Bitcoin Holds Slightly Above the May High transcript

Hey everyone and thanks for jumping back into the cryptoverse. Today we're going to talk about Bitcoin and how it is sitting still just above the May high. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and make sure to check out the upcoming ITC conference. Uh main conference day will be November 21st in Miami. Let's go ahead and jump in. Bitcoin is currently trading at around 83K.

And what's interesting is is, you know, the May high is right around 82.8. And if you're joining, right, if you're new and you've never watched this channel before, it would probably behoove you to know before watching the video that I was not expecting the move above the May high. So, as much as we all have our egos and want to pretend like we're always right, this is one of those times where I was not and Bitcoin took out the May high.

And not only did it take out the May high, but it also closed above the May high. Now, that doesn't necessarily, you know, mean that there's never any downside anymore or anything like that, but what it does mean is that the burden of proof is now more on the bears than the bulls. You could have argued for the last nine months, the burden of proof was on the bulls to kind of prove like, well, why why is this rally any different than all the other rallies? because all the other rallies were just simply rallies to lower highs.

And if this had been a lower high, again, the burden of proof would have stayed with the bulls. But with it being a higher high and with a weekly close above the high, the burden of proof has shifted. So what's difficult right is when you are academically on the wrong side of of what actually happens we have to remind ourselves there is actually a difference between being right and making money. And that's probably something you've heard me say a number of times over the years.

I would rather be poor and wrong. Did I say that right? No. I'd rather be rich and wrong than poor and right. Um hopefully I'm not poor and wrong, right? But I'd rather be rich and wrong than poor and right. And so there's actually a big difference between being right and making money. And this is one of those times where the DCA strategy has worked fine for those who have DCAD in the second half of the midterm year, right? which is what I have said and I've communicated is the correct strategy in my opinion.

Now, if things were to change, then I could always theoretically change those views in the future. But that those have been the views. And so, while technically the views I've expressed um as to the nature of this rally, it's extended beyond what I thought, I at least can console myself with the small amount of Bitcoin I was able to get at those lows. And so I think at this point what you have to ask yourself is when you come to a point as an investor where you are wrong about something how do you navigate that?

Because as investors we all will face that challenge at some point or another. Whether you're facing it now with Bitcoin whether you faced it with another asset in the past or you'll face it with an asset in the future. How do you navigate that? And I think that's why it's so critical to have an investing plan no matter what. Let me give you an example for the S&P 500. I buy low expense ratio index funds every single month no matter what.

And I've been doing it for years and years and years. And sometimes in the month I will get a little fancy and try to time it like if I think a correction is coming. But I have very mixed results with that. Sometimes I try to time it. Like I normally just buy the beginning of the month. Um but sometimes if I think a correction's about to start, I will wait until the end of the month. And sometimes I feel like a genius and I'm like, "Oh, I'm glad I waited." And then other times I wish I hadn't waited.

And so over the years, what I found myself doing more and more was just buying, you know, earlier in the month rather than later in the month because the gains that I made by sometimes being right were offset by sort of missing out on gains when I waited to buy when I was wrong. And so I just found it easier not to spend that much time thinking about it. So with the S&P, you probably find I don't really talk about the S&P 500 that much on this channel.

And the reason is because my strategy with the S&P is to just mindlessly DCA it every month of my life, right? Like that's what I do. And I recognize as an investor that I will be open to occasional draw downs in the future. And I talk about those draw downs with you guys, but I don't ever go out and sell typically based on that. if I sell index funds, it's because I'm selling for another reason, not because um I'm that convinced that the market is is is going to go down.

So, with Bitcoin, I I think the point that I'm trying to communicate is like what is your strategy? Like, do you have a strategy? Have you DCA in the second half of the mid midterm year? Have you not? If Bitcoin were to go up, what would you do? If Bitcoin were to drop back down, what would you do? like would you buy or would you know you get in the boat of oh it's going to go so much lower and not I mean the the the question is is how do you navigate it from here and I think a lot of people kind of need to think about that going into the fourth quarter because on one hand if Bitcoin after here accepting above the May high if it continues to accept above it and slowly trends up I think you should have a plan for what you're going to do rather than just kind of sit sit around and and you know wish certain things.

