How Low Will Bitcoin Fall? | Eric Krown vs. Joe DiPasquale

Hi everyone, I'm Giovanni. And today with us, prominent trader and YouTuber Eric Crown and CEO at Bitbull Capital, Joe Di Pasquale, who will be discussing the latest crypto market updates. Hi guys, how are you doing?

Hey Joe, good to be back here. Good to meet you Joe. And pleasure to be back here man.

Great to talk with you guys.

Let's talk about the price first. So Bitcoin is currently hovering around the 8,000 benchmark. The and the outlook is not looking good according to most analysts. Joe, in a recent interview with Forbes you identified the key Support now at 7750 which if it breaks would potentially cause Bitcoin to go as low as 6,000. Do you still believe so?

I do. Giovanni, let me show you a quick analysis I did on TradingView. We see that about a week or so ago we saw that. Well two weeks ago we saw the price drop. Then what we see here is Bitcoin trying to break out of this descending triangle. The 7750 line you're talking about is this blue line here. We did see the price rise in the last day try to break out of this triangle. But instead of being able to really break this resistance line or have this resistance line become a support line and continue to grow, we're seeing the pressure kind of be too much for Bitcoin to break out of. So I do see, yes, if my prediction is that the price of Bitcoin will continue to fall down into this descending triangle and if it breaks 7,500, yes, I do believe that we're in trouble and it could go down to 6,000 to answer your question.

Great. And Eric, how do you see these predictions? Do you agree with this kind of analysis?

Yeah, I think my numbers would be a little bit different. I can share my screen right now, but mostly the same. Realistically speaking, to me the most important area for bitcoin is this blue moving average right here. That's the 377 exponential moving average which is very, very very very very important for long term trend identification. If we do break this, which is a little bit above where Joe was saying I've at about 7850 region, then I consider this as redistribution right here. And we're getting ready for the next markdown. I'm not sure if I would directly target like 6,000. If we broke that region. I do believe it'd be more appropriate to take it one step at a time. I do believe that we'd probably find a nice little bouncy bounce, something Somewhere in this pocket right here between about 6,900 to 7,100 region back down from our middle of May lows. In fact, what's really interesting to me is looking at a corollary of bitcoin in gbdc. We already do see GBDC kind of taking that next leg down. We saw the same consolidation right here at the, what would be the $8,000 level. And GBDC broke it to the downside already as of a couple days ago. And we actually have seen GBDC precipitate these moves on bitcoin plenty of times in the past over this last few years. So what does make me think or what does make me continue to be bearish here is not only just price action structure, but you know, GBDC showing the kind of way as well. As long as we're below this white moving average, that's a 270 moon average. I, you know, I'd be looking for continuation essentially and going back to bitcoin right here. You know, for, you know, for myself. The way that I think about it as a trader isn't necessarily that, you know, we're, we're 100% going down to this next level. It's, I need to see this level first broken at about, let's call it 7900, I'll say. And I would kind of maintain this as overall more bearish as long as we're below 8,700. That's where all these major moving averages kind of converge right here. That's a 200 simple, that's a 200 expense moon average and that's the yellow 20 minute expense moving average right here. Which price action had a pretty, pretty awful rejection from it over the weekend. Right. So to me that tells me that the bots and algos within this market are angled to be on the sell side of this equation.

Equation.

And if they are, what this kind of precipitates into is. Well, if we put on, if we take off everything but these two moving averages right here, this is going to be, we're going to be looking at a death cross between whether you're looking at exponentials or simples. Exponentials are the green 55 and the purple 200. Those are, those aren't a collision course as long as we're below about 8,700, putting more and more downwards pressure on price action. That probably happens in the next week and a half. If those, if those do cross and the simples will cross sooner than that, they'll probably cross in the next like week. I'd say assuming that we do stay below 8,700, so both these things would be pretty damning for long term price action. And that's when I do think bitcoin likely does break down. Does it hit that $6,000 level? I don't really see too many other things in $6,000 level. I think actually if it breaks below about 68, 6900, I think that will actually be headed significantly further down towards mid to low fives. But at, you know, at that point we're kind of splitting hair because we're realistically, you know, we're realistically looking a lot lower if that were to happen. So I think we're kind of on the same page for that. Absolutely.

