Will ETFs push Bitcoin to $100K? | Interview with Big Cheds

All right, folks, Big Chads is a professional trader and one of the founding analysts of Bitcoin Live, an educational platform for crypto. He also has a background in psychology, which he uses to help people deal better with FOMO and other emotional decisions in trading. Chad was also an amateur pro poker player and says that experience of risk management helps him in trading. He aims to empower people to be the best traders that they can possibly be. Big Chads, thank you for joining us today. We are super, super excited to chat with you. How's it going?

Thank you for having me, man. I appreciate, I enjoy the conversation. Gentlemen, I was listening backstage and I enjoyed hearing your perspectives and I'm happy to be here today. So thank you.

We are definitely curious to get some of your insights and look at some charts and, and kind of walk through a lot of what you're seeing in the market right now. So I guess we'll start with just like bitcoin in general, what in your opinion has happened over the last week and if you wouldn't mind pulling up a chart and feeling figured to like kind of walk through what you're seeing right now.

Yeah, sure. I have my screen up if you just want to pop it up, we can definitely do that. So bitcoin's clearly been accelerating and we had that over the weekly time frame. We had that equilibrium, equilibrium pattern where we set our high 64K. We set our low in this 80 day rectangle and then we set that big lower high and that was the level to watch, right? 52K. So we set the lower high and then we set our higher low Weekly time frame MA50, the orange line. A simple moving average weekly chart never broke down even. You know, while the daily chart itself broke down a little bit below the MA200. We had a little bit of chop here and you know, even for a time we lost that key horizontal. The January highs and the February low really want to flip that resistance and turn it into support. So we kind of lost it here with that chop in September. But that's the thing, you get that noise on lower time frames. Weekly chart never really let up, right? Weekly chart really had that strength. And if you weren't in bitcoin, you're waiting for a ghost signal. It you had one on that, that lower high break at 52k, you could have entered there, set your risk at that level. That was your thesis. And you know, after we hit that, you were, you're watching this all time high test, 64K. You know, a lot of people have been asking me and I'm on Twitter at Big Cheds, people have been asking me like, you know, what's up with altcoins, right? Is it time to play altcoins? And when the money's going into the king or going into bitcoin, that's not the right time to play altcoins. But when bitcoin pauses and consolidates, you see the money flow out, you see it first, usually first flow into Ethereum. And we can talk about that. We just had that beautiful all time high test on Ethereum and it flows into other altcoins. Hopefully you're playing ones with relative strength, ones that had been stronger before that consolidation, like Saul, like Luna, like some of these other things. And what was interesting, you know, we had that ETF and the other two guests probably know a little bit more about the fundamentals than I do. I just study price action. It all flows into the price action for me. But I was expecting some type of like a blow off move with that all time high. We didn't get it actually. We had had a nice kind of controlled rise. And if we go a little more granular here on the daily chart, you can notice the green lines and exponential moving. Average exponential means it gives more price weighting to the most recent candle. And you can see as it's been rising here, it's been using that 8 EMA as support. And actually even with today's volatility where it dropped down to 62K, you know, right off that 8 EMA. So it's having actually a nice controlled rise, making that new all time high above 64K. But what I noticed last night, I noticed that some of the other alts started to run, you know, and especially Ethereum. And that's Ethereum versus Bitcoin. But here, Ethereum on the USD pair, Ethereum was broke out of that. Really that 4K level started to break over that 4K level yesterday. And that was a little bit of a clue that some volatility was probably coming in bitcoin, you know, because you need that, you need that money from, from bitcoin to flow into the other alt for them to really have that kind of run. So, you know, how do you know when these things are going to happen? You know, after you make an all time high, you're probably going to consolidate for a little bit. And we got that consolidation money flowed into alts. And then, you know, we talked about Ethereum hitting all time high and then we had some weird kind of low time frame like, like A cascade in some of the, of the servers, the exchanges rather where like bitcoin dropped to like 10k and binance us. I don't know if anybody really filled. When you see those, when you have those moments of kind of short term, short time frame volatility, people tend to panic. And so when that happened, I actually took a little bit of a short just to protect my long positions when I saw that happen and I actually just covered that shorter closed out the short really at 62k on the EMA 8 EMA 8 tag. So you've got this cycle where bitcoin runs, Bitcoin pauses. All coins will, will run. And that's like the normal cycle. And then we added that kind of exchange volatility today. And so that really caused, you know, this further consolidation we're seeing right now. You know, is bitcoin going to roll over a little bit here? You know, probably not. Certainly not as long as we're holding our rising, moving average support that rising demand. But when it does pause and hopefully, you know, if it does something nice and neat in the short term, if it can just kind of churn here for a while, maybe do a short term ascending triangle or some type of consolidation pattern that will give a little bit of a breathing room, you can allow some of these other altcoins to rise. Ethereum, I talked about Sold or some other good ones up there. Dot has been strong as well. Luna as well has been quite strong. I think you go for Ethereum first when you think that bitcoin is going to pause for a while. We basically did test the all time high. Didn't quite break it. I think on one exchange maybe it did break it, but for me it really didn't. You want to see it across all exchanges to really say, you know, hey, new all time high. Ethereum is definitely a buy the dip. Right. You've got pretty well established horizontal levels. 3650, you know, right here at the lower high for Ethereum. Right. We talked about.

