Crypto Bull Market Just Starting? Or Will We See New Lows?
So the question is: are we about to see cryptocurrency launch into its biggest move yet and see the stock market continue to chug forward, or are the financial markets ready for a re test with additional crypto bans on chain data resembling 2018 and concerns over debt? In the u.s and chinese economy, so today in this video ill be laying out my fundamental and technical research to break down both scenarios. As objectively as i can – and i know we usually do a lot more on the technical side. But today, im going to be diving more into the fundamentals behind. Why im thinking these in the on chain data thats supporting all of this evidence and theres some crazy stuff on there. That, i think, is super important for you guys to know and thats. Why i want to talk about it in this video today? So if that sounds interesting, make sure you hit the like button on this video so that youtube recommends us so that more people can find out and make educated decisions on this. Also, if youre new to my channel, i make content all about day trading, crypto, investing personal finance, if you like those things, make sure you hit the subscribe button turn on all bell notifications. So you know when i put videos out but now lets break down. Some of this evidence that im talking about so right now we could be at the beginning of the biggest move in the crypto cycle so far, or it could be right at that point, where cryptos about to sell off in going to dormancy, similar to what we Saw in 2017, 2018 after the bull run.
Okay, there are several external factors that are going to come into play outside the realm of crypto adoption in the technology behind crypto itself. Okay, we obviously all love and believe in crypto if you are a crypto bull but theres things out of that control and out of the realm of the crypto space that are going to end up affecting the market that we have to take into consideration and thats. What were going to be taking a look at first thing that i want to show you guys is to compare bitcoins crash chart from 2017 2018 to what we just saw in this current bitcoin move okay, so this is a chart on the left. 2017. 2018 bitcoin move, and this is the current bitcoin move that were in right now. First thing: thats worth noting thats sort of weird, in my opinion, is from this low over here to the exact high was a 564 percent gain and if we go over to this little low right here before this massive explosion in the top of bitcoin, its exactly 564 gain, which i thought was just a little bit weird right off the bat, so that got me thinking like are there other similarities that we need to look at and what are the differences that are going to lead us in a different direction? Okay, so just bear with me here. I know its gon na be a lot of information, but if you have the time just stick through this, so you can actually hear out what i have to say, because i put a good amount of time into researching this.
Video for you guys so then we got that initial sell off from this high down to this low right here, which was a negative about 50 drop from this high down to our initial drop right here on the most recent bitcoin move was negative 54, so pretty Close to similar on that regard from this low back up to this retested high right here we saw a 66 gain and then over here we saw an 81 gain so a little bit more acceleration to the upside on this most recent move. But the thing we have to look at is if we are going to be resembling this previous move. The way it sort of has up to this point from this retest down to the low before it started to stabilize and sort of just slowly sell off and go into dormancy. That was a negative 67. So if we see that from this point – and we see bitcoin start to move lower thats going to be putting bitcoin below 20 000 into that 17 to 15, 000 range purely based off of the move that weve seen in sort of the mass human psychology behind It now, if we are to look at something slightly more optimistic on the other side of the table, we can look at bitcoin in the sense of human, psychological impulse and corrective waves is, which is what we do with elliott waves. When were trading in our internal community, but we could be in the beginning of the one to two to three move in an elliott wave.
And if we are at the beginning of the three move down here – and this is going to be the three move based on what were doing when were actively trading cryptocurrencies on shorter time frequencies, the top of the third or fifth wave should be projected right at This 10 000 level by this 161.8, multiple, which is just weird that thats lining up perfectly to that hundred thousand dollar psychological level and because elliott wave is fractal. We can zoom in on our current move right here and we can see that we have a one to two to three four and then five, and if we use our fibonacci projection tool, inverted on this abc wave. We should see a move down on bitcoin to this 38 000 level, which is also the site, the 61.8 level on the overall fibonacci retracement. And if these concepts are interesting to you, we use these in our internal trading team to actively trade cryptocurrencies to generate regular profit ill put a link to that below in the card on the screen right here. But this is leading me to believe that we should get one more drop in bitcoin down to the 61.8 level, and this could be the low before we see this two wave absolutely take off, which could lead the bitcoin price over a hundred thousand. And if we refer back to our stock to flow model over here, which is showing us the value of bitcoin based on scarcity at this current point in time, bitcoins scarcity value is around 105 000.
