Bitcoin: Dubious Speculation

hey everyone and thanks for jumping back into the cryptoverse today we're going to talk about Bitcoin dubious speculation if you guys like the content make sure you subscribe to the channel give the video a thumbs up and also check out the sale on into the cryptoverse premium add into the cryptoverse docomo ahead and jump in so in this video we will just dubiously speculate about various scenarios and what certain things could lead to those scenarios playing out I'd like to remind people no one has a crystal ball right no one knows what's going to happen it's all just sort of a guessing game that we try to figure out we try to put the pieces of the puzzle together and the reason we talk about multiple outcomes is because it's sort of an admission to ourselves that no one actually knows what's going to happen and so why not consider a couple of different outcomes um as well as as you know sort of reflect on the idea that markets change based on new information right new information and so the future is unknown and we will of course go into it together so let's go ahead and sort of talk about what's going on right now uh with Bitcoin so we have gotten back above 100K okay so what essentially has happened so far is it's a very common pattern that that Bitcoin has sort of gone through and it's basically you know you set these lows and then it just kind of bounces along those lows for a while the same exact thing actually happened last year around this time right I mean we this this low was sort of said in early December and it we swept that low in late January but we just kind of kept bouncing off of that low we even had a bounce off of this low in early January right there this time we got a bounce starting in late December but again the low the the the zone for where this low was was really established like late November or so so again this is a pattern that we've seen before and and so you know essentially what happened last year at this time we're going to look at this in a few different ways okay if we take the time component and say you know forget the pattern right forget the actual pattern that occurred let's just go with the time component and say well it's January what happened last January well what happened last January was first of all going into November Bitcoin rallied in November and stalled out in December same thing over here right it rallied in in November and stalled out in December and then it kind of just chopped around for a while and then in early to mid January there was a rally by Bitcoin up here and you could argue from a timebase perspective maybe that's exactly what's happening right now right you can see that Bitcoin rallied into you know January like sort of mid January or so so that's one way to look at it right maybe it's just repeating that and if it does repeat that then let's see how high could it theoretically go right I mean if it you know back over here from the December early December top it went about about 9 or 10% higher okay so if you were to take uh you know this December top I guess this one was even higher right here that we just put in a few a few days ago but if you just take kind of like this one right here 10% higher gets you to 10 basically the prior high now if you actually take the prior High and go 10% above that then of course that gets you to around 120k that would essentially be like repeating this pattern right where it it basically just tags this trend line again and you can see that actually by the inauguration January 20th it would correspond to approximately $120,000 so that's obviously you know the more optimistic way to look at it and remember if it were to do that though that's actually deviating from what it did over here because over here it topped out sort of early to mid January like January 10th or so um and then came back down in late January and then swept all of these prior lows right so it actually swept these lows that had been holding as support throughout December and January so if it is to go up into later January that was that would actually be deviating from what happened over here and so that it raises the question well is it the same thing because one way to look at this pattern right here is to say well what if it's you know what if we've already had this drop right like what if this drop has already occurred and it's just a tempered version of last year um which is a possibility but again you know and I've mentioned this a few times Bitcoin did something different this December than it has done in you know at least the last few December that we've had in having years for instance this December Bitcoin was actually red in December right it was actually red and in December 2020 Bitcoin was not red right it was very much green in December of 2016 it was not red it was green right Bitcoin went up 30% in December of 2016 in December of 2020 it went up 47% but in December of 2024 it actually dropped 3% so it's not exactly the same setup maybe if we check December of 2012 uh it was also green so this is actually the first December of a having year that we had that was actually red for Bitcoin so one of the things that I've mentioned before is is some of the times you'll actually get a correction in January of the post having year the last two cycles we had a correction in January of 2017 and January of 2021 now you don't