Hey everyone! Today, I’m going to be talking
to veteran trader, Peter Brandt, and Youtuber/Streamer/Trader,
Erik Crown, about the mercurial, ever-elusive
Bitcoin market. As you predicted, Erik, we
saw Bitcoin make a sizeable move last week,
which, unfortunately, was not in the direction
that we had hoped. You predicted that if we
were to see a downward move such as this,
Bitcoin could end up somewhere in the 6-7k
range. Do you still stand by that prediction?
And, Peter, what do you make of Erik’s assessment
of the current trend of the market?
Yep, so I do still stand by that. As long
as Bitcoin is below about $9,100, I do remain
bearish and I do believe that we have another
leg to go probably back down to the $7,000
level, give or take a couple hundred bucks.
That does seem to be where a lot of things,
a lot of technicals are lined up with. I can
bring up my screenshare right now. So overall,
Bitcoin does look to play off of this monthly,
21 exponential moving average. From historical
standpoints, this yellow guy right here, we
do see that that's kind of the general kind
of phase etc, I suppose you could say, for
generally bullish or generally bearish when
we're below generally bearish, when we're
above it, generally bullish. And as you can
see right now, even with all this downside
volatility, Bitcoin still is not even tested.
It is currently hanging around the $7,000
mark right here. While that does look pretty
nice and does look pretty beautiful, it does
suggest that we really do have a little bit
more downside here to go, based off of what
we're looking at, of course, on the daily
volatility metrics as well, we do see volatility
is expanding once again after getting down
to a piece four level, a level that we haven't
seen since really May of this current year
before this massive explosion from the $5,000
base to basically 2x over the next week and
a half, two weeks.
So, you know, Bitcoin is bouncing right now
and it's kind of held below all these major
moving averages. It looks like we're kind
of wedged between the 200 simple. And in the
blue, three seventh exponential average right
here. So, we're looking to play out a little
bit of a bounce, maybe trade sideways for
a bit of time in this range between about
$8,750 and kind of our base at around $8,000
low, I suppose. And things, you know, as long
as we're below $8,750, I do believe that this
is kind of shaping up to be redistribution.
How, you know, how long does that take? Nobody
knows. But as long as you know, my key points
here is that, yes, I do kind of stick with
that as long as we remain below $8,750, that's
kind of my pivot for immediately being bearish.
And then if we get back above $9,100, that
would be kind of my full bull.
You know, no more bearish or anything like
that. That's basically just that's mostly
based off of the weekly 21 exponential moving
average, which I kind of just get rid of everything
here. I apologize for going a little bit more
longer than I probably should have. But this
yellow moving average has been a pretty damn
good, you know, decider once again of sort
of which sort of phase that we're in. And
when Bitcoin is in a generally bullish market
loves to play off it on its bullish dumps,
if you want to call it that. And in a bearish
market, likes to kind of use it as its resistance
point. And right now it's currently coming
in right around that $9,100ish level. And
I'd have to say that as long as you're below
there, I have a very hard time being, you
know, like immediately bullish, so to speak,
I'd love for Bitcoin to go back above there.
And now it's only changed my mind, and we
could get back to talking about bullish type
of things. But as long as you're below there,
I do believe that it's a lot more like that.
We do hit that next target down towards about
7,000 bucks.
What do you make of all that, Peter?
Well, hey, hey.
I'm impressed that a young guy uses moving
averages to begin with, I think that's awesome.
I thought just us old guys use moving averages,
but moving averages are great. Great default
proxy for a trend. So the question is, what's
your time length? Everybody has different
time lengths and different time lengths, produce
different things, you know, time scales are
important. You know, whether you're looking
at weekly or daily moving averages, you can
oftentimes get different opinions based on
the timeframes you're using. But I think there's
another thing and that is Bitcoin is going
to do what bitcoins is going to do. And it
does matter. It doesn't matter what I think.