So that would make sense that we are to see a mag up to 100 000 relatively soon. If we are to see the stock to flow model continue to move the same way. It has been based on the previous price action of bitcoin weve, seen early slightly before halfway through having cycles that bitcoin tends to launch off of its true value and be worth more than what its actually valued, based on scarcity. Weve. Seen that over here, a spike over here spike over here, a spike over here now were sort of in that range where the model is either going to be broken, but if it does hold it the way its been holding it since inception, we should see a Mag up to this value and even through it, which could send bitcoin up well over 100 000 into the 200 000 valuation based on the stock to flow. So there is sort of conflicting evidence, thats leading us in weird directions, but we have to sort of unpackage. Some of the fundamental news thats going into the market and then look a little bit further onto a lot of the on chain data that we need to take a look at something thats been coming up in the news, a ton that is very, very relevant. Being that a lot of the crypto is traded from china, we have binance was one of the biggest exchanges that is chinese owned. China is now taking more seriously banning cryptocurrency theyre, saying that anyone facilitating trades is subject to legal prosecution, including those who work for offshore cryptocurrency exchanges, theyre, really cracking down on allowing people to even trade cryptocurrency, which could largely impact the adoption that we see and the Ability for crypto to continue to expand and thats a huge thing that we have to be taking into concern.
Another thing is the u.s stock market. If we see the stock market sell off, so we can look over here. This is during covid. We saw from march 3rd to march 23rd. We saw a negative 30 move in the dow jones industrial average. We can go over here to our bitcoin chart and see. At that same period of time, we saw a negative 62 move on the price of bitcoin, which is exactly double of what we saw in that same time. Period on the dow, so cryptocurrency is most likely going to sell off, based on what weve seen price action. Wise, if the stock market sells off and theres some decent amount of news that leading us to believe that the stock market could have a sell off, which would then affect the prices of crypto, whether or not that would affect it long term or it would lead People to invest more into the crypto market after that sell off is open to interpretation. The one interesting element about that that i do want to show is the number of transfers to exchanges. So if we look at how many people are depositing money into exchanges, the biggest influx in data that we saw took place on march 10th, which, if we look before that was an all time high for the previous year and then wasnt broken again until september. 1St of 2020, so we saw a huge spike in deposits to exchanges on march 11th.
And if we go over to the dow jones move on march 11 was really when we started to see a lot of the acceleration downwards in the stock market, which is leading us to believe that if we see a sell off in the stock market were going To see a lot of people running to crypto and potentially taking money out of the stock market and going into something that is going to fight inflation and fight governments controlling what currencies are valued as so, we might see an initial bad sell off and then money Flowing out of the stock market into the crypto market, which then could be good for the crypto market and theres a lot of talks right now about the national debt and inflation in the u.s economy, which could then lead to a stock market crash. Okay were talking about the debt ceiling currently right now, if its not raised were going to be in huge danger and even if the debt limits are to be raised quickly and, in my opinion, based on any outcome that comes out of this theres going to be Some sort of speculation and disruption in the stock market and, in my opinion, were sort of already on thin ice and could be looking for a stock market reset. Okay, it wouldnt be a surprise to me to see a shock to the financial markets and a loss of business and household confidence in the overall financial markets.
But on the brighter side of things, we are seeing a lot of institutional money now going back into bitcoin and were even seeing morgan stanley double its exposure to bitcoin through the grayscale shares. So we do see some institutional money thinking that right now is a good time to be accumulating. So this sort of mixed signals as to whats going on and as we dive into more on chain data, its going to be even crazier and even more polarizing theres, going to be people on both sides of this that are making valid points as to whether or Not we should see a cryptocurrency sell off or a massive boom to the upside, so lets break it down a little bit further. So if we take a look at the total transaction, count for bitcoin were right in this range right here of the bearish on chain activity, channel of what weve seen every time, weve seen, sort of dormancy and the markets quiet down in drop down. Okay, this is in 2016, then after we saw that hype in 2018. This was 2019 zone right here on activity on the number of transactions going through. Bitcoin were sitting right in this range right here again and were currently doing around 175 000 to 200 000 transactions per day, which was similar to what we saw in the 2018 bear market. Something to take into consideration, though, is the fact that a lot of exchanges are deploying transaction batching techniques, which is basically when they group transactions together to try to save space on the blockchain and improve the speed in which theyre doing transactions.
