Bitcoin Rallies to the Bear Market Resistance Band transcript

Hey everyone and thanks for jumping back into the cryptoverse. Today we're going to talk about Bitcoin as we've rallied back up to the bare market resistance band. 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 at into the cryptoverse.com. It was a fairly exciting day in the crypto markets after volatility has been compressing for a long time and Bitcoin has now rallied back up to the bare market resistance band.

One of the things we've talked about probably for what the last four or five months is that Bitcoin is essentially being compressed between the bare market resistance band and the 200 week moving average. Okay, so you can see we're kind of going back and forth between these two zones. And so the question is is right like which way is this ultimately going to break right? Is it going to break to the upside or is it going to break to the downside?

You know, I've talked a lot about where I think this is going to go, how I think it's going to play out. Um, you know, what normally happens as we get further out into the midterm year. And, you know, it's important again to have a strategy. And a lot of people have reached out today, right? And they've said like, well, you know, Bitcoin's up a lot. Like, what does that mean? And again, there is this is a a a sort of a candid reminder that the strategy that I use for Bitcoin in midterm years is to DCA it in the second half of the midterm year, right?

Starting on July 1st. And the reason for that is because it is so hard to get the bottom. Now, coincidentally, July 1st ended up being the low, at least so far. If you DCA Bitcoin starting in, you know, the summer of 2018, you would have caught some nice rallies and then eventually the market dropped, right? If you did the same thing in 2018, you would have caught some nice rallies and then eventually the market dropped.

Um, so, you know, is it is it possible that that we don't get that final drop? It's possible, right? I mean, like anything's possible and that's why a DCA strategy works best. It helps to deal with the FOMO, right? Like the emotions that can occur when you get rallies, especially if you're not buying at all. And that's the reason why it makes sense in my opinion to do that. The other thing I'd like to say as well is that if you are absolutely convinced beyond a shadow of a doubt, right, if you're convinced that the low is in and now you're mad at yourself for not buying, one of the things to consider is that Bitcoin is below 70K, right?

Like, you know, from the highs, Bitcoin is still down almost 50%. And so there there's a reality of you don't always even have to time the bottoms to make money, right? As long as you get the majority of the trend, it should work out in your favor. So if you're convinced that the low is in, then don't let you know that potentially dissuade you from or don't let it don't become mad at yourself, right, for not for not getting in. you can always get in, right?

Like there there's there's always going to be more cycles and that's not ever going to change in my opinion. Right? Now, obviously some people think that Bitcoin won't won't make it long term. I I would disagree with that, but at the same time, you know, is there still some evidence that Bitcoin could go lower? Yeah, like it could. I mean, and and we've gone through that. The MVRVZ score, for example, right? the, you know, the the realized price.

We haven't gone below that. Now, maybe we don't. Maybe we go below it in, you know, in the future, right? Like maybe we just go back up and and then we go below it in the future when no one's expecting it. But a lot of times in midterm years, Bitcoin gets rallies, right? And and sometimes we even go above the bare market resistance band uh before before heading back down. and and so I think that you know it's a little premature I think to necessarily say that it's over in terms of the bare market especially considering like if you look at at the length of time of this bare market and and like look at it with respect to the last couple of bare markets it's not like we never had little rallies right I mean you can look at at the chart you see this rally like the rally we just had by bitcoin that feels like so amazing and and like you know like what a crazy rally to you know to to see.

It's this little move on the chart and we even in last cycle we actually had a similar move around this time, right? That was actually even a larger rally than the one we just had, right? It was even a bigger rally and yet it still didn't necessarily dictate that the low was in, right? We still eventually went lower. So, I think it's probably important to have some like invalidation levels or invalidation points in time.

I I think if Bitcoin's going to go lower before the next bull market begins, it'll happen before the end of the year, frankly, right? Like I I think it'll happen before the end of the year. And if it doesn't happen before the end of the year, I do not think it makes sense to be a bear going into 2027. That that would be my assessment. I I think it it makes sense to be a bull going into 2027. The only question is is, you know, is there another drop between now and then?