actually have to get that this time uh you know every every cycle will be slightly different if you look at 2021 there was a 30% drop and if you look at 2017 there was a 30% drop but the those 30% drops came after rallies in December and so I guess the question is is well did we just sort of front run that correction but I guess the Counterpoint is that this was only a 15% drop not a 30% drop so if it were to play out like 20 23 just from the timebase perspective right just from like sort of like the the same type of pattern then you could see it you know go up come back down sort of sweep the lows and then try to pick back up in February that's essentially what it did last year and but but I here's the thing right I mean every cycle is going to be somewhat different and I don't remember that many people last year that were calling for this move right if you follow this channel we said over and over again that 73k would likely be a midcycle top that would probably hold as the top for about 6 to n months definitely was not a popular view when I said said it now everyone who who sort of fought against it acts as if it was the most obvious outcome all along even though that's not what they were saying back then but what caused this drop right what actually caused that drop I think first of all what I truly think is that narrative follows price not the other way around right narrative follows price show me the price we can come up with a narrative to support it okay for instance if if the price of Bitcoin had gone up over here it would have been easy to find a narrative to support that as well but we did follow this quite closely and one of the things that is important this week is that we actually have a lot of Labor Market data coming in so the outcome in the short term over whether Bitcoin say rallies into the inauguration or dumps into January 20th because last year it dumped into late January but in in um in if you look at like what the QQQ did when it launched it rallied hard 54 you know up until 54 weeks after the SPF launch which this would be January 20th the inauguration day so I would say this if you if first of all I have to at least try to show you why this could be important and that's to show the unemployment rate on this chart now if you show the unemployment rate on this chart it I think it kind of helps sort of visualize what's really happening and and how the market is reacting the reason we show this is because the market needs a reason to go down not a reason to go up what I mean by that is markets generally go higher just because people like you and me DCA what we want to DCA into right and and you know there's money printing of course um and so in general markets Trend higher so the market doesn't need a reason to go up it just goes up the market needs a reason to go down and if when you look at the chart the the there's two main reasons that we talk about there's a third but the third is completely you know not even worth focusing on too much because it's I I feel like it's too difficult to follow for me so you have geopolitical risk which is just something I think you have to toss aside because you know who the hell can predict that the second is inflation the third is labor market right as long as you're in sort of this Zone where inflation is low and the unemployment rate is low then the market climbs the wall of worry we've been talking about this for the last couple of years what I think happened over here again price follows or sorry narrative follows price we called for the midcycle top right there before we saw this before we knew this was going to happen but when you look at it in history what you'll see is that as the unemployment rate went up every month without a breather Bitcoin was in fact going down then as the unemployment rate went down and leveled out Bitcoin started to work its way back up and then it was able to break out here so this is still more similar to what was going going on over here than it is similar to this when it was starting to accelerate quickly the unemployment rate so when we think about you know what is the most like outcome for Bitcoin going into the next couple of weeks I think a lot of it could actually just simply depend on what happens on Friday when we get the unemployment rate and and even there even with that there's some counter examples but this is what I would say I would say if the unemployment rate we'll just abbreviate it un rate right if the unemployment rate is equal or less than 4. 2% then that is good for Bitcoin that's how I would think of it so if the unemployment rate comes in on Friday at 4. 2 or 4.

1 or four probably a good thing for Bitcoin if on the other hand the unemployment rate comes in at 4. 3 then I would argue Bitcoin would probably chop around for another month then Bitcoin probably chops until February now what's interesting is that's actually what happened last year right Bitcoin chopped until February and and and when I say chopped I mean it could still sweep the high and sweep the low right it could always go sweep that high and then it could come back down and sweep that low right so it could do something like that where it sweeps the high sweeps the low and then Waits until February on labor market data to then decide what it's going to do that's the first two options if the unemployment rate is greater than 4. 3% so let's say it's 4.