So recently Bloomberg quoted Jeff Dorman, chief investment officer at arca, who said that with volumes still quite low, relatively to this summer, shorts are incentivized to keep pushing prices lower until they hit resistance. So do you agree with this analysis and where do you see a possible resistance?

So because bitcoin is in a general downtrend, we do see people, investors. The sentiment amongst the investors I speak to is more of a short sentiment, depending on the type of investor, of course. So that perpetuates the cycle lower and lower until people will not stop shorting until there's a bullish sign. Right. In an event which we could think of interest rates dropping more or more trade wars or other things that might be a catalyst. Although in the short term, I think things like Zuckerberg's testimony to Congress next week is a bearish sign. So what I would be wary of though, as an investor is a short squeeze. Because if bitcoin does, let's say, as both Eric and I predict, go down to 77.50 or 75, we're going to see a short squeeze. Perhaps people trying to cover their shorts buying bitcoin, the price shooting up, and perhaps people getting in trouble because they're not able to cover their shorts or get washed out of their shorts. But yes, I do continue to see this trend of shorting until there's bearish news. I mean, bullish news. And that could even be we see the halvening next year or something else like that. There's a number of reasons that bullish.

News could happen, Eric.

Yeah, so as far as levels that I'd be watching, assuming that we do break down here, because it's always probability until we actually do take out that 7850ish region, I'd be looking at first and foremost 6800-7000 region as a first potential area. Then I'd be looking at, actually let me pull up my screen right here. This is going to make a lot more sense with an example and then I'll be looking actually much lower after that. So the next levels to me also just gained off of the volume profile right here, showing a little bit of activity at the high 6,000 region. Then again, if we pull it out a little bit more back after that, realistically, fives and fours is kind of where I'm looking towards. Even then on a weekly, you know, on a weekly, the major moving average that I'd be looking at down around that region is the 200. The 200 expense moving average right here. That's gonna be protecting price action somewhere right around 5,400. But this, all, this all again comes into the conversation if those next levels get hit. So I always take it one step at a time. As a trader, I am not in any way, shape or form saying that Bitcoin's definitely going down to 5,000 or anything like that. I think, you know, if we take the next leg down, you know, 68, 6, 800 to 7,000, you treat it as a potential reversal when it happens. See if there's any sort of, you know, divergent sign, see if there's any sort of lost momentum. And then if the, if the bounce fails like we've seen, you know, for the last, you know, for the last couple months, then you can start targeting those next levels. So that's what I'd say about that. As far as the director of arca's statements, it's a little bit, I'm a little, I'm a little bit unsure of what he's, it's, it sounds like what he's saying. Shorts are going to continue to short until it's not profitable anymore. Which, yeah, I agree with. You know, I'd mostly agree with that.

Despite the pullback in price experienced by Bitcoin since last June, the Chicago Mercantile Exchange claims that institutional investors open interest in their bitcoin futures remains strong. And it's actually over 60% higher than a year ago. So Joe, what is the logic institutional investors are following? Are they accumulating on dips?

Well, I have kind of a multi pronged answer for you. So yes, you're exactly right. Do institutional investors want value? Do they accumulate on lows? Absolutely. So that's when we see their accumulations. But as Eric was saying, the volume has been low recently. So even amongst these lows into the 7Ks. Yes. The institutional investors I speak to are accumulating on these dips. That's absolutely happening, whether it's through GBTC or direct purchases of futures or Bitcoin itself. I still, from the institutions I speak to see a lot of interest in accumulating Bitcoin at low points still. I think we've seen the relatively soft launch of Bakkt and other products and there's still lower volume in this moment than I think would be a good sign otherwise.

