Bitcoin to $20K by Year End? | Alessio Rastani Vs. Charlie Burton

The Twitter space, the Instagram space. 90 odd percent of the people who are posting on there don't know how to trade anyway.

I could see 20,000 on Bitcoin by January this year.

If you put your money on the line and then you can't ride it, then what good is that?

What's up everyone? Today I'm excited to announce that I'll be joined by two legendary English traders, Alessio Rastani and Charlie Burton. Alessio is probably best known for his viral 2011 interview on BBC News, the.

Governments don't rule the World. Goldman Sachs rules the world.

And Charlie was also featured by the BBC in a 2014 documentary called Millions by the Minute.

One of the biggest things that most traders get wrong is a lack of discipline.

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How are you guys doing today?

Good. Thanks for having us on.

Yeah, yeah, very good, thank you. Let's see what Alessio's got to say here.

Yeah, thanks for coming on. Really appreciate it. So, as you know, Bitcoin's been kind of steadily consolidating since its latest big move on October 25th. Could you give us an idea of what you think is going to be the next move for Bitcoin and when do you think that move will happen? Either of you can take this question.

Well, I guess I can start off again. Thanks for having us on. I appreciate having me on as well. Basically today as we're making this video, in fact, bitcoin has sort of dropped further, presumably to fill that gap that it formed after the massive spike high in October. I said before that my view still hasn't really changed. Essentially, I believe that the rally we saw back in October, I consider that as an impulsive rally. In other words, I consider that as not a correction to the previous drop, but more as potentially the Beginning of a potentially start of a new trend to the upside. So I think this is just retracing, filling the gap. And I'm looking to find basically if this is the bottom on bitcoin, which again, I still think this could be a bottom here on bitcoin. The bounce that we saw. If this is a bottom, which is my view, then it needs to hold support at 8,700 to 8,400. If Bitcoin closes the week below the 21 moving average, the 21 weekly average, which is about 9,000, I think Bitcoin may be in a bit of trouble there because that usually results in further losses, further drops down. As long as we hold the October lows and as long as we can Keep above the 8,700 to 8,487 to 8,400 is really my line in the sand. As long as we can hold above those support, as long as the bulls buyers can protect those levels, I still think there's a chance here that we could see this rally continuing further higher. In other words, we could potentially see further gains in the weeks ahead.

What do you think about that analysis, Charlie?

Okay, can I share a screen? Actually?

Yeah, go ahead.

I'll go into the other analysis in a moment. But I've got a trend line on here. As you can see very clear across the tops here, it's just a daily chart and we keep reacting to that trend line at the moment. So Michael Essio has been saying that 8,400 comes in with all these prior little cluster of price action down here. So I can see that the bitcoin could want to come down into that zone. Then we'd want to see it hold. And really a breakout of that trend line would be quite a nice key break for bitcoin. So that is something which I think is quite important. As far as the weekly charts concerned, though the weekly is already below the weekly. 20 or 21 is my 20 on here. So I'm not too worried about that. We broke that a month or two months ago. But overall, the bottom line is when I'm looking at these charts like this, what's the overall thing? The overall thing is that certainly since the beginning of the year we had this fantastic run and then we've done a pullback looking at the weekly charts, monthly charts. This is still a bullish market. It's just been in a bit of a pullback since it made the highs in the summer.

So, Alessio, on your YouTube channel, I've seen that you've Been talking about something called the wildcard theory. Could you just quickly explain what exactly that is and what you think the chances are of it actually happening?

Yeah, the wildcard just simply means this. The correction on bitcoin off the highs of near 14,000, near 13,800, we're going to be much more deeper below the 21 weekly average. We're going to plunge below that, going near the 8,000 to 7,000 level, maybe even down to 6,000. But essentially I was looking for 8,000 to 7,000 regions. And the reason I was expecting that is because I believe that the wild card simply means that it's going to make people think, oh wow, it's going to go drop significantly lower. In other words, people have to turn bearish for it to become a bottom contrarian. Thinking. In other words, what I was saying was we need to wipe out and take out a lot of the bulls. Bulls need to be taken out. The sentiment needs to get bearish again. People need to start thinking negative, which actually happened recently. People were calling for lower and lower figures recently, back in October, I remember. And we need to see that kind of sentiment changing, becoming bearish with people, with the public, and then moving to the 8,000, 7,000 region and then finding a bottom there and a bounce, a major bounce. And I was looking for wave one and two, wave one and two two being the corrective wave to complete and starting the wave 3. If this is the wild card scenario, then we should start wave three, the major bigger wave three, towards 20, 30, 50,000 soon, if we haven't already started it. I think as long as we hold the October lows, as long as those October lows hold, this could be the start of the larger wave three.

