Is The Fed Suppressing Bitcoin? | Alessio Rastani Vs. Zak Mir

I think a recession will be a disaster for bitcoin.

An alternative to money is what? Bitcoin can never be below 5,000.

I think we can kiss this bull market goodbye.

The futures market is there to just to make sure that bitcoin fails.

Hey, guys. The sponsor of this video is cryptocurrency exchange HitBTC. Launched in 2013, HitBTC is one of the first crypto exchanges in the world.

Today.

It offers over 800 trading pairs, some of the lowest trading fees, and is ranked first for liquidity in the market. Hit HitBTC was built to meet the needs of the most demanding and sophisticated traders. So watch this video and go check it out. The link is in the description below.

What's up, everyone? My name is Jackson and welcome to another Cointelegraph crypto duel. I'm pleased to welcome back Alessio Ristani. You may remember him from our earlier video.

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

We will also be joined by Zach Meer, who runs the trading blog Zack's Traders Cafe.

It moves 24 hours a day, seven days a week. It really is a trader's paradise.

How's it going, guys?

Hi, Jackson. Thanks for having me on. Thanks for having me and Zach on. I appreciate it.

Thank you very much. I thought Cointelegraph was British, but obviously it's got sort of transatlantic feel to it as well. So there we are.

We're all over the world.

Exactly. Yes, exactly.

All right, so let's just hop straight into the first question. So could you guys give me some ideas about what your bullish and bearish targets are heading into the new year?

I guess, Zach, if it's okay, I'll start and then I'll pass it on to the master. I don't expect bitcoin to be above 10,000. I don't think it's going to be above 9,000 either. And I don't think it's going to be below 6,000 either. So I think we're stuck in the range for the moment between, I would say between supports at 6,500 to 6,000 and resistance at 9,000 to 8,800. I think it's that kind of range that I'm expecting. We're potentially going to be between now and the end of the year.

That's pretty interesting because the last time that you were on with us, I think you said that in the first couple months of 2020, we could see Bitcoin hit 20K.

I think there's a very high probability. By December or January, we could see 20,000, at least 15 to 20,000 range.

Do you still think that's possible?

And what I said was that if bitcoin can get above 10,000 and stay above its October lows of 7,300, it's quite likely we'll get to 14,000. And then if we can take out 14,000, then yes, very likely we'll get to 20,000. We have to stay above the weekly 21 moving average. The moment Bitcoin fell below its weekly 21 moving average, 9,000, the probabilities, the odds of a move above 10, 10,000 or even above 12, 14,000 diminished significantly.

So how do those targets line up with your target, Zach?

I think Alessia is probably micromanaging the whole thing a bit too much. I think we've got the. Let's say for bitcoin, we've got the backdrop of the late 17 peak at 20,000, then the next peaks were, let's say, 12, 13,000, so 2/3 of that, we're now struggling basically at half of the last peak, say 7,500. It's looking like the law of diminishing returns rather than anything else. I don't think there's any great excitement for the end of this year or next year. The best you can probably hope for is a range. I agree with the 6,000 range, but that's because everyone in town is looking at 6,000 as a. That was resistance became support. But there's nothing to stop this market gradually breaking 6, 5, 4, 3, whatever it is. It's a post bubble situation.

So would you say you're overall bearish right now?

I think I'm bearish largely because the bullish inputs into this market, which was China and which was Libra, have made practically no difference at all. And Libra should have been the great breakthrough. China. Saying that we like blockchain and we like this and we like that should have been great. It wasn't. And so therefore I've got to be bearish with the news that we have at the moment.

The difference between me and Zach is that Zach looks at the fundamentals, which is fine, I respect that, but I'm not really that keen on the fundamentals. I'm more of a technicals guy. And I would say that it's interesting what Zach says. I do have a chart which I'll show you in due course as to my overall perspective on bitcoin, which I'm sure we'll come to. But I would say that 5,000 on Bitcoin is a key level for me. And I think if we break 5,000, that's essentially the line in the sand for me between bullish and bearish. Because below 5,000, I think we can kiss this bull market goodbye.

All right, great. So let's move on to the next question. Alessio, in our last debate, you talked a little bit about the wild card theory. Are we still following that plan?