And Eric, what do you think about it?

Right, so when he's saying that, it doesn't necessarily imply that those people are buying. Right? You know, when we're talking about trading going on, they could be also shorting, they could be also selling. You know that that still counts as a trade. That still counts in the volume metrics. So when he says something like that, it's, well, it, it's direction neutral. Doesn't really tell you too much about that, unfortunately. What I can say though is about bigger account. If I pull up this right here, this was a pretty interesting study done. I want to give credit to this was this is Glassnode on Twitter. I don't know him personally, but pretty damn cool that he put this out. And this is the amount of Bitcoin addresses holding more than 1,000 bitcoin in their wallet. So we can effectively say these, you know, the, these are whales in a sense. You know, this is more than. This is around like 10 million bucks or more. And the number of wallets has been drastically rising.

Right.

Which you would think is a good sign, actually. Which it is a long term, a good sign. But for the short term, price action, think about it. Big accounts are not going to be accumulating during an uptrend. They're going to be accumulating during the downtrend. That's when that they, they are essentially the people who put in the low. These institutions here, you know, deal with big amounts of money. And you'll notice that every time that this gets accumulated a lot more, every time that we see a massive dramatic rise in this, that precipitates pretty massive drops, actually, which is kind of the counterintuitive thing at the outset. But when you really start to think about it, of course whales are only going to be accumulating when price action is coming down. That's the whole idea. And they're going to be distributing when price action is going up. So you see during 2016 to 2018, right here, we actually lost a few of those bigger wallet addresses. So overall, this would suggest that, yes, bigger players are accumulating, but that doesn't necessarily mean that we just stop and reverse from this exact moment right here. I mean, I just want to point my attention back towards this first major splurge in late 2018, which I'm sure everyone probably remembers, was during October, November. A lot of people on YouTube talking about this. But just a few days later, bitcoin got halved. It went from 6,000 to 3,000 essentially. And it wasn't until we saw those walls start to go sideways again where we actually did put in a low. So I would say it's correct, but actually the implications of it are kind of backwards in a sense.

So according to a recent Bloomberg article, bitcoin is no longer seen as the driving force in the crypto market. The article reports data by alternative data provider Indexica, according to which the bitcoin drop due to the growing cryptocurrency ecosystem, such as emerging new cryptocurrencies and blockchain technologies. Do you agree with this analysis? And why would a growing crypto ecosystem cause bitcoin's price to drop? Shouldn't it be the opposite?

I guess I'll start. I completely disagree. Bitcoin's dominance this year has grown. It's 66% of the total crypto market cap. So I don't see any sign of bitcoin not being the dominant force in crypto. It's recognized by the CFTC and the SEC as a commodity. It's, there's ETF attempts. It's going to continue to be the dominant crypto asset. There's others, you know, so I disagree.

Eric.

I'd 100% disagree and 100% agree with, with Joe here. So I'll share my screen once again. Anyways, to say that the crypto ecosystem is growing would imply that the total market cap would also be expanding as well. Going up. What do we see here on the total market cap? Well, first, the presupposition is wrong. We're not growing right now. We're actually coming down. We're, you know, we're well, having a little bit of a downtrend anyways. If we actually look at the index for, for altcoins, which the exchange FTX has actually put together so nicely for us, we can directly look at altcoins and then kind of, you know, compare it to Bitcoin and see, see what pops up. So I'd ask that you go into this with a, with a clear mind and we'll just pull up the first one, this is the Altcoin perp index on a weekly straight down. Midcoin perp index on a weekly straight down. Shitcoin perp index on a weekly straight down. Now admittedly there's not enough price action history here, but compare all of these charts, which are pretty much the same with bitcoin's price action from the last few weeks and you can see that there's a stark contrast. So I don't believe that that's correct. I also believe that bitcoins, you know, the bitcoin is the ecosystem and if bitcoin does fail, I don't think that bodes well for any cryptocurrency really. Could things change in the future? Could we see the next major technology emerge? Perhaps, yes, but I don't think that we've seen it thus far. And bitcoin still kind of the king. And if bitcoin comes down here, I expect everything else in this market to come down as much or more.