4 then Bitcoin probably gets a correction that's what I would guess and the reason I say all this is just simply due to the fact that there seems like there's somewhat compelling evidence on the chart to suggest that when the unemployment rate goes up every month Bitcoin gets a correction when it just kind of does this where it slowly goes higher but not really that much higher Bitcoin generally goes up and you can see here as this is sort of come back down Bitcoin use that opportunity to break out right it's not going to wait around forever the market will give the the labor market the chance to say all right is it weak or is it strong if it's strong Bitcoin goes higher if it's not strong then Bitcoin drops so here's the thing though here there's an interesting thing to consider with all this stuff and that is the long and theal curve and the dollar okay now one of the reasons I was so bullish on the dollar one of the reasons I've been so bullish on the dollar uh up until around now was because I thought it would just follow the same path it did in 2016 right as crazy as that sounds right I I might sound crazy but it worked out and I said it would likely go to 109 to 110 and I said that back at the First Rate cut if you guys remember when the dollar was back over here everyone was screaming for the dollar to drop right and we said no there's probably going to be a rally by the dollar going into the end of the year the same exact thing happened in 2016 the dollar back then topped out in early January right which is where we are right now early January this is ear this is January 2017 we're now January of 2025 so this is what I would say it's kind of how I think about it right I would say that there's a good chance the dollar is going to top out this quarter it could have already topped right my my my thoughts on the dollar was just it goes to 109 to 110 conservative Target beyond that I don't really know or care but I thought it would at least sweep this high and it has I don't really care beyond that what it does because I I don't really think it's relevant to what I'm interested in at this point um in the short term I I I think that I mean if it goes up it's going to be a drag on on liquidity uh but this was the bulk of the move and that was sort of the the important thing to capture now here's the thing narrative follows Price Right narrative follows price not the other way around so back over here back over here when the dollar was all the way down here you had to think think what would cause the dollar to go up right why would the dollar go up I mean everyone was so bearish on it back in September what would actually cause the dollar to go from 100 all the way back to 109 and what we talked about back then was that the dollar was highly correlated to the 10year yield right so if you look at the 10year yield they were highly correlated to one another right if the 10e Yi goes up the dollar goes up and so the only way the 10-year Yi goes up is If the Fed is potentially cutting a little bit too soon right and and that's not even necessarily Fair because there's always a chance they haven't cut too soon we just don't know it yet but if the market is looking around and and you know the fed's cutting but the econom is still turning along as it always is 2 to 3% you know annualized GDP the market might question the fed's intentions like will that lead to inflation reaccelerating in 20 25 just as it did in the 1970s in post elction years this was actually what happened in the 1970s right if you go and by the way I like to be uh thorough so they not just taking my word for it there's always some new people that join in if you look at inflation year-over-year uh and you go back to the 1970s you can see that you know right here when it accelerated it was in 1973 right which was the postelection year um you know over here if you look at it it bottomed out in' 76 which was an election year and then it started to accelerate again um in 77 right it it moved from 5% all the way back up to 7% so I think that is is is sort of the the long of the O curve trying to accomplish what the FED is unwilling to right and and trying to give it a go and say well you know what if the fed's not going to take care of this then you know let the bond market take care of it and so when I was looking at the dollar and of thinking like well you know why would the dollar go up I was correlating that to the 10-year yield and saying well they're they're highly correlated so if I believe the 10e is going to go up which I did then I believe the dollar is going to go up and the reason to think that the tenure was going to go up and if you look at something like uh you know like like TLT or something which is just the inverse um one of the things you'll notice is that often times it'll you know it'll double bottom right or sweep AOW right it do that where it'll you know sort of double bottom sometimes it'll sweep that prior low and so the argument was you know best case scenario um will be that it just kind of sweeps this low worst case scenario could be that it actually sweeps that low eventually but it might just be sweeping this low okay so because of this right because of the thought process that TLT was going to go back down then it meant the tenure was going to go back up and if the tenure was going to go back up then it meant the dollar was going to go back up and if the 10year and the dollar are going up then the implication would be that the economy is holding on just fine right and it has right I mean ever since September the the the economy has been fine the unemployment rate has remained relatively low but again narrative Falls price so then it raises the question well if we're looking at the dollar chart as it relates to bitcoin and we're saying well what if it tops out in q1 of 2025 which is exactly when it topped out in 2017 in q1 right here you see that that's when it topped out in 2017 it did not go above the 2017 dxy high for five you know for five years right so if the dollar is to top out in q1 of 2025 then the implication is that the 10 year yield would likely top out in q1 of 2025 and if that is the case then the implication of that would be that the labor market will likely continue to loosen up as the year goes on which would then incentivize the FED to end quantitative tightening and go back to everyone's favorite quantitative easing but we haven't really seen that transition yet and the FED hasn't really given us any insight into when that transition from quantitative tightening to quantitative easing is actually going to occur one of the reasons you had alt season in 2017 was because the dollar was dropping and so you know the unemployment rate was also dropping here the dollar hasn't really dropped yet but if the dollar is going to drop then the way it's going to drop would be likely be the the labor market starts to loosen up therefore the long and yield curve is not as concerned about inflation returning it's more so somewhere in between right like there's the risk of inflation returning there's also the risk of the labor market loosening up too much so then I would say this I would say if the unemployment rate is less than 4. 2% or equal to it I think even if it's 4. 2 it's fine right 4.

