Why Bitcoin's Current Rally Is More Than a Correction | Alessio Rastani & Yoann Turpin

Forget the economy, forget the economic reports, forget all that bad news.

Focus on the price, the inflation of the state balance sheets. Intrinsically means that there will be more upside for digital currencies in general.

I think we could make all time new highs maybe by the end of the year, if not this year. At the very least by 2021.

What's up YouTube? My name is Jackson. We've got another great show for you today. I have the pleasure of welcoming trader Alessio Rustani and co founder of Intermute Trading, Johan Terpin. How's it going today guys?

Good. Nice to talk to you again, Jackson.

And Johan, very good here as well. Good for. Yeah, thanks for inviting us for the chat.

Yeah, thanks for having us, I appreciate it.

Great. So Alessio, what's your take on Bitcoin's short term price action? What targets are you looking at right now?

It's a good question. My first impression after this rally was this is, this is corrective. What does that mean? Simply means that my first impression was that we might drop back down to test the March lows. That was my first kind of gut instinct. I think many people probably thought about the same thing the way I changed my mind. So here's where I changed my mind. I began to look at the stock market, what the market was doing. So let me show you this as well. So notice that there's a strong correlation without a doubt. I don't think, I don't think anybody would deny this. There's a strong correlation right now because between Bitcoin and S and P. So if I was to tell you what I think about Bitcoin I would have to tell you also what I think about the S and P, the stock market. I've been very bullish on the stock market for the last few weeks. I would say from actually from the end of March I've been bullish on the stock market. I actually think, and I still do believe this, that the stock market has likely bottomed. Now I may be wrong on that. We'll see. There is a. I made a video recently called the Kiss of Death which is a kind of a sell signal showing that we could drop back down to retest the March lows on the stock market. I don't think that's going to happen at the moment. I don't think it's likely. But if it does, great. But as you can see guys, on this chart, without a doubt S and P and Bitcoin are strongly correlated. You can see they peaked by the same level by the same point, they troughed by the same point as well. They've been kind of moving in the same in line direction upwards almost. The movements have been sort of in sync, more or less. So going back to the chart of bitcoin here guys, I gotta tell you, I still, at the moment I got bullish on bitcoin back towards the end of March roundabout here, I would say start of April, start of April we got bullish. And in mid April I got very bullish on bitcoin. In fact, I'll tell you exactly what made me bullish here. What made me very bullish is when this drop occurred, this drop here into the support zone and then it bounced off and closed above these key levels. So and I would say I remain bullish on bitcoin as long as we remain above this key support. About 6,600 by the way. At the moment I think we could probably test that 200 moving average here. Very likely we might even go back up and there's some gaps, there's some gaps in the CME chart we might fill. I think if I just show the CME chart here, there's this gap here on the CME chart we haven't even filled yet. So maybe we go ahead and fill that gap as well. It's quite possible. Bitcoin doesn't have a habit of going back and maybe filling in some gaps. So that's what, that's where I'm looking at things at the moment. And the last thing I'll say is this from, from an Elliott Wave perspective, this rally is not to me, is not corrective, it's to me it's actually impulsive. So we've got five waves already in this rally. This five wave rally tells me that we're in the beginning of a major. This, this to me is wave one of a longer term bull market in Bitcoin. If I'm wrong, fine, then the market will tell us, price will tell us if I'm wrong. On this point, on this point, if we break support levels. But that's my main view on bitcoin.

Thanks Alessio for that perspective. Do you have anything to add there, Johan?

So for background. So we currently trade very much cryptos, what's considered delta ones. We trade futures and spot at Wintermute. But I used to trade macro for a long time, so I traded interest rates and listened to central bankers all day. And there are things that make me reminiscent of 2008 when I look at these sort of correlation when typically you get equities and bitcoin this time around correlated on the way down. But 2008 was essentially, you were diversified, it didn't really help you because everything would go down together, excluding obviously QE and the bonds being bought up by central banks. But the moral of the story is when people lose money in equity and they happen to hold some bitcoin as well, they get liquidated. They need some money to pay for their debt essentially or to pay for their losses in equities and then they go and have to just go and take their bitcoins and actually sell them. And that creates a lot of auto correlation there across these assets. And it's quite interesting to see that, you know, the central banks coming in the States coming in, just saying, you know, here's plenty of money. Here is essentially a universal income recreated in many countries, you know, turning more socialist than they've ever been. And that, that actually just, you know, for me that's the main explanation about the bounce back in the, in the equity market and you know, cryptos. I like to believe that the correlation from here would be much more, you know, would be much less from here and actually just you know, push bitcoin further, justifying actually the fact that if, you know, states get more and more debt and then, you know, the fiat currencies get depreciated over time, then actually there will be more and more interest for alternative assets and be more interest and more justification for, you know, crypto, crypto space and growth of the crypto space as such. And the crypto space is still so small that I think there's a lot of room on the upside for, for bitcoin in particular. But you know, the rest of the.

