Bitcoin to break all-time high soon – What happens next? | Interview with Alessio Rastani

Hi everyone. I'm Giovanni. Welcome back to another Cointelegraph interview. Today I'm joined by professional trader Alessio Rastani. Okay, Alessio, so let's get started with some charts, the Bitcoin chart. What is your point of view on the current situation in the Bitcoin market?

Hi, Giovanni. Thanks for having me again on your program on Cointelegraph. Great to be here. So, about Bitcoin, the way I approach it is, as I'm sure many people are aware of, I approach it through the Elliott Wave model, or Elliott Wave Theory. The reason, first of all, what is Elliott Wave Theory? Elliott Wave theory simply says, as this standard chart shows the standard model, that when price is trending, that price essentially moves in the direction the major trend in five waves. So in other words, price moves in the direction of the trend in five waves. But if it goes against the trend, it moves in three waves. So in other words, countertrend moves are usually composed of three waves, but in the direction the major trend is, five waves. Now, that essentially is what Elliott Wave theory is. And you can see from the chart a bunch of numbers. By the way, each wave is subdivided into smaller waves as well. Now, the reason why we apply Elliott Wave theory and the reason why it's useful is because it's the only method out there. It's the only chart analysis, the only way of analyzing charts out there that gives you context. It gives you an idea where you are in the big picture. Nothing else will give you that. So in other words, if you want to know, where are you in the big picture, Are we at the beginning of a major trend? Are we at the end of a major trend? Are we in the middle of that trend? Or are we in. Are we about to start a correction? All of those questions can be answered for you to some degree of probability by Elliott Wave theory. I'll give an example. For example, Giovanni, if you. If you know that you're about to start a wave one and two, a wave one, then it tells you that you're potentially the beginning of a major trend if you know you're about to start the wave 3. Wave 3 is usually. Wave 3 is usually the biggest, I would say this usually the strongest and most dynamic part of a trend. So knowing that you're at the start of a wave 3 is very important because that could prepare you for a big wave, a big move up in an uptrend, for example. And if, for example, if you think you're at the end of a wave 5, then you should Be getting ready for a major correction. So have a look at this chart that I've actually given you here. This is a Bitcoin 5 wave or Bitcoin Elliott wave chart. What I've done here on this chart is to the best of my, well, best of my knowledge here, I've pointed out from 2011, from the beginning, from the very start of the trend in bitcoin, the uptrend here with the bull market in bitcoin. I've outlined the five waves here for bitcoin going all the way back to 2011 to the present. Okay, now notice that that first major bull market, the first major move from 2011, 2012 all the way to 2013, that was a five wave move which completed back in 2013. And then we had a bear market, as I'm sure you remember, Giovanni, anyone who watches this video right now will remember the bear market of 2013, 14, and then to the start of 15, 2015, that was an ABC corrective wave, as you can see there. Then from 2015, from January 2015, we started a major bull market. This is the one that took bitcoin from about 100 bucks, 100, 130 all the way to nearly a $20,000 mark, but just under 20,000. That was also a five wave move. That was a wave three, by the way. Wave three ended in 2017, in the famous peak of 2017. And then we had a bear market correction, an ABC wave four correction, as you can see there in the wave four ended in at the end of 2018. And then from end of 2018, from start of 2019, we started a five wave move. In the bigger wave five, by the way, the large wave counts are shown to you in red, the smaller wave counts are shown to you in white, and the magenta counts are the ABC waves. But it's the larger wave counts in red that I'm looking at at the moment the larger red wave counts. I think basically we're starting this next major wave five. I think we're at the beginning of a wave five. And if I had to narrow it down, I would say we were potentially the beginning of a wave 3 of a wave 5. Many people thought that the crash of April to June was a bear market. I'm sure you heard this. Many people were saying that there was a bear market a few months ago back in from April, the crash from April to June. But I disagreed. We said, no, it's not a bear market because we haven't broken market structure. Market structure was a 30,000, 29,000 levels. We never broke it because I said it was a wave 4. Correction. This is how Elliott Wave theory helps you, because people who said we're in a bear market, we're forgetting that actually there was a high probability we were just completing a wave four of this major wave five, not an actual bear market. By the way, when this five wave move completes, then I'm expecting a bear market.