Just to be clear, let me just define what the wildcard scenario was. Just let you know I drew this chart back in September. Okay? So that's why it looks a bit weird. The reason is I drew this back in September just to show you in context what I was expecting. I was expecting one of two scenarios. Either a pullback just at 7,000, 8,000 range, which is the green scenario, or a much more deeper pullback that you can see right there in the red. The red is the sort of a deeper scenario. If wave one is completed here, let's say wave one is completed back at near 14,000, then we're going to see a pullback. In other words, a wave 2 correction, a wave 2 retracement down to the 7,000 to 6,000, maybe even to the 5,800 range. As you can see there, then the C wave of the wave two could potentially complete there. And then once the C wave of wave 2 completes, we'll start the next wave, the major wave 3, to the upside, towards 20,000, essentially, and further higher towards 30,000, 40,000, which is going to take years to complete. That is the wild card scenario. My other expectation, my, shall we say, the alternative, or shall we say second lower probability expectation? Is this the bear scenario? I would say this is a lower probability at the moment, which is that bitcoin could go all the way down to 2,000 or 3,000. The reason I say this is a lower probability is because we haven't broken 5,000. It's only if Bitcoin falls below 5,000 that I would change my mind. If you still believe the drop from the highs we made in the summer to now is still a correction, not a bearish downtrend towards 2000 or 3000, if that's your belief, then essentially that is the wildcard scenario we're dealing with. That is what I've been saying. That is still my primary expectation. I give this a 60% to 55% probability, which means the bearish scenario, the bearish scenario to 2000 or 3000 for me, has a lower probability, a slightly lower probability. That's a 45%. That is basically my point.

How do you feel about this theory, Zach?

Well, the theory sounds very complex to me. I think the simple charting, I do a weekly update and the simple charting thing at the moment is that got a line of resistance from June, which was the peak of this year, that's currently running through 9,500 on Bitcoin. That's also where the 200 day moving average is. I would just say up to that level you're selling into strength or you're standing aside if you're a bull and basically you're waiting for that 9,500 10,000 area to break. I think that if there is going to be the big mega bull run at the moment, it would start at 9,500 at the 200 day moving average and break through. And you might wait for ten thousand or ten and a half or even wait. Even if you're late on that, once it gets through that this time it should keep going and then you'll finally get that move to 20,000 and beyond.

If we're going to see the next continuation, the next leg of this rally towards 20,000 and 30,000. If we're going to see that potentially in 2020, what we need to see is a period of low volatility. Right now we don't have low volatility. All we've had is at least a few months of very high volatility. One massive move up, one massive move down. We need this market to stabilize. Once we get that low volatility, then we can know what bitcoin is going to decide next. And that might actually be the next leg for its potential leg higher towards 20,000, 30,000. I don't see any reason why bitcoin cannot get to 30 and 50,000 in the next few years.

I just got to jump in on that. The. I had the view that when the futures market was introduced for bitcoin at the end of 2017, that would or could have killed the market because in my view the gold futures have killed a possible rally in gold. Gold is manipulated by big players on the futures market. And bitcoin has never been the same since the futures market came, came through there. And basically that's how this market is controlled. So you have all that, you know, you have the bullishness that you know, people have. People love it and everything else and so do I. But the futures market is there to just to make sure that bitcoin fails. Obviously the central banks are there, the irs, hmrc, all the other places, all the propaganda in the media, all of that is there to kill bitcoin. Anytime it gets, has a good rally, all that negative cut, all the force comes in there at seven and a half thousand, nobody's too bothered. The authorities keep quiet. But it goes back to 10 plus they start getting excited. If it went to 20 again, they'd be saying, you know, you've got a hand in your bitcoin, you'll be taxed, you'll be, we know, we know where you live. It's going to be all that sort of stuff coming back again. It is a renegade product and it has, it has, you know, the power of the establishment against it. And that is something that you have to remember whether you're a fan of bitcoin or not.

I totally understand what Zach is saying. I sympathize with Zach's view because he is right. Since the bitcoin futures came out, that is essentially was near the top in December of 2017. Yeah, I do sympathize with it. But all I would say is we should keep an open mind and I'm sure Zach would agree with that. I'm a technicals guy. Again, I'm not a fundamentals person, so I'm going to follow the charts. If I see bitcoin getting above resistance, if I see it getting above 10,000 and then getting above 12,000, I don't see why it cannot go into the next wave 3 rally towards 20 and then 30,000. So I do understand the substance of Zach's view, which I do sympathize with. But nonetheless, I'll go with the charts.

I'm still interested in this opinion. Zach, do you think the institutions are the only thing that's keeping bitcoin down or are there other factors that you're also concerned?