How do you feel about this wildcard, wildcard theory, Charlie, seeing as you don't really believe in the Elliott wave theory as much?

It's not necessarily a belief, it's just I don't use it. There's so many different ways to trade the markets. It's just not a way that I trade. But generally speaking, the way that I've been looking at bitcoin is from a long term sentiment perspective. Bring up the charts again. Is that, yes, we had that huge run into 2000 and 2017, and it was a big flag for me when my builder came round and asked me if he should be investing into bitcoin. And I knew that we were in a bubble at that point. I think we were probably about $10,000 at that point. That was a concern to me. When the masses Start to get involved and want to invest into something like bitcoin, then you know you've got to stay away because the masses are uneducated as far as trading is concerned. So what happened over the last year was a good thing and it did sweep a lot of people out of the market because a lot of people who were certainly the less educated in investing and certainly into cryptocurrencies would have probably just thrown in the towel. And I think we needed that, we needed to go quiet, which it did happen. And then obviously we've had this big run earlier this year which would have re tempted people back in. And then we've had this pullback over the last few months where I disagree. I think we need another period of consolidation, basically a continuation of what we're seeing at the moment. So possibly for another year or more. I'm not necessarily looking, I'm bullish on this chart. I'm long term bullish. But I'm not necessarily saying that I think that bitcoin is going to go straight up from here or even if it does pull back down to 8,000 or 7,000, don't get me wrong, I think they're great buying opportunities if you're a longer term investor. But I see that we could run back up to 12,000 and then we could pull back again. We could enter a range which would be enough to bore the masses that they'll end up just not being interested in. But actually what's happening, if it's building that range at some point, it'll then break that range and then the masses won't be on board, which is what the market almost needs. I think it's more likely going to consolidate maybe for a year, maybe a bit longer. It will go up, but it will pull back. It will keep on trying to put off the masses.

So where do you expect to see bitcoin by the end of this year? Because I know, Charlie, before you were saying you'd like to see some long term consolidation. Are you expecting it to be in the same range that it's in now?

Yeah, I have an interesting point of view on this. Well, I say interesting, but we'll decide what the public thinks about this. Let's say bitcoin goes above 10,000 in the next few weeks and close above 10,000. I think there's a very high probability by December or January we could see 20,000, at least 15 to 20,000 range. But I would need for that, I would need bitcoin to hold above the October lows of 7,300 and then take out the 10,000 level. If it can do that in the next couple of weeks, which is possible then because seasonality of bitcoin. Bitcoin is seasonally strong. If you look at historically the seasonal patterns on Bitcoin, the strongest period for bitcoin is between November to. Sorry, between October to December. Now, last year was an exception. I'll take that. But again, the majority of the time, probability wise, seasonally, it's strong between October through December. Therefore, as long as what I just said holds, if we hold above the October lows and take out 10,000 the next couple of weeks, then yes, I could see 20,000 on Bitcoin by January this year.

In a number of your recent videos, Alessio, you mentioned how you think that there's going to be a recession coming in the next 10 to 12 months or so. What do you think about that assessment, Charlie? And what do you think a recession's effect will have on bitcoin?

Okay, there's been a slight global slowing, a slowing of the global economy. And there are a number of factors at play. Brexit being one, trade wars, disputes between the US Or Donald Trump and the rest of the world. And so these are factors that we don't know 100% how they're going to play out. Now, literally in the last 24 hours, the Trump administration have been claiming that, and China are both saying that they think they've got a deal and they're going to reduce the tariffs and not impose tariffs. So that could be a really positive. And we've seen the stock markets doing really well on the back of that. And it's the same with Brexit now and looking more like we're going to get a deal.

So.

If those events are going to play out that way, then I don't know if we will be seeing a recession. We might still see a continuing cooling of the global economy, but not overly seeing a recession. Not within the next 12 months. Obviously there are always going to be recessions coming at some point or other, but I'm not overly seeing that just yet. But certainly there are. There are warning signs within the global economy. The consumer certainly looks a bit stretched in certain economies. But moving on, let's assume that we do start a recession in the next 12 months. How would I feel that would affect bitcoin? I think bitcoin would probably benefit from that, a bit like gold would do. And we've actually seen some correlations this year. Not 100% by any means, but correlations between the price of gold and Bitcoin, whereby even this year when we've seen some nice little rallies in gold, Bitcoin's been benefiting as well. Alongside that trade war talk, when there's been fears out there in the economy in relation to trade wars, then bitcoin has benefited at that time like gold has. So I think if we did go into recession, I think bitcoin would probably benefit.

What's your position on the recession, Alessio? Do you still think it's going to happen or have you changed your stance at all?