Cryptos, now that we've covered the short term, what's your long term analysis of the bitcoin market as we head towards the halving and beyond? Johan?

I think there's plenty of growth from here. So my usual comparable is the gold market. That's about, of 8 or 9 trillion I think. I think unless you can actually have better figures, a bit of more accurate figures than me in the, in the size of the gold market. But there's plenty of, you know, uncorrelated returns that can be achieved through bitcoin. I mean through cryptos in general over time. Yes, as it grows and as you know, bigger and bigger investors coming to, into the crypto space there will be some more correlation with equity market and the rest of the, and the rest of the financial world. But I think there's a, you know, the Inflation of the state balance sheets intrinsically means that there will be more, more upside for, you know, digital currencies in general. And, and there's, you know, there's plenty of use cases in payments and in, you know, the everyday life that, that's actually that are starting to come. So making it more relevant.

Alessio, what's your outlook on the long term success of the bitcoin market?

Well, it's a good question. I was listening to Johan, it's interesting what he was saying. I'm quite interested by his comparison to gold. He was saying, personally, I gotta be honest, I still go back to what I was saying earlier in this conversation that I still see this correlation between Bitcoin and the stock market. Now at some point maybe it'll decouple, who knows? But until there's this correlation, I need to see proof of a decoupling before I can change my mind about that. So if I was to say how do I see the long term picture on bitcoin? I'll give you my long term picture on the stock market, which will probably answer your question. I remain bullish on both. So I remain bullish on the stock market. I think we're going to go significantly higher in the next few years on the stock market, which people may laugh at this point. I totally get it because people are saying what are you talking about, Alessio? Come on, we're in a recession right now. I mean look at the economy right now. It's going downhill. People are massive, massive unemployment right now. Not to mention the whole crisis with the virus and sorry, I shouldn't have even said that V word. Anyway, the bottom line is that people will look at the economy right now and they think it's ridiculous that anyone to be bullish on the stock market. But actually I'm taking a contrarian standpoint. There are a lot of things to be bullish about. Number one. Usually history has shown that the worst part of the economy is usually when you see a market bottom, usually market, there's a lag between the economy and the stock market. So usually the economy goes into recession by the time the market has bottomed. Classic example is 2009. In 2009 we had the worst economic news, probably one of the worst economic news in history. Massive unemployment, bankruptcies. GDP numbers were terrible. Similar as right now. I would say right now we've got massive unemployment, as you can see and terrible numbers. Probably going to have some more terrible numbers. Bankruptcies probably soon as well. But the fact is the market as you can see has rallied despite all the bad numbers. The Same goes in 2009. 2009, the market went up, stocks went up 60% despite all the bad numbers. So I would say forget the economy, forget the economic reports, forget all that bad news, focus on the price. I think we could make all time new highs maybe by the end of the year, if not this year, at the very least by 2021. I actually think by this year we'll make new highs by the end of this year on the stock market. So that could mean that we might make new highs, well, not all time new highs, but we could See Bitcoin above 10,000 by the end of the year. Now don't get me wrong here. We're not going to go in a straight line. Of course I'm expecting volatility, of course I'm expecting retracements, pullbacks. It's not going to go in a straight line. We're going to see a lot of glitches along the way. But my long term target, as you're saying, by the end of this year, by 20, 20, 2021, yeah, I think bitcoin will be in the range of over 10,000, probably in the 15, 10 to 15,000 range by the end of this year. So that's what I'm thinking.

Johan, do you also see this discrepancy between the stock market and the economy?