And, you know, there's been a couple of times this year already where we had some pretty nice rallies and to a lot of people it felt like the bare market was over, but it wasn't, right? I mean, we've had several rallies that were to levels much higher than where we are right now and and the bare market was not in fact over. So for now, I I think in terms of time, the invalidation for me would be if we go for the rest of the year without a lower low, I don't think it would make sense to call for a lower low beyond that.

But because of where we are in the cycle, there is still some evidence to suggest that it it might happen. And you know, you don't even have to look that far. are I mean if you look at 2022 you know Bitcoin had several rallies even later in the year than this I mean Bitcoin rallied up from this low in September which again is later in the midterm year than we are now Bitcoin rallied up 23% and then still fell back down and then from this low it rallied up almost 19% and fell back down right right here this so you had you know, a couple of 20% rallies.

Now, if you look at the current rally from the low, we're up about 20 21 22%. So, it's not that we haven't seen the rallies before, like we have. The question is is like when when is it over? When do we not have to keep going down? And and I mean, obviously, that's the question on everyone's mind. If you look at 2018, you'll see something similar, right? Like, we had some nice rallies. Bitcoin rallied in a or sorry in from June to the August high Bitcoin rallied about or the July high we rallied about almost 50%.

And then we've had another rally in in um August where Bitcoin rallied about 26% up to the bare market resistance band and then just gave it all back. So I mean there's a couple of things to consider. I would argue one of the things to look at a little bit closer is the 200 day because we did get a daily close above that and that is certainly something right like that's not you can't just scoff at it and pretend like it doesn't matter.

There are times in in history where you get above the 200 day moving average and it's a good sign, right? Like if you look at what happened in 2023 and if you look at what happened in, you know, after the low in 2018 going into 2019, right? getting above the 200 day moving average was a good sign. There's also been, you know, a couple of bare markets where it wasn't, right? Like in 2014, uh, where we got above the 200 day SMA a couple of times and it didn't necessarily mean anything.

And after getting above the 200 day moving average, we then fell into the October low. Um, and we've made the comparison to 2019 a couple of times, uh, in terms of the business cycle, and we got above the 200 day moving average in that a couple of times. Now, one of them was the pandemic, but even without the pandemic, we got above the 200 day moving average and then still went, you know, still went on to put in a slightly lower low.

So I think I would argue if if this is to be sustained, then what you would expect would be for Bitcoin to not just simply get rejected here at the bare market resistance band, but to actually power through it and then to see follow through where then you know it holds it and then it just continues on up. If on the other hand, we're just rejected here once again, then basically we're going through the same process of kind of just bouncing around between these two levels until they get so close so that the Bitcoin has to decide one way or another.

This is not the first time, by the way, that the 20week SMA and the 200E moving average have converged. There's been times where they converged like in in 2014 where you can see that Bitcoin briefly dropped below the 200 week. It went up to the bare market resistance band, got rejected, came back down, squeeze. Look at that squeeze right there, and then eventually it broke through and then it was a fake out, right? And we came right back down. 2019, right?

Same thing. We ended up breaking through it. Eventually, we came back down. to a higher low. 2015 was a lower low. 2019 was a higher low. 2022, you can see these two were coming together and we just broke down below it. So, I can't tell you which way it's going to break. I can tell you that in terms of time, it's not impossible for this the bare market to take a little bit longer. in terms of some of the metrics like the, you know, the MVRVZ score, it still hasn't gone below zero and normally it does in bare market years.

If you were to look at um the realized price, right, historically, Bitcoin goes below the realized price in bare markets, as you can see, 2011, 2014, 2018, 2022. Hasn't done it in 2026. It doesn't mean that it has to, but it hasn't done it yet. And so, you know, like I it's not that I can't sympathize with why people are getting excited right now. Like this is one of the better moves that Bitcoin has had in a while, right?

