earlier. Are there any other altcoins that currently are catching your eye that you're looking at a bit more closely?

Like I mentioned Link and XTZ as far as technical strength, but I have commitment issues with holding long term positions in anything. So I'm a day trader by heart and I love being in and out and locking in those gains. So my long term holdings are BTC eth. I have a very small bit of litecoin that I received for some payments and stuff that I'm just never gonna touch. I'll leave it if it goes to zero, but other than that I struggle very much to hold long term positions in altcoins and equities as well. I am very much a quick in and out kind of trader and I have great respect for those that are able to sit through massive fluctuations and stay true to their commitment on these long term holdings.

Great, great. So now I'd like to move on to our last topic. I don't know if anyone in the chat managed to catch our stream on May 11, the day of the Bitcoin halving But, but, you know, we were live for almost seven hours before YouTube suddenly out of nowhere just cut us off. It's still unclear, you know, why this happened. I saw in the chat that Dimitri Pasculin had, you know, was wondering what happened to our previous stream. We don't know, you know, like, it just, it just went down out of nowhere. And you know, we've seen this happen to numerous other streams, crypto content creators and YouTubers including Ivan on Tech and the Moon. And I also saw on the day of the bitcoin having, there are a number of like, you know, 5,000 BTC giveaway YouTube streams going on, like Steve Wozniak and like other things that looked, looked pretty scammy to me in all honesty. Have you guys had any conflict with YouTube during your time creating crypto content? Nicholas?

Yeah, I can not only relate to you guys in regards to the censorship or not. I wouldn't even call it censorship really. I don't think YouTube's per se trying to censor crypto, but I have had my videos randomly removed. In fact, just like you guys, I was doing a live stream on the bitcoin having event and we later on, about an hour or two after the stream had closed and it was uploaded on YouTube, we got a random warning, basically a flag on YouTube and it was for violating, you know, one of the guidelines for like harmful content. And we didn't promote anything violent or anything. It was a really happy and joyous event. So I think, honestly, I think what's happening right now is not so much YouTube wanting to censor crypto. I think that they obviously want to provide a space to talk about it. The problem I think is that there's someone abusing the mechanisms of flagging content on YouTube or YouTube's like basically their automatic AI in this case that actually goes out and spots content is finding certain keywords or key terms that are discussed about in the video. Whether it's the words we speak throughout the video for, or the actual description or the title or the thumbnail, all of that gets analyzed by YouTube system. So in that case, I think that it's a mixture of those things that are triggering these kind of events. And if someone flags it for violating a certain part of the community guidelines, I think that combination really sets us up for a potential risk where random videos can start to get flagged. Luckily I was able to get it removed and the video was uploaded later on. But YouTube seems to be getting better about it. It was really bad a couple of months ago. I Had it. I've already had it happen like three or four times in the past, but I think they're slowly catching on to fixing it.

Yeah. Dan, has anything similar happened to you?

So not with regards to crypto content. We've been fairly lucky and very fortunate in that. And when that was going on a few months ago, when everybody was getting flagged, we kind of just were ducking our heads and peeping out like, hope they don't get us. But yeah, no, nothing with crypto. But onto Nicholas's point, there are people out there that abuse the system. We have an intro to trading options video that ranks high on Google and we could see, going back to our analytics, there was one day where somebody put a bunch of Russian bots to attack that video. And we got like hundreds and hundreds and hundreds of downvotes and if you look at the down votes in history, there's just this huge spike and it's very clearly someone was attacking our video trying to get us knocked off those rankings. So definitely I would agree in the sense that there are people that are abusing the flagging system and that's leading to a lot of the issues.

Yeah, thanks for that. I've got another question from the audience. Who it's from Mike Vish, who says, how much time each day do you guys spend trading and how much time a day do you guys spend creating content? Nicholas, do you want to share what your daily timetable looks like? A little bit?

Yeah, definitely. Sorry, I was cutting out there a bit, but just to dig into your question in that case, was it about how much time we commit to trading and what our kind of day to day look like?

Yeah, yeah. Trading and content creation.

Yeah, absolutely, man. Yeah. So I started off my day basically going ahead and creating, not only doing a little bit of research in the morning for about an hour to two hours, but along with that as well going through and actually producing the content that I put out for the channel. So anything that I decide to talk on in the video, I usually am spending a good about an hour or two just actually analyze the market. I've actually stepped away a little bit from doing any kind of day trading. I do it on a very, very rare occasion with a portion of my portfolio. For the most part though, I've been actually just really kind of building my positions, taking cash that I have and building up positions for the broader cycle in crypto as well as other asset classes. And right now I've actually been working on a startup behind the scenes that's been taking Up a good amount of my time that I'm really excited to reveal it. I'm going to be bringing it live in early June. So I'm really excited to talk about it. I can't discuss much right now, but the major thing is if people wanted to keep active with it and stuff. There's a link in my description of my content called banking for the 21st century calm, where people could actually go and actually sign up for it. But yeah, I'm really excited. That's what's been taking up most of my time and just continuing to study further the macro environment outside of crypto right now. So that stuff has been taking up my day and it's been keeping me with work 24 7. Awesome.

Glad to hear it. Dan, what about you? What's what. What is a day in the life of Dan McDermott look like?

Oh boy, lots and lots of hours. So on a weekday I'll wake up before the sun and I'll put in two hours of preparation and I started, you know, I'm trading, I'll probably trade on average maybe four, four days a week. And I started to do both at the same time, content creation and trading. So getting two birdstoned at once. I will livestream and create content for members while I am trading. And aside from that, you know, after the market closes, it's honestly I'm putting in maybe six hours into trading during a regular day and maybe three to four hours of content creation. And then on weekends, I mean I'm waking up before the sun on weekends and I look forward to making videos. So seven days a week, it's a nonstop job and I love it.

Great.

I think. One last question from the audience. This is from Tesporta4Q. He's wondering what brings in more money, video or trading. Nicholas, do you want to share?

Yeah, yeah. So for right now I would say in practically most times and stuff because I got in my first kind of crypto positions between 2016 and 2017. I would say on a day to day basis it's probably more on the investment side. I don't have a crazy amount of money by any means, but at the same time I have done pretty well in the sense of my investments as I've been focusing on longer term cycles. But we also bring in a good amount in the sense of our content and stuff because I think just like Dan and stuff, we both produce a lot of content. There's a lot of ways you can monetize your content, whether you do sponsors or if you have referral links. And also we take donations as well through Patreon. So some days it can vary. If crypto markets aren't very volatile, then we maybe make more on the content side.

Cool. What does it look like for you, Dan? Trading versus content creation.

So for most years, it's trading over and content creation isn't where I would make my secondary income. It's through membership services to the chart guys. So for the most part, it is trading. But after hitting the cryptocurrency boom and the marijuana stock boom, I've scaled back my trading. I'm more in a conservative mindset. I'm not nearly as aggressive. So we're starting to reach that point where it's, it's starting to change a little bit, but very similar the past year or two, I would say.

Great. Well, I think that concludes our discussion. Thank you, Nicholas Merton, Data dash, and Dan McDermott from the chart guys for coming on the show. And I'd like to say thank you to all of our viewers. There's about almost 600 of you guys here. Thanks for watching. Thanks for your questions. I thought they were really on point. If you enjoyed the show, make sure you hit that subscribe button so you can tune in next week. We have the show every Thursday. Or if you just enjoyed watching this time. I'm your host, Jackson, and this was Cointelegraph's Crypto Markets Live. See you guys soon.