So this is more a former macro trader that, that speaks now is that I think, I think you can see the stock market, you can see financial markets like a prediction machine. So what they're trying to do is you're trying to be like what you're pricing. Now what you see when you look at your stock price is very much what people think is going to be in like one or two years time. And if you're ahead of, you know, if you're able to predict that better then, then, then you will see, you know, you know, good buy or sell opportunities. And it's very much this, you know, continuous assessment that happens. So there's this. I completely agree with this. Well, for me that's the best way to explain the decoupling between all the non synchronization of economy and the markets per se. Just really see it as a prediction machine. And we see if it's going up now, it's because people think economy will be better in 1, 2, 3 years time as such. And they want to be ahead of that curve. So they want to buy things now.

So moving back into the crypto markets, are there Any altcoins that are standing out to you at the moment, Johan?

There are a few actually. So Ethereum as an infrastructure play, I think it's, you know, it's come back and out of favor here and there. I quite like for a long time, I quite like eos. Not necessarily always in terms of the project, the quality of the project, but it's because they've done, you know, good and bad things with their money. But I like the fact that my perception of it is they raise so much money through their, you know, eternal ICO that there's some sort of flaw around the one and a half, two dollars. Why I always feel that it's a good opportunity to go and buy some and there's enough upside towards, I don't know, seven, eight dollars or so. I think it bounced back actually. So through the sell off in mid March, it came a bit under the $2 and just bounced back off with to probably about 2.7 nowadays.

Great. Alessio, which altcoins are you keeping your eye on at the moment?

First one I wanted to show you guys is Chainlink. I mentioned Chainlink because every time I talk about cryptos on my channel, on my YouTube channel, people always say talk about, talk about chainlink. So I get a lot of comments about this all the time. So I just want to mention I'm not promoting any of these cryptos. Obviously they come with a huge amount of risk. But again, these are the ones that I get asked about a lot. Chainlink is one of them. What I like about this particular chart of Chainlink, which is that it seems to have already put in a five wave pattern, a five wave move. It's above its key averages, above a 21, above its 20, above its 200 moving average. Green line. The green line is a 200, so unlike Bitcoin, it is actually above its 200 moving average there on the daily chart. On the weekly chart, it's also looking pretty strong as well. So yeah, I quite like this one. I think that it's already started the five wave move up. We might see a pullback or some kind of retracement probably in the next few weeks. But I think that pullback likely will become maybe a buying opportunity for, you know, people who might, you know, people who like this particular crypto, you know, and that, that, that, that probably become wave two on that, on the chart I'm also looking at Monero. Monero is one that I've always mentioned before quite a few times. Let me just bring the chart up Here so I can have a look at it. Xmr yeah, I was talking to Dominic Frisbee, author of the book, what's the book called now? Bitcoin the Future of Money. And he said this is one of his favorites. So there are some people actually looking at this again. Monero is considered to be one of the cryptos that has been, has a benefit in terms of its privacy features. So from a fundamental perspective there is quite attractive. And as far as a technical perspective, I quite like it too. It's above its 200 daily moving average there. It's above some of its key moving averages right there on this chart. Could it still have a retracement or maybe a pullback down to 50? Yeah, it could. I think a pullback to 50 probably will become the next low. I think it should, I think as long as, as long as it remains the 50 left. As long as Monero holds above 50, bulls remain in control here on Monero. If it falls below 50, I become worried because falling below 50 opens the door for a drop down to the march lows on Monero. So that's what I'm, that's what I'm looking at there. I'm also looking at Dash. Dash I quite like here as well, I gotta be honest. Dash chart doesn't look that great right now. It doesn't seem to have put in the five wave move. So I don't like this chart right now. Nio is the Chinese backed currency cryptocurrency, I should say. Nio doesn't look good either because it's still holding below its 200. It's still below its 100 as well. And the movement just doesn't, doesn't interest me. The movement looks corrective in nature rather than impulsive. So yeah, I would wait for Nio to get above $10 for me to become interested there. But until then I'm avoiding this one for the moment unless it does a retest. So that's what I have there on these cryptos. That's all I got to say.

Great. Well, thank you everyone out there. Make sure you're trading safely. Thanks for coming on the show, guys.

Yeah, thanks Jackson.

Thank you.

Thanks Johan. Thanks. Cheers.

Thank you everyone for watching. That was trader Alessio Rustani and co founder of Wintermute Trading, Johan Turpin. My name is Jackson and if you enjoyed the video, hit that like button and subscribe to our YouTube channel, Cointelegraph.

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