But on the other hand, if we accept back below the Mayhe and just when it things just when it seems like this thing is going, something happens out of left field and and we're right back below it. I would have a plan for that too because what I have noticed before and I I've noticed this actually in 2018 and 2022. So, in 2018, I did not think we would have a drop at the end of the year. In 2022, I did think we would have a drop at the end of the year.

And the reason I thought we would have a drop in 2022 was just simply because I saw that we had a drop in 2018 and because I saw that we had a drop in 2014, right? I based my assessment in 2022 on the fact that it also happened in the last two midterm years. Therefore, okay, there's a good chance it will happen again. And it did. But what I have noticed is that there are times when the Q4 drop plays out, but if you don't pivot, you can miss it, right?

And I I've said this before as well, and kind of one of the reasons why I've communicated that the DCA in the second half of the midterm year makes sense because imagine you were buying Bitcoin, right? like throughout the summer at at 18K, 19K, 20K. Did it really matter 2 3 years later if you didn't buy at 15? But if you didn't buy at 18 and 19K in the summer, did you get spooked during the FTX drop and not buy at all?

In which case, if you did not, and then you watch the market go right back up here, you would have been better off simply buying before the FTX draw. And and that's the point of that I'm trying to make is that if there is a drop into Q4, how do you navigate that? Because I've seen that happen so many times where like there is a drop. There is a drop that occurs, but then people don't actually take advantage of it because they're so convinced it's going to go lower.

Right? In 2018, I was buying Bitcoin at $6,000 and then when it dropped, I just bought more. But I'm sure there were people that weren't buying it at all, watched it drop, still didn't buy it, and then when it went up to 14K, wish they had bought it and wish they had bought it at 6K. But when you're living through the moment, it feels really hard. You know, it feels really hard. So, as we approach Q4, I I think it makes sense to try to think about what your plan is going to be because a lot of the a lot of the things with investing I find that are the most challenging are just not having a plan.

And you know, I I've talked to people that that try to navigate other markets as well. And what I have found like reduces stress the most is just kind of having a plan and sticking to it no matter what. And then like living your life, right? Like enjoying life because we only have a small amount of time in this world and we want to enjoy it and we don't want to waste it watching a chart. So that's the argument I would make is to have a plan.

And a lot of times just having a plan can actually help reduce the anxiety as as to what's happening. Um, and I found that works for me. Uh, I do I mean obviously I have had a little bit of anxiety, you know, with with this move here just because I I wasn't fully anticipating it and really because, you know, I didn't get as much as I would have liked at the lows. um admittedly, but at the same time, I mean, I hope people like recognize that I'm I'm just trying to be honest about, you know, my own path here and and what I'm doing.

I mean, I don't really, you know, have to share all this information, but I'm hoping that by watching me go through this, it can be helpful to someone else who might be going through it or might be going through something like this in the future if they're in an asset that's behaving in a very different way than what makes sense to them. So think about where Bitcoin is now and I would try to come up with a plan for Q4 and how you want to navigate it.

And if there is a drop, how do you navigate that? And if there's not, what do you do there? Usually, right, when you get a move above the 50W week, you know, if you go back and look at kind of the examples that we've had in 2019 when we got above it, you know, within about 2 weeks, we were about 40% above it. And if you look at 2023, when we got above the 50we moving average right here, within about two weeks, we were about 24% above it.

So far this time above the 50we we've gone about 10% 10% or so. We have not extended nearly as far as we normally do after getting through it. And perhaps there's a combin there's a reason for it. Uh I'm not saying it's not technically the similar to 2019 and 2023. But it could be due to the fact that it's happening in the midterm year might be the reason why it's not giving you as big of a gain. Perhaps it's because the long end of the old curve is going up and people are worried about what's going on in the Middle East.