More often than not, we don't think it will
do or at least do it not in a way that we
think it's going to do it. But, you know,
I look and, you know, people who follow me
know that I'm extremely long term constructive
on Bitcoin, but I think we've got some problems
here. You know, that decline that we saw on
September 24th was significant for me. I'm
a chartist, I look at charts. I have to follow
what the charts tell me, particularly look
at patterns. The chart patterns to me became
very, very negative. On September 24th, we
completed a descending triangle top.
We turned up on the ADX reading, which I follow
as a confirming indicator. We also expanded
and diverge the Bollinger Band. And normally
when those things happen, the mistake is trying
to jump in and pick a bottom too quickly rather
than let the market play itself out, try to
find proof that we're going to head back to
the upside. Right now, my default position
is Bitcoin will move lower. I do have targets,
they're lower than Erik's. I think Bitcoin
did go back $5,200-$5,300. I have a cluster
of targets depending on how I look at the
chart, determine those. But you know, $6,700-$6,800
down to $6,000, $5,300, but $5,300 is kind
of in the back of my mind where I think this
decline is going to take us. I think the big
surprise may be that this extended sideways
congestion lasts a lot longer. Everybody wants
to either be bull or bear in Bitcoin. Well,
how about just chop? We could chop ourselves
out for really perhaps the next six months.
And that's going to completely wear out the
bulls and that may be what we need to have
happened in order to really put an underpinning
in this market and headed back north.
What do you think about that, Erik? Do you
agree with that sort of like long term sideways
chop that Peter is talking about?
I mean, obviously, it's very possible, right.
And it'd be the thing that probably most people
don't want to happen the most, which means
that it's quite likely, you know. You know,
Peter, one hundred percent nailed it. And
most of the time people want to be full on
bull. They want to be full on bear. It's like
joining a gang in a sense, you know, it's
you only want that direction because it appeals
to, you know, whatever, it is in your ego,
I suppose. But at the end the day, a lot of
the times we're kind of just chopping trend
lists. And, you know, while I do think that
lower targets than $7,000 are certainly very
likely myself as a trader, I take things one
step at a time. And I do feel like there is
a potential, you know, potential reversal
point or least structural, you know, support
built up around that $7,000 level, again,
give or take a couple hundred bucks. If that
bounce does get faded, if we see, you know,
some sort of divergence play, if we see just
something, you know, something signaling that
that is petering out, then the next, you know,
relevant level to the downside for me would
probably around the same area. I think you
know, I think obviously you have a lot of
support built up in like the mid fives.
And then after that, we see a lot of this
market coming down to the monthly 55 exponential
moving average, which were big wins all the
way down in the like mid to high $4,000s.
A lot of alts are already there. You know,
is that foreshadowing a move in Bitcoin? You
know, it's which comes first, the chicken
or the egg, right. And unfortunately, most
of these markets move together. And I would
say that's all it's looking extra parasites,
I suppose you could say. Does bode a little
bit on the worst side for Bitcoin overall.
So I do think it's very possible, but again,
myself as a trader, I take every major level
as a potential, you know, definitely, you
know, a very, very likely bounce place and
a potential reversal, you know, potential
reversal pivot as well. But, you know, that
needs to be accompanied by getting back above
a certain level that changes the structure.
So for right now, that certain level still
would be about $9,100. If we got down to that
$7,000 level, we maybe got back above perhaps
it's kind of hard to call it right now, but
I'd imagine someone like the mid to high $8,000s
that would probably do it for me. But again,
just kind of has to be taken once upon a time
from my perspective.
So, Peter, you tweeted last week that the
hardest part of trading is not what to do
when the world gets turned upside, such as
now in Bitcoin. The hardest part is making
the tough decisions in advance so that one
is not forced to act in haste when things
become crazy. Exactly what kinds of decisions
are you guys making to prepare for events
like this most recent market drop?
