This Signal Has Only Flashed Twice In Bitcoin's History, It's Flashing Again Now

In last week's Bitcoin video, we absolutely nailed the top of this move where I said the— once the Asian high gets taken out, you wanna just go down and target the Asian low. And I even gave you guys this exact level where you wanna buy Bitcoin. Like you can see this line drawn here. If you look back at last week's video, boom, right? We caught the exact bottom. The people who made some money, congratulations. To the people that are new here, welcome to The Art Of Crypto where I give you an analysis of the markets from the perspective of the market makers because those are the guys that move the markets and it would be a stupid idea not to trade with them and to try to trade against them, basically. So in this video, we're going to talk about Bitcoin and what is potentially the next move for Bitcoin and how you can take advantage of it to make money. We are also going to talk about something else that is very interesting, which is the Bitcoin Historical Volatility Index and how this is going to predict the next move for Bitcoin. That, for example, the last time that the historical index was these, like, so low, which is right now as well, the historical index is really low, Bitcoin either dumped 50% in the next couple of months from $6K down to $3K, which was the capitulation and the exact bottom of the 2018 bear market. As well as the other time that that happened, Bitcoin pumped 700% from $9K up to $70K, which is the peak of the bull market. Like, right now, the fact that the Bitcoin Volatility Index is this low historically speaking is huge, and I don't know why more people aren't talking about this. We're We're also going to cover a little bit about the USD Japanese yen, as well as the US 10-year Treasury yields. Those 2 things are really, really important to understand the potential next move for Bitcoin, whether it's going to just pump straight up back to $25K, which is my theory, or vice versa, and it will actually cause Bitcoin to just go down. It's stuff that you don't really hear a lot of people talk about, but super, super important. If you want all of that good stuff, make sure you stay till the end of this video. Otherwise, let's get right into it. So let's just hop onto the 1-hourly chart because there are things that I wanna show you that really can only be seen on the 1-hourly chart. So couple of things, but for now I'm still looking for Bitcoin to just take a pump because if you just go onto the 4-hourly, this will be illustrated a lot clearer. Currently Bitcoin is trading in a range from this high to that low. So Currently Bitcoin, if you take a look at this, it's just trading within this range. Usually in a range, you buy low and you sell high. Duh, like that's pretty obvious. And yet so many people struggle to do just that. So within this range, we have retested the range lows last week. And sure, you can argue that you have just formed relatively equal lows on the 4-hourly right here, which is really important because for those of you who follow this channel, I'm sure you know what I'm gonna say next. Whenever you see relatively equal lows or relatively equal highs, these are the areas where there is the most liquidity located at. And the market makers move the markets based on liquidity. So wherever there is the highest point of liquidity, the market makers will target there. Similarly, these highs right here are relatively equal highs as well, which means this is a level that the market makers is going to be attracted to. Now this is the pro tip on how I prevent myself from taking bad trades and only take the best trades. I always, always wait for one of these key levels to be taken out before I do anything. I'm not going to get in the middle here, right? This is not where the highest possible return is going to be located at. The highest possible return is once the price, for example, takes out this point of liquidity right here, right? Price takes it out, it bounces super hard. This is where you take your trades. This is where you take your trades. This is where you take your trades. You don't take it anywhere else because you're just gonna be caught out in the middle of nowhere and your risk reward is just gonna be horrible. And in the meantime, while you're stuck in the middle of nowhere, The price is gonna move up and down and you're gonna be just panicking and like, oh my God, the price is, oh, I'm so red. What do I do now? Do I close the position in a loss? Or it's just, you have so many nights where you cannot sleep. If that is reminiscent of your situation, I totally understand. This one pro tip is going to save you so much heartache and so much money. Anyways, even though there are relatively equal lows here, which could mean that Bitcoin can just be drawn down back to $18K, and honestly, if you break this level, you're gonna go all the way back to like $17,400. However, I don't think that is the most likely scenario just because we have retested the range lows recently, and I don't see a reason why we wouldn't go retest the range highs, especially now that you have just formed— this is called inducement, right? When you get 2 relatively equal highs and a very juicy area of liquidity right above it. So this is known as inducement. People will think that this is going to be the real resistance when in fact this is just liquidity. And once price goes above this level, it's just going to go straight up. That is level right here at $20K before getting rejected, right? So if you see price going to these relatively equal highs, you don't wanna take a short here. You wanna wait until price takes out this level because this is the more significant level. You can also argue there is another level over here, but the one that I'm looking at particularly is $20K because that is a psychological level as well. So basically play is going to be to take a short-term short to hit $20K, maybe just take like $400, $500 worth of profit, but ideally, right, Once you get the pullback, you're going to be looking for a long. Where do you look for a long? Oh, that's the million-dollar question, which I am going to answer right now. Basically, if you go straight up right now, you're gonna leave behind a gap. Imagine if price moves straight up right now. What you wanna do, if you wanna draw a