Or perhaps these are all just narratives that don't really matter. Who knows? But as much as I want to have, you know, feel more confident about what comes in Q4, you know, Bitcoin is still sitting about what how much would it have to drop to get back to the May high, at least at the time of this video. Like not even 1%. You know, and I don't know like I don't know what's going to happen in the short term. Like I couldn't tell you.

I would say that if it if it gets back below the May high, then I think that would be considered bearish. I mean, some people might just say it's a bullish retest, right? Like kind of sweeping it and then continuing maybe back testing the 50we moving average. Um, but a lot of times when Bitcoin breaks through the 50we moving average, it's not really back testing it, right? Like in 2019 and 2023, we never really back tested it um until many many months later, right?

I mean, we we got through it in May of 2019. We didn't test the 50 week until until November of that same year. And in 2023, we got through the 50 week in March. We didn't test the 50 until August of 2024. So, you're talking about a year and a half later. The only time that we tested it shortly after getting back above it was in 2020 where we got above it in in January and then we were testing it in early March. So, what does that mean?

It means in my opinion that if Bitcoin were to test the 50we that would probably be more of a bearish shine than a bullish shine because it would be it would be acceptance back below the May high. Um but it would also be something that doesn't normally happen when we are truly back in a bull market. So, as long as Bitcoin continues to extend here and prove the bears wrong, then those are again more points in in the favor of the bulls.

And the burden of the proof, the burden of proof just simply remains with the bears. And again, as as I said at the beginning of the video, I'll say it at the end, too. This is coming from someone who did certainly lean bearish, right? I mean, I said I think there's a 65% chance that the low is not in back in, you know, back over here in August. So when we break a prior high like you know I I clearly have to humble myself and and you know go out see what I'm missing see what other views are try to try to figure out what it is that the market is is doing and you know sometimes taking a break can even be worthwhile right like just taking a break from it and and and you know coming up with the strategy is how I'm going to navigate it right sure but not thinking too hard about it.

And you know, I could I could spend all day talking about what might or might not happen. The reality is like I I clearly don't know in the short term because if I didn't know what was going to break the Mayhe high, how can I claim to know what's going to happen next? So that's kind of where I am right now. And and I I think it's more so about rather than trying to predict in the short term what's going to happen, trying to come up with a plan that you can have in Q4 to navigate no matter what happens, right?

So you like pencil down, all right, if it does this, I'm going to do that. And if it does this, I'm going to do that. And hopefully that gives, you know, hopefully that reduces anxiety and helps people uh to navigate the market. And I know this isn't the typical video that I make, but um I just wanted to put something out because we did get the the move above the May high. And we also have a monthly close coming up as well.

So, I'm sure that will be something worth watching as well. Uh the monthly close is coming up here in in just a few days. And you know, we're going into Q4. Q4 historically for Bitcoin in midterm years hasn't been the best. Um, but you know, these three these uh three green candles here have have certainly spiced up the conversation going into Q4 because what's interesting is that even if you did get a drop, let's say you got the FTX drop, right?

If you got the FTX drop where Bitcoin dropped, you know, like 26% into a a crisis or something, 26% from the high is not even a new low, right? You know, you would just be going back and and kind of testing where we already were like around in the low 60s. That wouldn't even get you below 60 if you were to have a collapse like FTX. So again, I I I think it it makes sense to be a little bit less deterministic and and to, you know, to kind of take a step back and and see what other theories are.

Maybe go to some other channels and see what they're saying. I'm sure most people already do that anyways, but I would encourage you to do that. I think that makes a whole lot of sense to just see what other people are saying because you don't want to live in an echo chamber. And um and by hearing what other people have to say, I I think it can help you kind of form formulate your own opinions, right? right? Like maybe like, oh, like I didn't see that.

That makes sense. Maybe I should I should consider it that way. But anyways, those are my views. Uh or maybe lack there of views. Uh but those are my that's what I wanted to say. Thank you guys for tuning in. Uh and I will see you next time. Bye.