Like we haven't been at these prices since early June. So, it's it's woken some people up, right? It's certainly woken some people up. But there's also reality too of there have been several times that Bitcoin has had um a little rally in August before getting a drop a little bit later in the year. You know, you can see August of uh 2018 and you can see August of 2022. Now, you might say, "Well, hold on a second, Ben.

That's not what you said, right? What you said was that Bitcoin would likely go down in August. And you're right, right? Like I did say that and and I might be wrong about that. Right. If you look at at midterm years, you can see that every midterm year, Bitcoin has gone down in August and right now it's actually up 10%. So what gives? Like could could Bitcoin go down in August? I mean, it's not as likely now as it was a week ago, that's for sure.

Because Bitcoin's a lot higher. But, you know, I mean, if you were to look at 2022, you can see that Bitcoin had a rally in August, right? We had uh well, I guess it was late August going into early September, but we we had a nice little move. We had a a rally in August in uh in 2018, right? Look at this rally right here that Bitcoin had in 2018 where Bitcoin rallied up more than what it just rallied up, right? It rallied up almost 30%.

So, how can that be, right? How can the month still be red when you're getting these big rallies? Well, it's because you get this big r a big red candle at some point in the month. In fact, if you look at 2022, we zoom over to to 2022. Bitcoin went higher in August than it did in July. You see that candle? You see that wick? Bitcoin went higher in August of 2022 than it did in July 2022. But it still closed red. Right?

Right now we are higher than we were in July. I'm not saying it's going to close red, but again there's some precedent for just because you take out the monthly high from a prior month doesn't mean that it's over. And we actually just went through this process in March and April, right? Like March had a wick high, April went a little bit higher, and then, you know, May even went a little bit higher and then we sold off.

So, you know, look, I'd love to get on the bull bandwagon. I I'm looking forward to, you know, to 2027 and hopefully just being bullish again and and not, you know, being on the other side of the four-year cycle. I'd love to see that. At the same time, there's there's still evidence that suggests that, you know, we could still go a little bit lower. That doesn't mean you can't buy Bitcoin. I think a DCA strategy makes sense, but it just, you know, it it makes sense to be aware of of the different pieces of evidence out there.

And if you look at the monthly hyenashi candles, you can see that the monthly is now slightly green. Um, we had one that was green back in May as well. So, I think Bitcoin still has a little bit to prove here. Let's see if we can get through the uh the bare market resistance band and if we can if we can then hold it as support. Um, and then we can talk, right? We can talk about what that would mean and and how that could could change the cycle.

But those are my thoughts for now, right? We talked earlier about Bitcoin likely getting back up to the bare market resistance band at some point before the cycle low is in. Uh well, we're there right now. In 2018, Bitcoin was at the bare market resistance band the week of August 27th and it rallied up to 7,300. And we've talked a lot extensively about the similarities between 20, you know, 2018 and and 2026. In fact, the low in August um was around 5800 5,800 5900 back in uh and here it was a little bit higher, right?

It was around yeah like 62K. But again, like there's similarities, right? You're you're you're finding lows around the same time. And you can kind of verify that by looking at the year-to- date ROI of Bitcoin in 2026 compared to 2018. And you can see how the rallies more or less line up. Even see this rally lined up and then we went down, right? We went down at the same time. We just didn't go as far down. And then we got we're getting another rally kind of when we got a rally in 2018 and then that rally lasted until early September before it sold off.

So, we'll see. We'll see how it plays out. I mean, certainly an interesting day in the markets. Uh we'll see what happens over the next few weeks if Bitcoin can hold these levels at the bare market resistance band or if we just simply get rejected uh like we have previously done this year and also previously in midterm years. We typically find ourselves getting rejected by the bare market resistance band until we get into the um the the preh havinging year.

So one week at a time. Those are my views. Thank you guys for tuning in. Uh if you want to go to the ITC conference in November, make sure you guys get your tickets. Ticket prices are going up on September 1st. I'll see you guys next time. Bye.