fib from, let's say price just goes from here up to here, for example, you're gonna wanna look for the 0.618 or the 0.705, and you wanna enter at either one of those levels. Similarly, this is how I determined that this level would be the key level in order to take a short as well. And similarly, this is how I determined that level was the best area to take a long. For example, you would not see any level here that would indicate that price is going to get support at this level, but it is the 0.705 if you draw a fib from this low to this high. So that is another pro tip and the exact methodology that I would use to look for a long. Okay, hopefully that answers your question. I am still leaning towards long for this one, okay, because as I've said, nothing really changed from last week. Range low got tested, And now the target is going to be the range high at $20,500. So basically the plan is going to be something like this, something like that. Okay, my bias for Q4 is still going to be towards the upside all the way up to $25K. Now that Bitcoin is over, let's get into the juicy part about the Bitcoin Volatility Index. In fact, before I get into that one, let's talk about the USD/JPY first. Now why do I bring this up? The first thing we're gonna have to look at is the US 10-year Treasury bond yield. This is really, really important because The price performance of Bitcoin is inversely correlated to the government bond yields. I want you to think about it this way. The more lucrative the bond yields get, for example, if you invested into US government bonds on a 10-year sort of rolling period, you're gonna get a return of about, let's say, give or take 4%. If you do invest in it, it used to be less than like 2%, but most of the time from 2008 up to 2020, it used to be like 0.5% or even 1% at times, right? 2%. Not good. If you invested in the stock market from 2008 to 2020, you would've at least got a double or even triple on your money depending on what you invested in, right? Even the most stupid investor could have done well if they just invested somewhere around 2010, which is after the end of the 2008 bear market heading into the 2020 bull market, right? Any investor could have done really well in the stock market. Meanwhile, if you invested into government bonds, it would not be so lucrative, but Now that the government bond yields are going up as a result of the USD doing really well and the DXY gaining a lot of strength and the interest rates of the USD doing really well, now it becomes a lot more lucrative. And when more people choose to put their money into government bonds, there is not going to be a lot of liquidity left for the stock market and crypto, right? It's a very simplistic relationship. It can go a lot more in depth than that, but I'm gonna leave it at that, right? Let's just imagine it that way. So Currently, the reason I'm bringing this up is because you have just taken out a level all the way back from 2008. So this is the swing high that you've just taken out. In fact, if you go onto the weekly chart, you will see that these are relatively equal highs that just got taken out. As you can see here, one week, relatively equal highs. What does this mean? Usually when a key level has been taken out, we expect some kind of a retracement because most of retail is going to be thinking, oh, resistance got broken, so we all go long here. 10-year Treasury bond yields are going to go to the moon. That's not how it works. That's another pro tip that the market makers use. You never want to long after resistance has been broken because there is no such thing as resistance/support. There is only liquidity. So liquidity has been taken. You immediately look for the next point of the highest liquidity. In this case, you can argue that it's somewhere around 5%, right? Because if you zoom in here, this is actually a 1-week fair value gap. Not going to zoom in there, 'Cause, and you know what, just gonna zoom in just to illustrate this for you guys. You can see that there is a gap, right? There is a gap here. That's a fair value gap, which is going to be an area where the market makers are going to be really interested in because the algorithms that move the markets always wanna keep the markets in a state of equilibrium, basically balance. Whenever you get a gap in price action, that is an imbalance, and that's why imbalances always get filled. And this is also the reason why you hear a lot of people talk about the CME futures gap. That is a gap, that is an imbalance. Imbalances tend to get rebalanced. So you can argue that that is going to be the key level. However, that is still quite a ways away, about 1% higher for the treasury bond yields. Can we get there? Yes, I think we absolutely can, and I think we absolutely will. The only thing is when, that is the real question. And I think that Q4 this year, we will just take a little bit of cooldown. This is adding up to all of the factors that I've discussed in the last 2 weeks. For example, the DXY has just taken out a very key level over here at 113. Basically 114, and you can see that it's already starting to show signs of rejection. The DXY basically shows you the strength of the US dollar, and similarly to Bitcoin, right? When the dollar loses strength, this is when the Bitcoin bull market begins, right? At the beginning of 2017 until the beginning of 2018, that was the 2018 bull market, right? Again, here, March 2020. Take a look at the date when the DXY dumps. Bitcoin absolutely pumps until when the bottom for. Basically May 2021. You can see how if the DXY chooses— the DXY is going to dump right now, which I think it will in Q4. You can see how this will inversely correlate with Bitcoin and how Bitcoin's going to do really well. Now I'm pairing that up again with the US 10-year Treasury bond yields. You've just taken out a key level, so probably, right, in terms of higher probability that it might head downwards, and it's going to target this low right here at 2.5%. Now, is Is this going to go all the way back down to 2.5 in 3 months? Absolutely not. So to be honest, I don't think this move is done yet. So I think it's just going to be, you know, a little bit of a retrace, right? Maybe it just stays stagnant for a couple of months, and this will allow Bitcoin the move it needs in order to take off. Now, this is also