I completely agree with Eric and Eric, you reminded me that just the macro sense that people in crypto have is the flight to safety is often if not to dollars, then to bitcoin. And so right now when Eric talks about shit coins and other, we've seen just such soft action on the alternative coins. Their price is just generally lowering and lowering and lowering. It was big news this week when Ethereum broke 170 which is such a low for it just holistically. So yeah, bitcoin is especially amongst the fund managers that I speak to and invest in. They are often going from the alternative coins to bitcoin. But then holding bitcoin, they're not shorted, they would, they're holding it.

In this moment, my general view on altcoins go something like this. I don't really care about altcoins to begin with, but you know, there's probably going to be some absolutely phenomenally successful altcoins. Do I know what they are? Nope. I don't really spend my time, you know, looking at them, but there are a few that stand out right now. I think link actually has been for like the last year and a half. Just I have no idea what this thing does, but just this chart completely stands out from anything else and there's a few other ones. But realistically what I'm looking for when looking at alts, when people ask me on a stream or something like that is I want to see a chart that's not in a two to three year, just straight downtrend. If it doesn't look like that, it's probably okay and it might stand the test of time.

Link is amongst some interesting projects that people like. It's blockchain interoperability, chainlink. And so people also like projects like let's say Polkadot or Cosmos, which ticker is Atom. And those, the ones that Eric, you're talking about are some of the darlings amongst those who do altcoins and believe that altcoins will rise again. So that's, I think, why we see chainlink rising or Atom has a lot of price movement. It's again in the last few months been relatively soft. It was at $5 at one point. Now it's under 3,250 let's say. But those blockchain interoperability projects are really some of the stronger altcoins as. And the other things I'd say that people are looking for in altcoins would be maybe some of the exchange tokens like bnb, Binance Coin and possibly you mentioned Litecoin or other chains with a lot really fast transaction speeds. So Stellar would be one of those.

So you probably heard that the launch of Ton Telegram's Cryptocurrency, which was scheduled for the end of October, will be delayed to April next year because consider not compliant with US regulations. So Telegram is ready to give back 77% of the money to investors who don't agree with the new deadline. So what does this delay mean for the investors and what impact is going to have on the launch?

You know, Giovanni, in your question, I sense some. Maybe this is bad news for investors. Honestly, I've been bearish on Telegram since early 2018 and quoted as such in many places, just warning people away from the project. It always was an order of magnitude larger than or much larger than anything we'd seen in crypto. It was the hypiest of hyped ICOs. If I were getting my money back and I had been an investor in Telegram, which I'm not, I would be very happy about it because I am not bullish on its prospects even when it launches. Take the win of getting your money back. I would say that's my view on Telegram.

I would agree. It's very noble of them to give back the money that they probably didn't have to anyways. Yeah, man, I'm right there with you. I think that this kind of sets a precedent for the general space. If you actually are on the radar of the sec. Most of these projects are probably not compliant with FINRA or the SEC or whoever they. Their jurisdiction falls Under. So I think, I think the SEC just kind of targeted telegram because they got so big, as Joe said. But you can. I would expect the same results for any other, you know, altcoin that's. Or, sorry, any other ICO that did a similar thing, you know, of the same magnitude. So it kind of tells me that the SEC is not really concerned about all these smaller projects. But if you do get pretty big, they're. They're certainly going to knock on the door, which I think is right. And I think that that's, you know, it's, it makes a lot of sense realistically.

But some people are saying that this delay could actually give an advantage to the investors that can negotiate. No, I mean, the point is, the idea is that because of the delay, investors can have more time to maybe negotiate a better deal with telegram regarding the price that they paid.