So a lot of this data can be misleading as far as the amount of transactions that are going through, because theyre using different protocols to try to eliminate all these transactions going through, which is slowing down the network. Okay, so it could be semi misleading, but i think there is some merit to that, whereas this is leading us more of an accumulation thought process. Okay, another interesting thing to consider is the entity net growth. This is showing us the amount of new coins that are being purchased. Okay. This is going to show us all of the floor prices or basically, the settle prices after theres new people becoming hodlers. When we see all of the new people speculating, this is sort of what remains. After once, all the hype sells off, and these are people that are holding we can see. These floors are constantly increasing and now were heading back to those levels where we saw the accumulation, and then we saw a massive push to the upside, so accumulation here massive push massive push here: accumulation massive massive push now were back at this level again. Another piece of evidence that is supporting the fact that we might be in an accumulation phase ready for bitcoin to absolutely take off is the short term holding supply, profit or loss. This is basically showing us the fact that the supply held by short term holders has reached an all time low of 20 of the circulating supply.
Okay, this is a rare occurrence that historically describes the late stages of accumulation right as were seeing smarter money enter the market right before an explosion, so its just very weird to see that were right at this level, where weve seen before this is the bottom of 2015 2016, before we saw the high of 2018 and then when we saw that pullback down all through 2019 and 2020. This was the floor. Of the short term. Holders were back at that level again leading us to believe that this is an accumulation zone where were about to see an absolute explosion in the price of bitcoin. We can also take a look at the exchange net, positive change. This is showing us deposits and withdrawals to exchanges. We can see right here, pre march 2020 exchange outflows was dominating and historically july and september has been a significant period of net outflow, ranging between 80k and 100k bitcoin per month. But despite the relatively low participation on in the on chain activity, a number of market fractals resembling bearish conditions, the remaining undertone is extreme huddling in the cumulative behavior, which is leading us to believe. This is a fairly unique market cycle and that we should keep an eye on this as far as a potential explosion to the upside on bitcoin. So, yes, theres. A lot of evidence on both sides leading us to believe that we could be entering a bear market, or we could also be at that critical point before we see an explosion in a continuation of the cycle.
Theres gon na be a lot of things that come into play as far as external factors that can influence the price. But i think the smartest avenue of approach is to just continue holding the long term cryptocurrency that you have dont, try to sell out and time the bottoms of markets, because its just more risky to try to pull out in time. Because if we see a massive increase in price, you might never retrace down to those levels and getting a good aggregate cost is going to allow you to grow wealth, especially as bitcoin potentially in the future begins to move exponentially. As far as shorter term plays are concerned, if we do see bitcoin drop down to this 61.8 level, im gon na be dip buying one more time and if we do see some momentum off of this im gon na be entering a lot of altcoin positions. So there should be a good amount of opportunity for us to take trade on these smaller projects and if we do see, bitcoin break all time highs, theres going to be a ton of opportunity and its going to be a great time to get into some smaller Projects with small allocations now so im going to be making some videos in the future of some good opportunities for us to get in on these smaller projects. So we can take advantage of this move in either direction if the market continues to sell off.
Yes, a lot of these smaller projects will go away, but overall, as long as were holding predominantly bitcoin ethereum cardano in binance coin are major pairs. The losses from investing small portions of our portfolio into altcoins is going to be out balanced by the dominant holdings. In our major pairs, and if you want to take a look at some of the trades that i take on a regular basis, i have a telegram group where i alert where i enter. Where i put my stop loss in where i put my profit target on a lot of these cryptocurrency trades, so if youre interested in getting your toes wet with that ill, put the link to that in the description as well as a ton of other resources, you Can go ahead and check out and for those of you that are still here with me, i was referencing a newsletter where we put together all of the research information that we use into one place. So if youre interested in that, i will have that linked below this video as well. So you can go ahead and check that out and get those emailed directly to you. If youre still here with me, make sure you hit the like button on this video and if you havent done so already make sure you hit the subscribe button, turn on all bell notifications.