pairing up with the idea that the USD Japanese yen, which again, the USD Japanese yen is one of the strongest correlations Between, like for the performance of U.S. government bond yields. Basically, if this is performing really well, this just means that U.S. ten-year is probably going to perform very well as well. If the U.S. ten-year starts going down, or rather when this starts going down, then the U.S. ten-year is probably going to start going down as well. And you can see that we have just taken out a level all the way back from 1998. Right? We've just taken out a key level all the way from 1998. Now, is this the top for USD Japanese yen? I don't think so, and I'm going to give you my reasons why. So. If you take a look at the CPI report for Japan, it's sitting currently at about 3%. Now, the Bank of Japan has said before that they wanna keep CPI right at about 2%, which is the sweet spot. So the CPI, which basically just stands for inflation, is not bad. It's not to the point where they need to take like just very severe interventions in terms of monetary policy to raise interest rates basically. And because that's not gonna change, I don't think the yen is going to perform super well against the USD, which has historically high interest rates right now. And for those of you who are not familiar, With these forex terms, basically you can imagine you can just simplistically speaking, right? Let's say USD interest rate is going to be 1%, right? And JPY is let's say 0%, 0.25%. Let's say because of the fact that the interest rate of USD is higher than the Japanese yen, it's just going to perform better than the Japanese yen. It's as simple as that. So with USD interest rates this high and the Japanese interest rate that low, you can see why I think that the JPY is going to continue higher. But the the question of when. Is the real question. And I believe that again, we take a little cool down or we continue upwards. Nothing pumps straight up forever, nothing pumps straight down forever. This is also coupled with the fact that generally, you know, let's take a look at Japan. They're sort of losing their dominance across the world. Japan used to be really high in this, in the rankings of like technological innovation and, you know, cars and just technology. You know, they were innovating. You don't really hear much of that. Nowadays anymore. And it also has to do with a rapidly aging population. Just these things add up to the fact that the Japanese economy is not going to be performing the best, and it's probably going to decline even more over the next, let's say, few years, maybe even a decade. And because they have a declining economy, they cannot afford to raise interest rates because that would make it really, really hard for their people and just cause a lot of suffering for their people. They already have enough bills. If you raise interest rates, that's just gonna increase the prices of mortgages and, you know, all that good jazz. I hope I haven't lost you guys here, but to those who are still in here, I can tell that you appreciate a high-level overview and the intellectual breakdown of macroeconomics in general. For those of you who are still here, I want you to comment down in the comment section, macro, and like this video. It's a small gesture, but it really helps out the channel a lot. So yeah, basically the summary is dump, pump, okay? That's for that one. So now that you know all of these pieces of information, Alongside the DXY, now we can finally talk about the Bitcoin Volatility Index. Because if I talked about this beforehand, it would not make sense. You would not know why I think like, like why I'm about to say the things that I'm about to say. So based on all of these factors, do I think that this is going to be the bottom of the 2022 bear market? Absolutely not. Again, like I said, interest rates are going to continue. Just based on this, it would be easy for me to just say, oh, it's just going to dump 50% over the next few months, which will put Bitcoin at about $10K, which is likely during this bear market. Again, I'm not trying to say that it's going to happen. What I do is I try to give you as objective of a breakdown from as many different angles as possible. At the moment, as of right now, I do believe that Q4 is still going to be a relatively good month for Bitcoin. In that case, Bitcoin volatility is probably going to spike up just a little bit. And I apologize that I cannot give you guys an answer right now. I cannot give you a definitive answer as to what this is going to cause because we simply do not have enough data to make a solid argument at the moment. I can tell you what I think will happen in the next 2 to 3 months. Very hard to predict beyond that, especially with something as significant as a 50% move from $6K to $3K and a 7x move, which basically kickstarted the bull market. These are very, very big predictions, right? It's either bottom of the bear market or capitulation. Very significant thing. What I think is gonna happen is BVOL is just going to continue staying Lower, right? It might spike a little bit. You're gonna see that spike on Bitcoin. But after that move, when we're gonna see the true move. And by then, I am definitely going to do another high-level overview and breakdown of what is the next likely move Bitcoin once this happens. And if you wanna catch that, just subscribe to the channel. Listen, the truth is that you can watch as many of these types of videos as you want, but the people that work with me one-on-one get 10 times the results in 1/10 of the time. Having someone to push you and guide you into the right direction It's likely the missing piece you needed all this time to finally find success. If you wanna work with me, I'm about to start a 20-person high-level mastermind where I will work with you personally to take you to a point where you're making an extra $10K a month trading regardless of your account size. Now, because this is a beta cohort, I wanna make sure that I can get you mad results. And for that to happen, you need to have an account of at least $5K to $10K in order for this to work for you. If that sounds interesting to you, I want you to drop me a DM on Twitter @TheArtOfCrypto. But don't take too long to decide. Half the spots are already taken up, so there's only 10 more spots left. Bye-bye.