But yeah, if that's, that's their general goal, they will have a chance to do that. Absolutely. I would just argue that it's kind of irrelevant at the end of the day whether they get stopped again by the SEC or whether the project just completely flops on its face, as do most altcoin projects. I see it as a blessing in disguise for a lot of those people.

If you just look at. Sometimes we have to extrapolate from crypto into the real world. Even if technology can be considered a real world. Telegram raised billions of dollars on something that doesn't exist. This tan token does not exist.

1.7 billions.

Yes. So if you just extrapolate that to any other company that does exist. Let's just say Facebook, when it first raised a billion, it was a major company that had major traction. So maybe they can renegotiate. Well, we'll see what the future holds. But I don't think that there'd have to be a pretty low valuation for me to be interested, given that it's not actually a product or a thing yet.

So do you share the same opinion, the same kind of negative opinion of Facebook's Libra?

Well, I mean, Libra and Hunter are completely different because Libra is a stablecoin, first of all. That will be tied to the value of a basket of fiat currencies like the dollar or other major currencies. Its use is mainly for an in network transaction that Facebook and other companies will be championing. The other stakeholders will be accepting it. Unlike Ton, which is a blockchain project that's not a stablecoin. Facebook's Libra will, I think, have mass adoption. And yes, Ton could be used within Telegram to send money and things like we see with almost WeChat. But I think Libra is stable and much more, has much more promising industry connections and is doing things in a much different way.

Eric, do you agree?

Yeah, I'd agree with that. I mean, Libra is trying to go the legal route, they're trying to be the legitimate route, whereas Ton just kind of went forwards with it and said, well, we don't really know what the SEC is going to say, but we'll take your money anyways. So Libra is very interesting to me because I do think that Libra success actually does help Bitcoin.

I know a.

A lot of people are going to really hate that statement. But let me explain this last run that we saw the upside. A lot of it was kind of in line with just the optimism around Libra and around all these partners kind of signing on with. With Libra, of which of course a few just left, right? Some. Some big names as well, right, like Visa and PayPal and a few others. So to me that's actually, this is kind of like a pivotal moment for Libra in a sense because it has the opportunity to make itself anti fragile if it survives this. If it survives, you know, having these companies leave it and still goes forward and does what it do, does what it set out to do, or just, you know, just gains its legitimacy and actually operating. I'd say that that's actually a pretty damn strong signal for the whole space, just cryptocurrencies in general, because it takes out one more step from getting, you know, from Libra, which is kind of like a more mainstream, you know, mass adopted thing, I'd imagine, you know, with everyone using Facebook. And it allows that money to flow a little bit easier into cryptocurrency because I. But from what I understand, Libra actually would trade against Bitcoin at least a few exchanges were looking at listening from what I've heard.

So basically you see all those supporting companies leaving the project as a positive sign because the project itself will be acquiring some increasing degree of autonomy from all of them and it will become more.

It's not a positive thing in and of itself. It's a positive thing if Libra persists and actually can go ahead with what they want to do. If they become successful, that makes them antifragile and they're not dependent upon those companies, which I think a lot of people, myself included, would put those companies in pretty high regards. So it'd be very impressive to see Libra succeed in the face of that, which would in turn make me more convicted on the strength of the crypto ecosystem in whole. Because it's all going to be connected, essentially. And I'm sure most people here, like myself, know once money enters this space, typically it doesn't leave.

Here with us today was Eric Crown, prominent YouTuber and trader, and Jodi Pasquale, CEO at Bitbull Capital. Thanks a lot, guys for participating and see you next time.

Thank you for having us, Giovanni.

Yeah, absolutely, man. It's been a pleasure to speak with you, Giovanni, and an absolute pleasure speaking with you, Joe. This has been amazing, man. So thank you.

I agree, Eric. I'm looking forward to continue to talk.

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