Okay, that's interesting. So a bullish view overall regarding all time highs. Do you think that we are going to break through the all time highs by the end of the year according to this model that you just showed?

It's a very good question, Giovanni. Yes, I do think so. I think that as far as the all time highs of Bitcoin which were formed back in April, just near 64,000 I think it was. So as long as bitcoin remains above the September lows, which I think were about 40k, approximately 40, 41k. So as long as Bitcoin remains above that September low, the odds are higher that Bitcoin could make all time highs likely by the end of this year. And here's another reason. Seasonality is what's called a Halloween effect. My research shows that the period between the end of October, October 31st to the end of December is a bullish period, not just for the stock market, but also for bitcoin. So now of course seasonality is not a guarantee. People often think that seasonality is like a sure thing, that definitely we're going to go higher or it's definitely. It's bullish. No, it's a probability. I would say the probability is higher than 50%. So it's a very good probability. But all the studies show that as long as Bitcoin remains above the 200 moving average, daily 200 moving average, the odds are higher for Bitcoin to move potentially higher, making all time highs between October 31, Halloween and the end of the year.

Okay, that was pretty clear. So now let's switch to Ethereum. So a lot of eyes are pointing to Ethereum this year because it has been outperforming Bitcoin for most of the year. What is your view on Ethereum currently?

I'll make my analysis on Ethereum very quick because my main focus is usually on Bitcoin. But essentially I think that Ethereum also is going to benefit. I think Ethereum. One of the things that's interesting is Ethereum has not yet confirmed as I'm making this, as we're making this video, I mean it could change by the time people are watching this, but at the time we're making this video, Ethereum has not yet confirmed the breakout above the September highs, although maybe that will. That will change soon. But Bitcoin has made. Bitcoin has taken out a September highs. Ethereum hasn't done that just yet at the moment anyway. I think once Ethereum confirms that, once Ethereum takes out the September highs, that also would be a very bullish factor. So I always like to combine Bitcoin and Ethereum together to get a better probability. Put it this way, if Bitcoin is going to go to 100,000, which I think is likely by next year, then I think the probabilities are that Ethereum is likely to go. My targets for Ethereum would also be for next year or maybe perhaps by the end of this year would be 6280. Again, these are my targets. More likely to be next year, but 2022, but let's say 6280, 7800 and then 12,250. Some people may think these targets are rather conservative, rather tame, but I'm going to keep it modest and conservative. So that's 6,280, 7,800 and 12,250 potentially by the end of next year for Ethereum. And if Ethereum were to drop below the September lows, we. Which I think carries a lower probability. But if that were to happen, then I would have to change my mind about those targets potentially because that would change the structure of the charts. But those are my targets as long as Ethereum remains above the September lows.

There are news coming out lately that a Bitcoin ETF might be approved soon. There are several of them that are being considered by the SEC currently. So what is your view on this issue? There are some analysts that say that this is going to be not a game changer since there are already a lot of access to Bitcoin investments for institutions as well. So it's not going to be a game changer, as some people tend to believe. What is your view on this ETF approval? What kind of effect might have on Bitcoin?