2 is probably fine equal to or less than 42 probably a good thing for Bitcoin in the short term if it's at 4. 3 then I'm I would guess I don't know I would guess that Bitcoin might shop until February and it could involve still sweeping that high and sweeping that low just like it did last year right where it was it it went up and then it came back down if it's greater than 4. 3 like if it comes in at 4.

4 it would likely spook the market okay in that case you would probably get a correction now a correction by Bitcoin can mean a lot of different things but remember Bitcoin had a correction in January 2017 and it had a correction in January of 2021 so it wouldn't even be that different from what we normally see right I mean Bitcoin that's been a common thing for Bitcoin would be to get a correction in January the post postt year but I think the reason why it's not as obvious this time is because those January Corrections that occurred happened after really strong Bitcoin rallies in December but this December we didn't really have a Bitcoin rally right we we we had one in November but then it kind of stoed out in December and so it's a I mean it's a little bit different than what we saw in Prior Market Cycles in fact if you go look at the cycle Roi like if you just look at at at Roi from the from the bottom in 2022 and you compare it to Prior Cycles especially if you compare it to the 2016 cycle you can see that Bitcoin is tracking the last or two cycles ago fairly well you can also see that there was a correction um you know in in a couple of weeks right I we're currently on day 778 there was you know there was a correction really starting day 781 um but it didn't it wasn't really obvious until maybe day 794 right where Bitcoin dropped a little bit lower than these lows over here before then picking back up and if you compare it to this last cycle you can actually see that the current correction that Bitcoin has been in since December lines up really well with the correction it had four years ago so there is one train of thought that would suggest well what if bitcoin's January post havinge correction just got you know was front run in December because everyone was sort of more aware that it was coming and now instead you're sitting right here rather than you know at the start of a of a correction um just something to consider the other thing that I I want to remind people of is again no one has a crystal ball and I don't know I mean I think I think a lot of it is just like if then statements right like if the unemployment rate comes in low it's probably good for Bitcoin it comes in 4. 3 I would guess bitcoin's going to chop around might sweep the high and sweep the low probably chop around till February if it's higher than 4. 3 then you probably get a correction in the market um that's the best way I can think about this right now like I I think that's what and I and I would argue that the reasoning for all this just lies in what we saw happen last year right when Bitcoin was dropping the unemployment rate was going up when Bitcoin was going up the unemployment rate was not going up every single month so you kind of got a glimpse like right here as to what Bitcoin does when the unemployment rate goes up and then here you get a glimp glimpse of what Bitcoin does when the unemployment rate is either going down or trending sideways proving again that the market does not need a reason to go up it needs a reason to go down the market just naturally goes up because that's what the market does the other thing that is somewhat dubious right I've mentioned it a couple of times I don't want to sort of overextend its welcome uh the sort of this part of the analysis on this channel because I don't really think it's going to play out the exact same way obviously every cycle is somewhat different um so I'll just briefly mention it and then we probably won't talk about it again for you know if ever uh maybe we talk about it again if it actually plays out but the the one thing I would remind people of is that in 1999 the QQQ ETF launched right here in March and it rallied from around 48 to 120 and that Rally from 48 to 120 took about 54 weeks 48 to 120 what's really interesting we've mentioned this if you look at bitcoin's ETF it launched at around 48k now there are some nuances to it right it's a little bit different I'll explain those in a second but if you look at the launch of the spot ETF for Bitcoin um it Wicked up to 48k instead of down to it like it did with the QQQ but interestingly enough 48 weeks later sorry 54 weeks later is January 20th inauguration day which is interesting because 54 weeks after this launch of the QQQ it was exactly you know it was it was 54 weeks later the QQQ went from like 48 to 120 now look at this if you go to bitcoin on the daily time frame and you connect this out you connect these highs here and you just extend that out what's fascinating is if you grab the uh sort of a price label and you go over to January 20th and go up to this trend line it would put you at 120k which is exactly basic what the QQQ did right I mean it went from 48 to 120 54 weeks later and so I just wonder I'm like I mean obviously this is very dubious um and obviously we know that QQQ got a large drop after that right I mean it it had a massive drop and it doesn't really seem prudent to call for something like that right because you know if you if you spend a lot of time