There are plenty of traditional or smart investors, the professional investors, people maybe ex big city institutions and stuff like that who look at bitcoin and they say this is nothing. This is not even hot air. Even hot air has more value than bitcoin. And you've got to see that they've got a point. For them, all of this is a scam. It's a Ponzi scheme type situation. It's money laundering. It's everything which is bad in the world probably makes you go bald as well. I mean just everything that you know, everything which is bad in the world comes from the crypto area. Drugs and criminality and everything else. And so for them, you know, it's just, you see an asset which is priced at 7,000 or $8,000. Well, you're just. You're just shorting it. Every time it goes up, you hit, you lob it down. It's just like over the net, smash it back, you know, I think we've got to be mindful of that. But the credibility of bitcoin is, I think, very weak. The credibility of blockchain is stronger. But even blockchain hasn't really. Even though it's a great technology, it hasn't really been able to establish itself. The risk, I think, is more within itself. As much is as much within itself as it is with, you know, central banks not wanting an alternative to money. I mean, an alternative to money is what bitcoin can never be. It can never be allowed to be that. I don't think people have. That hasn't sunk in. You can't have an alternative to the dollar or to the pound. It cannot be allowed to happen. So it's difficult enough having an alternative to a petrol car in an electric vehicle. That was controversial enough and that's taken 30 years. But I think if there's any message that I would give, just remember fiat currencies are backed by the rule of law, they're backed by government, they're backed by every single Illuminati you can think of. And so to call up bitcoin a lot is a punchy call. And I think it's done very well.

Just to push back there on what Zach said there, and I know you don't want to stay too much on the subject, but just to push back on Zach there, I don't believe that all cryptocurrencies and altcoins are going to survive. I think a lot of them are going to get destroyed and certainly we're going to see a lot of them get wiped out. But there's going to be a few of them will survive. And I think one of them, the key candidate, is probably bitcoin. I think it's a generational thing, it's a technology thing. As technology progresses, as the market, as people decide what they want to choose to spend with, like bitcoin, let's say, let's say in five years time or 10 years time, more and more people, especially the new generation, started to go towards bitcoin as the main form of currency, as the main form of transferring money, or just as a main form of currency exchange, I think you're going to see banks following suit, just like they did with Amazon. Amazon changed the way we shop. Twenty years ago, people would go to the shop to buy their stuff. Now all the retailers are put out of business by Amazon today. We're still using the dollar, we're still using the pound. I'm talking about the majority. The majority of us are still using the dollar, euro, pound, the main currencies. But I think this is a generational thing. People eventually probably going to change their habits. Bitcoin could change people's habits. And instead of using dollar or pound or euro, they might start using Bitcoin. And that eventually is going to shape the way banks are going to behave as well. And they may start adopting. They may have no choice but to adopt Bitcoin as well. So that's just my way of pushing back there on what Zack said.

So political and financial power is all based around currency, fiat currency. If Bitcoin changed, Bitcoin became the currency. The Fed would have no power. Interest rates wouldn't be there, wouldn't be. There'd be no control. It's a different thing. It's not Sears versus Amazon. It is actually the US government versus the people. And you can't have the people winning. It's a bit like the Brexit debate. It's a bit like the UK can't even leave the eu. You can't go against the establishment. The establishment is too strong in terms of currency. Money is the seat of all power, the welfare state, all these other things. It can't happen. So it's more likely that, let's say the Fed might create its own digital dollar, that might happen, but it would do that in order to get rid of Bitcoin, not in order for it to exist. So I don't think it's not going to happen. Obviously. We'll see. We'll see. But as I said, I'm a fan.

Of the way I see it. Zach, I mean, Zach, I do understand where you're coming from. I understand what you're saying. What I think is that people's habits change. People's just like people's shopping habits changed. Instead of going to retailers, they're buying from Amazon. I don't see why they won't change their habits. And I think it's a matter of essentially the Fed, governments will have to eventually adapt. I think they will adapt to what people are using. I think may happen is they may try to find a way of controlling Bitcoin. I don't think there's some. I don't think they're going to find a way of getting rid of it or any. Anyway, that's what I think.

I was watching an interview with you of you earlier, Zach, and in it you said it was in 2018 and you said that for you bitcoin was going to become the new gold.

It's become for me the new gold. And I don't think that's going to change as far as investors are to going concerned.

But it seems like you've kind of shifted your position, have you? And why?

I think you misunderstand what I'm saying. I love gold. I love bitcoin. I love anything which is an alternative in real estate. Anything which is an alternative to fiat currency. Because I think fiat currency is manipulated. And year by year the dollar in your pocket or the pound in your pocket goes down in value. So anything which is a store of value, that is gold or real estate is better than fiat currencies. I don't like the central bankers. I don't like the way things are done. I don't like the way that obviously the money is stored in banks and that's why the government and banks are so close to each other, because if you have the keys to the money, you have power. So we're talking slightly across purposes here. I want bitcoin to succeed, but I'm concerned that, that it can't succeed because of the link between a political power and the banking system and the financial system. I just don't see how you can have a rogue currency as opposed to a central bank currency. So that's what I meant.