The question is why did Ethereum fail to break out of hand? Is that a bad sign or it was expected?

I don't know if expected or not. I wouldn't say it's a bad sign because you're still, you know, we're at what, 4100. We're still a lot higher than we have been recently. I think if we're back below, you know, 3950 or below that 9-5-High, that's a little more weakness. But we don't have that much weakness. Yet, you know, think about an ascending triangle. If you think about an ascending triangle, you have a very well defined resistance and you've kind of a rising demand. So it may, you may stop, you know, there and pause a little bit. But when it comes back down, you have aggressive buyers, you're more anxious buyers who jump up, jump up the bid and push that rising demand. So, you know, an initial rejection is fine. It's not a bad thing per se, especially at a key psychological, at a key level right at that all time high. I think some people try to get cute, they try to guess the top and then sometimes you get that selling, you know, right at the top. But also that happened with that volatility on bitcoin where bitcoin, like on some exchanges, it dropped right through everybody's bids. People started to panic. So I think it was bad timing for Ethereum. I think a bitcoin hadn't done that, Ethereum probably would have briefly paused and continued on. But I, I think Ethereum is one you want to continue to target. If it gets lower, you know, who knows what's going to happen over the next few days. Maybe we get a deeper flush. But if you get lucky, maybe you can buy Ethereum at 3650. You know, something like that. If you get even luckier, if the whole market starts to really shake around, you know, you want to have that low ball bid, that bid that you don't think will fill, but if it does fill, you're in a good position, right? You want to buy the red in an uptrend, you want to buy a dip in an uptrend. So that's kind of what, where I think we're at right now, kind of in the shorter term. We're still digesting the etf, obviously. I think that's a great, a great thing for kind of market confidence that bitcoin is not just going to go away. You know, that's, that would be my take on that. Do you think the ETF is going to be the thing that pushes bitcoin.

To a hundred thousand?

You know, the whole tail wagging the dog. Well, it, you know, I think bitcoin has natural momentum, pushing it to a hundred thousand when you have just not enough supply. I think a lot of people who are buying bitcoin are taking it off exchanges and they're holding it generally speaking. I think that will push it towards 100k. I think it definitely helps. There's no doubt about it. I don't think it's a bad Thing it gives some people more confidence to buy it, you know, because, because Wall Street's getting involved, you know, they've been involved for a while now with, with other, you know, like GBTC and stuff like that. But it definitely gives them a little bit more confidence and I think it will push it to 100k, but I don't think it needed that necessarily given the natural momentum and natural trajectory, you know, on longer time frames like the weekly chart, you know, just a nice beautiful uptrend on the weekly chart and yeah, I would say.