Yeah, I mean, I think that was really a reference
to what I sense, maybe correctly, maybe incorrectly
from social media. We've got a whole world
of formal traders out there. There are people
that really don't go into the day deciding,
here's what I'm going to do here and the conditions
upon what I'm going to do, how I'm going to
act here. How am I going to preposition for
tomorrow? How am I going to preposition for
next week? For next month? I mean, what basis
do I make decisions? And that is my observation
of an awful lot of participants in this market.
They're flying by the seat of their pants.
They're responding to quick movements in the
market, and that is idiotic. I mean, for me,
the preparation was in making the determination
during this congestion area that we had is
that I wanted to reduce my holdings of Bitcoin
extensively. I didn't wait for a big drop.
I mean, I had been basically long Bitcoin,
by the way, I'm not a day trader, but I'm
also not a holder, and I refuse to use the
HODL world. But, you know, I'm a strategic
holder. And that means that I want to sidestep
what I think are extended periods of uncertainty
or the possibility of extended declines. And
so I think the hard decision was to exit Bitcoin
during that congestion area and favorable
prices and being willing to prepare yourself
for a big decline. Rather than waiting for
a sharp down day where Bitcoin is down 10%,
15% and then deciding that perhaps you need
to do something with Bitcoin. So really, that
was my reference for that tweet.
Erik, how do you prepare for events like these
since you sort of predicted this movement
coming?
Yes, so my trigger as a trader, when I kind
of switched from being more bullish to more
bearish was when Bitcoin lost that critical
$10,300 level that we spoke about a month
ago, that was a big deal for me. And it's
kind of picking back on what Peter said there.
You know, my mentor used to always tell me,
it's a little bit crass, but please stick
with it. And he'd say, you know, the market
will f%ck you whenever it wants. And of course,
when you fail to plan, then you have nothing
to go off of when you get in those more emotional
situations, as Peter was kind of referring
to, you're usually going to make the wrong
decision. So in those situations, you know,
I've found that, you know, when I don't have
a plan going into a major trade like that
usually goes extremely, extremely poorly.
So I've been you know, I completely agree
with that. And overall, you know, Bitcoin
breaking that major level, that's kind of
where I did change my mind on it. And unfortunately,
you know, it always feels bad, especially
after writing a nice move to the upside, it
always feels bad, you know, kind of getting
out of that position. But at the end of the
day, trends are changing, and that's your
job as a trader to recognize when that change
behavior has actually happened.
Yeah, Erik, you just said something that's
so interesting. Sometimes, you know, we exit
a position even though it's the right thing
to do, it feels like an old friend died.
Yeah, we get attached, we get attached. It's
a human condition, we get attached, whether
we like it or not.
So are we in a bear market right now? And
if so, how are we supposed to survive this
one?
Go ahead, you go first.
Okay, fair enough. So are we in a bear market
right now? Well, I don't necessarily think
that's, you know, going up 350% constitutes
a bear market. We did have a reversal, and
I do believe that we're going to be downtrending
for a little bit of time. But the way that
I look at a bear market is, you know, a prolonged
downtrend over the course of, in cryptocurrency
language, about six months to a year. In traditional
world, you know, perhaps multiple years and,
you know, in some senses. So what I say that,
you know, is Bitcoin in a bear market right
now? I would not define it as such until we
actually break major structural areas below
about $4,500. That's where I become a long
term bear talking about like actual long term
trending to the downside, meaning that we
just set in a major lower high at this $14,000
level and we're going to be sitting in lower
lows along the way as well.
Yeah, I would jump in here and just again
make my comments relative to what I see from
the technicals. And if you look at a weekly
chart of Bitcoin and you define an uptrend
as a series of higher highs and higher lows,
well, we're in an uptrend. The long term trend
in Bitcoin is definitely up, but I use a proxy
for a trend and that's an 18 week moving average.