So, Alessio, you've mentioned on your channel and in our last meeting together that you believe a recession is coming in the next, I think year and a half to two years. You say said so, Zach, do you agree with this assessment of the market? Do you think a recession is coming and what do you think the effect of a recession will be on bitcoin and the whole cryptocurrency market.

So if I may, if it's okay with Zach, I'll go first. I think a recession will be a disaster for bitcoin. Now I know some people watching this video are probably shaking their heads saying, no, a recession is a fantastic thing. But here's one thing I will say. We don't actually know how bitcoin reacts to a recession because in the last recession we had in 2008, Bitcoin did not even exist at the time. We didn't have Bitcoin in 2007, 2008. So we don't actually have a precedent, we don't have some kind of historical precedent for bitcoin to See how it behaves in a recession. So what I'm going to say is pure speculation, but I think it's probably accurate, more or less to say, look, look, what happened to gold, if there is some similarity between bitcoin and gold, is that they're both anti establishment assets, or currencies, if you want to call it that, they're both anti establishment. The same kind of people who went to gold, probably the same people who like bitcoin because they are an answer to fiat currency. So often people who don't like fiat currency, they go into gold or bitcoin. But look what happened to gold in the last recession. It dropped by 30%. Everyone thought that gold is going to go up massively higher in the last recession, but it dropped and lost one third of its value. I think the reason why gold went down in the last recession is probably the same reason why bitcoin will probably go down too. Because when a recession occurs, what happens? Bankruptcies occur. So people end up either losing their job, their wages fall, demand drops, companies go bankrupt, businesses go bankrupt. And again, this causes a perpetual deflationary cycle where essentially governments and individuals need to raise cash. They need cash to survive. Again, why? Because people have to pay their bills, they need to live somewhere if they're unemployed, if they lose their job because of the recession, they need money, they need somehow something to survive on. What might happen is that individuals start going into their wallets, their bitcoin wallets, their cryptocurrency wallets and emptying that out, converting that into fiat to survive, to live. That's what the main thing is for me. Looks like it could be a disaster for bitcoin if a recession occurs, but it might not be a disaster. It's only a disaster. It's only a bad thing if you see it from a short term perspective. Because here's the thing, if you're watching this video and you're thinking, alessio, you're wrong. It's going to be great for bitcoin. Let's say I'm right. Let's say that I'm right and bitcoin drops significantly. Let's say it falls at 2000, 1000. Is it a bad thing though? Who would not like to buy. Just answer this question. Who would not like to buy Bitcoin at $2,001,000? You'd have to be crazy to say no. You'd have to be crazy to say no. I don't want to buy Bitcoin at $1,000 or $2,000 crazy. So even if bitcoin gets cheaper in a recession, so what? Fantastic. It's a win win. Not only does bitcoin get cheaper, real estate prices get cheaper in a recession too. Stock prices get cheaper. So I think it's not a bad. I see it as a glass half full. For me it's a glass half full.

Well, the first thing is I don't remember saying that I agree with you on. Actually don't remember agreeing with you on anything really. But on the recession side, no. I think one of my bet noirs is the old style economic theory which I think ended at the last the Global Financial Crisis, 2008. That was the end of all the economic textbooks. You could throw them out the window because all the relationships, everything from there doesn't work anymore. Especially the inverted yield curve that is like a stop clock from now on with very low interest rates and the new environment we have with the qe, et cetera, a recession is much more difficult than before. Growth is more difficult and a recession is more difficult. Inverted yield curve doesn't predict anything at all because we're in a false. Bond markets are false, et cetera. Most of the markets we have zombie companies with loads of debt and we have false markets. And that way the stock market is also a false market. It's just being pumped up by Mr. Trump and his friends. So no recession. If there was a recession, I think all we would have actually we've got more chance of a depression than a recession. So I think if there was some calamity, somebody shoots Trump or whatever, it would actually be a 1930s style thing. But not a year or two of negative growth, minus 1%. I think it would be a complete car crash. But basically boom and bust is over in the new QE environment. And what else I was going to say on bitcoin, basically I think it would be if there was that kind of smash, if there was a depression, a bad situation, I think bitcoin would be stronger because the establishment would be weaker and it would be a renegade asset. And I think that would actually be positive, which is actually what it is. Bitcoin is good for developing world situations where you don't have access to a bank, you can pay somebody off the record via bitcoin and everything else. That's what bitcoin is good for. But as I said, I don't think there's going to be a recession. I think we're just pumping up the stock market, pumping up real estate, et cetera and we just keep going like that.

Excellent. Thank you guys so much for coming on the show today.

Thank you.

Thank you.

Thanks for having us.

Thank you, everyone, for watching. Thank you. My name is Jackson. That was Alessio Ristane and Zach Meer. And, guys, always remember to, like, subscribe and hodl cointelegraph.

Like, subscribe and hodl.