And so do you have any like price targets that, that you're looking at specifically for Bitcoin or Ethereum in kind of the current environment?

I, I really hate targets. People ask me that because I feel like when you, when you focus on a price target it takes you away from what your job as an ant technical analyst is to observe the price and look for clues of strengthening or weakening momentum. And that's kind of how I approach this, you know, a price. I don't have a price target on, on Bitcoin right now per se. I have support targets. I have the rising MA50 on the weekly. I have the daily EMA8. Right, we talked about that 52k level. I have support targets that I want to buy. I've identified levels that I, I would believe to be kind of a discount, you know what I mean? A discount to, to the current market. But I, you know, you can do a Fibonacci extension and you can, you can figure out what the, the height of a move is going to be, stuff like that. And if you have a well defined pattern, you know, like a head and shoulders, like an inverted head and shoulders, you can use that for a target like this 80 day rec. You could have done that. You could have taken the height of the rectangle and you could have extended out from that a target which I think was like 55, 60K. So if you have a well defined pattern, you know, in classical charting that will give you some type of a measured move, you know, quote unquote type of a target, but when we're in essentially more or less price discovery, we're in kind of a, a brand new territory. You know, I'm not going to say 74k or 75k, it's a round number that sounds great, you know, everybody wins. I mean that's fine. So I really don't have targets does it? Doesn't work with my style, you know what I mean?

And so like if you wouldn't mind, just like Walking us through some of like the, the, the indicators. I see Bollinger bands. You talk EMA 8 like why do you use some of these things? And, and how does that benefit you when you're doing your ta?

So everybody has a different method. I think you need to find the one that works for you. It's kind of taken me a while to get to this point. I start out with, you know, for, for simple moving averages. I start out, I use the 50 period, which is the orange line. I'm trying to hide some of these other things to simplify it. So I use the 50 period moving average, right? It's a simple moving average. Each candle has an equal weighting. That really helped me back here in April. And if we can observe In April, on April 19th, we had our first close below the daily 50 since Bitcoin was around like 7 or $8,000. Right. So that was a clue, right? That was, that was a data point that the, that the trend was weakening. Even though it was strong, it was weakening. Right. So I used that 50 moving average to give me a kind of signal and on the way back up, that allowed me to kind of buy back in here with confidence right back in July when we kind of regained that MA50. You can also use it for, for a cross, people use the death cross and the golden cross. I don't really pay too much attention to that, especially when there's a big difference between where the price is and where the moving averages are crossing. But you can use those for moving average crosses. Of course, you want to keep in mind that you need a market, trending market for a moving average cross to have any kind of power and you want to have the price with a close proximity to the cross. I use the Blue line, the 200 moving average. You know, by definition, by definition, an uptrend rising 200 moving average with the price above it confirming that. So I kind of use the 200. You know, on the weekly chart. The 200 has been amazing for a buy. The dip kind of long term. You see it back here, the double touch back in 18 and then kind of the black swan drop. You know, you were buying Bitcoin near the 200 moving average in the weekly. I mean, that's just a great kind of opportunity which, you know, at some point it will come around again. But maybe at that point the 200 ma is, you know, up here by at that point. Right. So you just something you kind of trying to keep an eye on going forward. So I use that kind of longer Term moving average is simple for X. For shorter term, I use exponential moving averages. The 8, which is the green line. I mentioned that exponential is more price weight into the most recent candle and I use the 34. So kind of when the price is initially accelerating, it will often use this 8 EMA as support and it will bounce between the upper Bollinger and the eight ema. We're seeing that here right now. We saw that on the weekly chart after we broke above. Really 14k that 14 or, you know, 12, 13, 14k breakout. Upper ball, injured EMA 8. Upper ball, injured EMA8. Right. And you got your first close build below the weekly EMA 8 April 19th as well. That was another data point. So that's kind of how I use that 8 EMA. You can also use it as a, you know, for a crossing signal. So I talked about good illustration of that would be here in the daily chart. And I'll just remove a couple things to make it a little bit cleaner. So. And I'll get the Ballinger band out of the way. So if you'll notice, the green line never crossed the yellow. It, you know, pulled back, we found support, pulled back, found support, and then boom, we finally had our first, you know, cross here. A little bit of a fake out. And then it crossed back below. So you could see that's another sign of weakening. Right? Technical analysis is not about predicting the future. It's about observing the trend. You identify it, you ride with the trend, you can profit from it. And you want to identify data points, ideally horizontal levels, maybe moving averages, that will tell you if that trend is strengthening and weakening. Right? So that's how you can use that moving average, moving averages for that as a cross, as a potential sign. And then back here, we had the cross back up above, right. We also gained the daily MMA50 at that point. Two kind of multiple data points. You know, as well as you know, if you want to draw a diagonal line, you had a diagonal break. If you want to do do your horizontal, you want to be a little more conservative, kind of had your kind of lower high break there as well in that level. So you had a couple things going on. So that's what I use in terms of moving averages. I use the Bollinger bands as well. You can think about. Bollinger bands are excellent in terms of helping you to understand how to use your Japanese candlestick signals. You want to have a reversal candlestick at the lower Bollinger, a bullish reversal candlestick, because you need something to reverse, right? And you want a bearish signal to happen at the Upper Bollinger. We had a little tweezer top here. You know, for example, long upper shadow candles at the Upper Bollinger is a sign of kind of overextension. So Bollinger bands are not only tell you when the price is overextended, you know, usually when you dip below it in an uptrend, that's a short term opportunity. But it also gives you the correct place to use your Japanese candlestick signals. They kind of work really well together. So that's kind of how I use Bollinger bands.