And, you know, everybody has a different number
that they use for that moving average. And
I think the importance of one is consistent
in one trades accordingly. But for me, the
market is just hanging on. And should we go
lower or sideways here for another couple
weeks? My 18 week moving average is open to
the downside, and that will then result in
me declaring Bitcoin as in a bear market,
at least in that timeframe.
So building off of that, over the weekend,
Tommy Lee tweeted that excluding the 10 best
days of the year, Bitcoin is down 25% on the
year. He followed this by asking: are you
that good at trading? And adding that he believes
Bitcoin is weak in trendless macro. What does
he mean by Bitcoin being weak in trendless
macro? And what do you think about his observation
of the Bitcoin market? Do you think that holding
or as you didn't say earlier, hodling, is
a better strategy than trading, as his comments
seem to imply?
I'm an old guy. I mean, by the time Bitcoin
becomes what everybody thinks it's gonna be,
I'm all gone. And so, you know, I'm a swing
trader and so, you know, I'm not going to
be married to any trade. I traded now for
more than 25 years. And I think some sort
of absolute view of a market, of any market
at any time for any reason is wrong. I mean,
I've approached for Bitcoin market is the
fact that there's a 50% chance it goes through
a $100,000 or you name the price, and a 50%
chance it goes zero. And so, you know, I want
to be positioned accordingly in case it goes
up. But I don't want to be married to Bitcoin
and have it go to zero because I think that
still is a possibility. I'm not going to get
into the reasons why. I think it's beyond
the scope of what we're doing here. And so
I disagree, I disagree, I think there is a
time to own Bitcoin and not be a day trader
with the idea that you're going to stay with
it. I don't personally like to stay with a
position that's going against me.
Yeah, 100%. I 100% agree with that, really,
because at the end of the day, you know, when
he says, are you really, you know, are you
really that good at trading Bitcoin? Well,
it's a great time to be a hodler in an upwards
market. It's never a good time to be hodler
in a downwards market, because Bitcoin loves
to play out. You know, 80%, 90% retracements
on average. And so when we're looking at just
something as simple as perhaps just the weekly
trend, just looking at higher highs and higher
lows and lower lows and lower highs, just
judging that, I mean, that could just be even
on a very basic way of doing it, but it works,
you know, and even just doing something very,
very simple like that would offer better results
than just blindly buying at any hour of the
day. I would imagine that most people blindly
buying during 2018 not so happy with a statement
like that. Longer term perhaps, which again
brings up that conversation of it really comes
back to your perspective, right. Myself as
a day trader, well, I do care, you know, it
does matter to me. And of course, that's the
way I'm gonna trade. That's the way that I
make my living. But I imagine that, you know,
a lot of people out there, this is maybe more
like a hobby or perhaps they're more of an
investor like long term. And it's going to
completely change that perspective. So, you
know, would it be the worst thing to do? I
mean, maybe not. You know, I mean, all the
people who bought in, what is it, 2014, 2015
during that bear market? They're quite happy
right now as well. Assuming that they did
hold through it. But at the end of the day
it comes down to your personal perspective
and you know, I'd say for myself, I disagree.
Maybe for someone else, it could be true,
yeah.
This next question is for the viewers, straightforward
and blunt. Is Bitcoin going to $100K or is
it going to zero?
Flip on coin.
Yeah, it's the all or nothing proposition,
right? At the end of the day, I'm a believer
in Bitcoin, regardless of whether I'm bearish
or bullish right now. I do believe in it long
term. I think that I have a strong personal
belief that anything that gives people more
autonomous control over their lives, such
as finances for one, is, you know, mostly
a good thing. And probably going to get picked
up by the by the mainstream is just a matter
of time. We do see all of the traditional
venues starting to build up infrastructure,
we see CME is not only offering futures, but
now talking about options, which I'm elated
about, because that's where I come from. And
then, of course, we also see, you know, ETFs
being talked about. Bakkt just went live.