No, I'm actually very confident. I understand the caution that Charlie is making here and I totally understand where he's coming from. However, I'm actually more confident that we're heading towards a recession. I agree probably not in the next 12 months, but I think in the next 18 months. My own actual preferred target year is 2021. A lot of people are saying is next year 2020. I'm actually leaning towards 2021, but who knows? But bottom line is 12 to 18 months is the kind of timeframe I'm looking for for the next recession. Number of reasons. Number one, the yield curve inversion. A lot of people saying, oh, because the yield curve has now gone above zero, it's not inverted anymore, it's actually gone above. It's positive now. Oh, everything's okay now.

Wrong.

It's actually when the yield curve goes negative and stays below negative for at least 50 days, which has happened so far, and then goes above the zero level. That's when the risk of a recession becomes more imminent. In fact, there was an interesting video on CNBC recently by the creator of the yield curve himself, the person who actually invented and researched this yield curve inversion. I forget his name. And he said, again, this is the words he used. The creator of the yield curve inversion, he said, it's code red right now for the economy. And now we're code red. We have an inversion, effectively for two quarters. It's really hard to ignore. He's basically much more bearish than I am. He said it's code red. Those were the words he used. And he said we're heading for a recession probably in the next 12 to 18 months. And there's not just the yield curve inversion, it's also the PMI ism. PMI has gone below 50 now with the yield curve inversion. The Fed cutting rates is itself after raising rates and the Fed cutting them. If you look historically, every time the Fed has cut rates after raising them, bad move. It's A bad move for the economy. It's essentially a significant sign of weakness in the economy. Maybe the China thing will save the economy and the market for a while, but I doubt for too long. I think there are deeper factors involved in China. China itself is heavily in debt. We still don't know what's going to happen with the Brexit and the European zone. We've got the UK election coming up in about a month's time. Who knows what's going to happen in the UK election? There's a whole bunch of uncertainties which could easily lead us into some kind of a global uncertainty by 2021. And you know, there is a possibility there's something we don't even know about yet. If we go back to 2007, 2006, there are things happening behind the scenes. Nobody had a clue yet. Only professionals like the people in the big shorts, they knew what was on, going, happening again. That's why me and people like you and I, Charlie, that's why we look at the charts. The charts will tell you everything.

One thing. Can I just add one thing to what Alessio said there, though? There's this one thing called the presidential election, which is happening next year. And the U.S. administration will do everything in their might to stop the US economy from being in recession this time next year when we have the election. The incumbent president is always going to want to be able to present the economy and show that the economy is doing well, even if it's stretched. But he's not going to want there to be a recession by this time of next year when they go to the polls. So I suspect, like Alessio said, the Federal Reserve will continue to pump liquidity into the economy to try and keep it going, as they will do. And the treasury have tools at their disposal as well. So I do think that post the election, anything can happen. But I think between now and then, maybe some softening. But I don't think that the US it will happen for that reason. And traditionally it doesn't. It does not. You don't normally see big recession going into an election year.

All I want to say about that is Charlie and I most of the time agree on everything. And I understand where you're coming from, Charlie, on this point, probably we disagree. My perspective is that because I know where you're coming from, you're saying that the Fed reacts to the. In other words, don't fight the Fed. The Fed will do something to stave up the market. I actually think it's the other Way around. I think that the Fed reacts to the market, not market reacting to the Fed. I think that it's the carts before the horse kind of situation. I personally think that the Fed will probably try and try and save the market, but it's not going to succeed. Guys, if you don't believe me, just go back to the year 2008. The Fed tried to do its best to hold the market. It failed several times. It tried to intervene, it failed. Markets kept dropping in 2008 over and over again and happened in previous times, even in the previous recessions. Again, it's the Fed reacting to the market. The market drives what the Fed's decisions are. And that's where we might disagree. And again, if people don't agree with this, just go back to Alan Greenspan, who himself was the chairman of the Federal Reserve. He himself also made this point. The Fed has to respond to the market and the market drives the Fed's decision. So that's the only point probably where I might disagree with.

I agree, but I'm not talking about the market, we're talking about recession. There's two different things. Stock market. Normally the stock market will have already gone into bear market long before the economy goes into a recession. So we're talking about different things here. So I'm talking about a recession and a recession is lagging. The economic indicators are lagging behind the market. So I still don't see there being a recession by the election day of next year.

Yeah, that's a good point. You're absolutely right. Market is a leading market. Economy lags behind the stock market and the stock market will tell us. I agree with you on that.

Yeah, so you mentioned a number of times how you rely a lot on charts for making your decisions. Are there any other factors you consider when you're trading? Do you trade the news or are there any other things that you look at?