But generally where you start, would you start with dominance index or bitcoin daily? Where do you start and how do you select which altcoin are you going to invest, for example?

It's a great question. So I actually don't even. Dominance chart actually I, I look at the bitcoin chart and then I constantly, I'm scanning altcoins and I kind of have a list that I'm observing. And you want to think about. Now your question was a great one. Like where do you go? What to. You want to think about the concept of relative strength. Alright. So when the whole market is correcting, the whole markets correcting. But when it, when it stops and it pauses, you want to be scanning through, you know, whatever time frame, one hour or four hour, you're seeing which has the most strength. So whatever was strongest before the correction is most likely to continue back up. So for example, Seoul has been really strong. So this is one you want to target. Especially if the whole market starts, you know, starts to go up again. Right. Luna has been generally quite strong. And what is relative strength? Well, look at Luna. Luna is above its 200 moving average. It's above its 50 period moving average. That's relative strength. Like what is not, what's not as strong as that. Here's vet. Vet. Just barely getting above the 200 or really actually let's see LTC barely above the 200. You want to look at, you know, relative strength like Matic. Matic. Look at that nice bullish chart, you know, bouncing off its 200 moving average. You want to understand which ones are relatively stronger to the other altcoins and you want to focus on those. Make a list of what's the, what the strongest coins are. And when you're ready to deploy your funds, you want to deploy them in the direction of relative strength. You don't want to be trying to guess downtrends, right? You're going to get burnt like guessing when a trend is going to reverse, it's hard. If you can. If you're an expert, you know, you know you're better than me and you can do it right? You want to find. You want to play continuation plays. You want to buy dips and uptrend and that's kind of where you want to focus your attention on relative strength.

Awesome stuff. Big chads, you are enlightening. Not only me, everyone, I think in the audience. We greatly appreciate you giving all your insights with the charts. This has been absolutely awesome. We definitely want to have you on again. We appreciate you jumping on today's show, man.

Having fun. I'm glad you guys. Hopefully you're all doing well. I didn't ask you but I hope everybody's doing well out there and every day is a gift and I'm just enjoying today, you know.

Awesome. Right on. We appreciate you jumping on Big Chad's looking forward to having you on again at some point in the future.

All right, take care. Fell.