calling for that stuff I mean it usually just doesn't happen right those those sorts of things don't don't happen the crashes happen when no one's calling for that stuff so I don't think it makes sense to sit here and say that that's the base case but what I would be interested in is if Bitcoin finds itself at 120k at some point in a few weeks what is the reaction there right and and one potential outcome you know and again basically what happened with the QQQ is after it hit 120 it had a large drop down to 63 which is a pretty big drop and I mean just to give you an idea like where 63 would be on this chart like how much lower that I mean that's way down here and I'm trying to think like when that occurred it occurred the the next month right so was it was actually it occurred one month later so that'd be uh February not January right um so it'd be somewhere over here so 63 be right here which the now that I'm looking at it right the reason why that's kind of interesting is if you take these lower highs kind of lines up right kind of lines up right there but for me the reason why I I don't really think it makes sense to sort of view this as necessarily the most likely outcome is because it's probably not going to repeat itself exactly what I would say is this keep this scenario in the back of your mind if on inauguration day bitcoin's at 120k and it just seems like it can't possibly get better right and then everyone's like well hell is are we going to actually get the Reserve then you might get a correction but there's also an idea that you do get a correction but it doesn't actually take you all the way back down here right like it could just do what it did last year where it sweeps the high and then sweeps the low right so like it does that where it comes up here sweeps the high and then comes down here sweeps this low and everyone thinks it's going to go back down here but then it doesn't and then it just kind of and I I think one of the things to consider is the way that it could do that the way that that it could get a correction off of 120 if it can make it there would be if say the February unemployment rate comes in bad right because if you think about it the January report is going to be for December of last year but the February report will be for January of 2025 which will be the first labor market release of 2025 and that's when you get sort of the change in administrations going from you know sort of 2024 to 2025 so I would certainly keep that outcome in mind doesn't have to happen but keep it in mind right keep it in mind if you see something like this happen where it it is if if the unemployment rate comes in hot Friday then you might not get that scenario at all in fact maybe it would just kind of continue to chop around here for another month kind of like it did last year so obviously this is a lot of of of dubious speculation and you know I certainly don't know what the market is going to do I just want to outline these you know these different outcomes just so you can kind of think about how this might play out um and again I mean there's there's other things to consider as well and that's like you know don't compare Bitcoin to things that happened 25 years ago just compare it to to what it's doing this cycle and one of the things to note is that you know the the the main areas of weakness for for Bitcoin this cycle have just been in Q3 of each year right this is where the weekly RSI came down here Q3 of 2023 Q3 2024 so perhaps the next main weakness sustained weakness that'll last for a few months might not be until Q3 of 2025 but that's still you know 6 months from now right that's half a year away um so yeah those are my thoughts right again it's pure dubious speculation and as a reminder I don't know what's going to happen um I don't use this stuff to trade right I mean I stick to the risk levels because I think that's what is going to help me the most when you take the emotion out of it when you take your opinion about what's going to happen out of it and you take all the fear and the fomo and everything where you take all that stuff out of it leave it at the door leave the crazy price predictions to other people right and there there's nothing wrong with it but it's just let's say leave it at the door have a plan and stick to it no matter what and by the way I mean you know as I've said before it it it you know over the long over the Long Haul being longer term bullish is better than being bearish right over the long ha because the markets generally Trend up you can occasionally get you know things that happen in the market that no one's expecting like March 2020 right so you have to be prepared for those and even like you know July 2015 right you have to be prepared for those events I would say right now I would say the biggest risk for Bitcoin is is just like you know if the stock market gets a correction that's probably the biggest risk for Bitcoin right now and the only reason I say that is if you look at like the S&P divided by M2 it still hasn't been able to take out this high from 1998 where the S&P got a 20% drop um you know so that would proba be the biggest risk to bitcoin is just that the S&P gets a you know like a 20% drop or something kind of like it got at the same level in 1998 which by the way this drop back in 1998 occurred and then the FED cut rates from 5 and a half to 4.

75% now the fed's already cut rates from 5 a half to 4.