I'll actually go first.

Well, in the short term, yeah, if you're day trading, then news is important because there's an economic. I could have been trading the US Dollar against the Canadian dollar today on a day trading basis if I hadn't have been aware that there was employment figures coming out of Canada today that could affect my day trading position. So in the very short term, news events are very important. But if you're swing trading or positional trading, I think they're less important. And so it's still worthwhile knowing certain economic fundamentals. But also the charts like Alessio's alluded to, the charts will Tell you a lot. The charts factor in people's views on the world economy, on how a market's doing. All of that information that people are utilizing is there in the chart. So I'm more of a chartist and a sentiment chartist as well. So like I alluded to earlier, I like to pick up on extremes in sentiment. And if I pick up on an extreme, whether it be by the public at large when we had this with bitcoin two years ago, or even within the trading community, you can pick up sentiment clues and sometimes even within the trading community, markets flying up and you can get a good gauge that actually there's too much froth there. And unusually, I have measures of seeing what the general traders are up to. And a great thing to do is to do the opposite of what they're up to. So if 80% of people are long on a particular market, then I'll start looking for reasons to sell.

Do you view charts the same way, Alessio?

Yeah, actually, believe it or not, there's a famous phrase by Bernard Baruch, famous chart analyst and trader, who said that I believe his quote was, show me the charts and I'll tell you the news, which is, I think, really, really good point. And I agree with Charlie, actually. As a matter of fact, I know this is kind of boasting, being a bit braggadocious, but Charlie and I were absolutely correct about a few months ago, you remember, Charlie, back in August, me and you did a kind of an interview and you and I got it correctly that we need to wait for bitcoin to come back to us. As a matter of fact, this is one of the key, important lessons, key important points that Charlie and I both agree on, which is we never chase the market, let the price come back to us. And eventually people were not listening to any of us. By the way, back in August or back in July, if you said bitcoin is going to come back to 8,000, people were laughing. Honestly, people were completely ridiculing anyone who said that bitcoin is going to come back from 12 to 13, back to 8,000. That's, oh, forget it, it's not going to happen. But me and Charlie were absolutely correct. We were both right on this. Good job.

I don't read the comments then.

Yeah, you don't want to read the comments, Charlie. Well, I'll read them so you don't have to. But bottom line is I agree with Charlie on this point. And one, there's a very great passage in this book by Michael Kovel. This book which I'm holding, I know you guys can see it, but it's called Turtle Traitor by Michael Covell. And in this book he makes a good point that professional traders, like the turtles back in the 80s and even still today, even now, they look at technicals, not so much the fundamentals, they look at technicals, the key levels on the charts. So basically what I'm saying is that often before the news announcements, like the FOMC market prices pull back to some key average or trend line or some key level and then they continue to move in the direction of the trend. So again, we follow the technicals.

Technical analysis is really interesting, especially in the crypto trading community, because on Twitter you see a lot of these like technical analysis traders posting about their price predictions and their charts and everything like this. And it feels to me like this is more prevalent in the crypto space than many other spaces. What role do you guys think that this sort of technical analysis plays within the crypto trader community?

As far as I'm concerned, the Twitter space, the Instagram space, 90 odd percent of the people who are posting on there don't know how to trade anyway. So they're after the fact traders, they'll manipulate their screenshots off their mobile phones, they'll do all these sorts of things to show these wonderful, amazing trades they've done. I think the best advice, like Alessia has just given some good advice there. Best advice I can give to anyone is yes, use, use technical analysis, because I use Alessio. Lots of traders use technical analysis, but you need to work on your mindset as well. You can have a view that Bitcoin might go to. Alessio's talked about 30,000, let's pick 30,000 earlier on. So let's say you've got a view, you've done a technical analysis, a huge amount of analysis to come up with that view. But if you haven't worked on your mindset, there's no way you'll be able to hold your position all the way to 30,000 because then when it goes up to 20,000 again, let's say it does double tops, then pulls back down to 12,000, will you be able to hold your nerve or will you just jump out? So all of that comes to having the right mindset and lots of people can do analysis out there in the markets. Not many people can actually trade and stay with their conviction. And that's where developing a trader mind really comes in. When one thing knowing the fundamentals, one thing knowing some technical analysis. But if you put your money on the line and then you can't ride it, then what good is that?

Awesome. Thank you guys so much for coming on the show. I loved our discussion today, and it was a pleasure talking to you guys.

Thanks, Jackson.

Thanks very much. I appreciate it.

That was Alessio Ristani and Charlie Burton joining me today to discuss the crypto market. Thank you, everyone, for watching. And always remember to, like, subscribe, share and HODL cointelegraph.

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