I think it's going to be bad news for Bitcoin. Put it this way, let me explain why. So whenever Wall street or whenever the institutions bring out an ETF on anything, that's a warning sign. It's a big warning sign to get ready for something terrible, get ready for something dangerous. Now don't get me wrong here. I'm not saying as soon as The ETF comes out that bitcoin is going to crash or I'm going to get out. That's not what I'm saying. I just hope the ETF won't come out before Bitcoin hits 100, 100K. I'm hoping it's going to come out after Bitcoin hits 100k. Because in the past, whenever an ETF has come out on most things, on almost anything, you see usually a top forms, usually a major top forms in that market and we see a bear market or crash occur in that market. I could name a few things in 2000 and I don't know when it was, but in 2008, 2009, after the major Wall street crash of 2008, the major recession, what happened was this. Wall street came out with an ETF for volatility for the vix. I think it was. I forget the year. Exactly. I think it was late 2008, beginning of 2009. But that was exactly when essentially when the stock market bottomed and it went up. What I'm trying to say is Wall street saw a lot of people were putting their money into volatility index markets. So they thought, okay, here's what we're going to do. We're going to make an ETF for people who want volatility. What happened? That was about the time when the stock market bottomed and when volatility topped. So in other words, it was about the time when the markets reversed direction, in other words. Actually, there's a lot of research on this that whenever an ETF is brought out on something or a futures contract on something, usually it's a warning sign of an extreme reaching in a specific market at a turning point, an inflection point. I'll give you another example, Giovanni. I think it was late 2017 when Wall street brought out the futures for bitcoin. Bitcoin futures, I think that was late 2017, probably December 2017, but that was about the time when bitcoin topped, when there was a temporary top at the 19,000, 20,000 level and then it crashed. So my point is anytime Wall street brings out something, whether it's a futures contract or something, or ETF or something, it's a huge warning. It means be careful and get ready for something. Get a potential inflection point, turning point might be approaching.

All right, that's an interesting perspective. Quite, I would say counterintuitive. But let's see how it goes. Let's then wrap up the discussion with my last question, which is related to one of your predictions. So you predicted that a bear market for the stock market may be coming soon. So what time frame are we looking at? Why do you think that the bear market is coming and what kind of effects that is going to have on bitcoin?

Let me say that I'm not expecting a bear market this year. I've made that very clear even last year. I'm not expecting a bear market this year. I think a bear market in bitcoin and the stock market is likely coming potentially towards maybe in the next couple of years. So according to Jason Geppert of Sentiment Trader, he says that there's a rising probability of bear market and deteriorating macro conditions. And he says that whenever the spread between bear market probability and macro index models increases over 20% as shown here by this chart, then there is a very high probability of a bear market. In fact, we've seen before when this happens, 2007, bear market occurred afterwards 2000, then we had a dot com crash, the dot com bubble burst in 1990s, the famous 1990s recession, 1980, 1973, 1969. Every time when this model shows a Signal Going over 20%, this shows a rising probability of a bear market. And again, I have to give thanks to Jason for that research. But the bottom line is I think that from a technical perspective and from an economic perspective and even a fundamentals perspective, everything is looking likely. That again, not this year, not 2021, but potentially next couple of years, we could very well see a major top in not just the stock markets, but also bitcoin as well. Because as we've seen in the past, usually when the stock market crashes and goes into a bear market, it has a negative impact also on bitcoin. When the stock market crashes, Bitcoin may also crash and drop as well is because both are risk on markets. Stock markets and bitcoin are risk on markets. When there's an appetite for risk, both markets go up. But when there's low appetite, when there's little appetite for risk, they go down. So when investors and traders, when they fear risk increasing and they potentially fear losing money on markets dropping, then they typically sell both stocks and bitcoin. In fact, there's a theory that perhaps bitcoin gets sold to cover their losses. When traders lose money in stock markets, they may sell their bitcoin wallets, empty it out to upset their losses in other markets. So yeah, I don't think it's going to be a good news for bitcoin when that bear market comes.

Yeah, Actually, we saw that exact scenario happening last year when there was the coronavirus outbreak. We saw the stock market crashing and bitcoin crashing.

Giovanni, you're absolutely right. Giovanni, you're right. Yeah, absolutely.

All right. Thanks a lot, Alessio, for coming on our show. That was super cool to talk to you.

Thanks very much, Giovanni. And again, thanks for having me. I really appreciate it.