So these institutions, and I'm sure Peter
would agree with this, being a trader himself,
these institutions, they're not wasting their
time just putting up all this stuff. They're
not trying to, you know, just go through the
rigmarole for it, you know, for the sake of
it. It means that they likely see that there's
at least something there. And I do believe
that adds on to the validity of this space
as a whole. And I would, you know, if I had
to give an answer - $100,000. Do I know when
that's going to happen? Hell, no. You know,
we could be talking in 5, 10, 20 years out.
I think a lot of people are maybe a little
bit more on too much on the optimistic side
for the bulls. Then again, you know, it doesn't
go to zero. Well, this is still an experiment,
right? We don't know, I mean, you know, there's
legitimate concerns with that technology,
absolutely. I mean, what happens if quantum
computing becomes a legitimate thing? You
know, what if it becomes a widespread thing,
well, that would be an issue. You know, it's
that kind of makes the network a little bit
less secure. So there certainly are still
roadblocks in the way. But, you know, as a
Bitcoin believer, I suppose I'd say a $100,000.
Are you still 50/50, Peter? Are there like
certain factors you're considering or...?
But you have to quantify that. Because, yes,
it's 50/50, but you have to look at risk reward.
I mean, Bitcoin at $8,000 is a lot closer
to zero than it is to $100,000. For me, what
that means is this is a highly asymmetrical
trade. I love asymmetrical trades. Give me
asymmetrical trades. I've made my living on
asymmetrical trades. And so with an upside
potential $92,000 and the downside potential
of $8,000, if I can with basic really simple
technical tools such as a moving average,
Wow, it's a no brainer that I'm going to be
biased toward the long side. I'm biased towards
$100,000 simply because it's a fabulous risk
reward trade.
So right now, are you guys, given that Bitcoin
is kind of like unsteady right now, are you
guys allocating more of your portfolios into
altcoins or...? Where are you putting your
portfolios right now?
Fiat, baby, fiat.
Yeah, I'm holding the dollar shitcoin right
now, unfortunately. My altcoin portfolio is
the exact same, whether it's a bull or bear
market for Bitcoin. It is zero and will unlikely
ever change.
I think that's right on. I mean, for me, Bitcoin
is crypto, crypto with Bitcoin. If Bitcoin
is not going to be a magnificent long term
play, these altcoins and other macro caps
are worthless. And so, yeah, my interest is
in Bitcoin, Bitcoin alone. I look at these
altcoins, I think they're a big distraction.
Yeah, agreed. Now, don't get me wrong, though,
I do think you'd be a little bit naive to
believe that every single altcoin is just,
you know, completely worthless. We have thousands
of these guys, but at the other day, you know,
maybe a handful are going to be successful,
but it's really going to likely come off the
back of Bitcoin to begin with. Anyways, Bitcoin
is like the frontier in a sense. You know,
it has the most history going on right now.
And if the Bitcoin doesn't succeed, it would
greatly diminish the case for anything else,
I'd imagine.
Thank you, everyone, for watching. This has
been your host, Jackson, with veteran trader
Peter Brandt and YouTuber/Streamer/Trader
Erik Crown. Hope you enjoyed the show, and
as always, remember to like, subscribe and
hodl.
Hey, I'm serious when I said it. It's rare,
you get all of these, I call them crypto maniacs,
they reinvented technical analysis in a way.
The fathers of the technical analysis are
rolling in their grave. They're just making
up the rules as they go, it's crazy. I look
at the charts on Twitter and I go, whoa, this
is a math is the old one. It's more of what
you know, what it says or exponential moving
average man.
I mean, they're so useful. The basic stuff
is really where it's at.
That's the thing, I started out being a market
maker on the floor of New York Stock Exchange
Arca, so my mentor down there who had been
doing this for about 35 years at the time,
he was all about EMAs and moving averages,
so that's kind of how I learned from that.
And, you know, and you said it perfectly,
I mean, there's some very simple strategies
that require a lot of patience, but they work.
