Bitcoin: A Critical Moment transcript

Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin and the importance of the weekly close coming up. 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 intothecryptoverse.com. Also, make sure to get your tickets to the first ITC conference at benjamincowen.com.

Link is in the description below. Uh we have a lot of great speakers coming. I hope to see you guys there. The conference is taking place in late November. Main conference day will be November 21st. We'll have some stuff the Friday night before as well. So, I've already been talking about this a lot, but to me this is like the most important thing to talk about, right? So, I think it's going to be a long weekend because the weekly close is coming up, and I I think it's going to be very instrumental for understanding the likely outcome for the fourth quarter of the year.

And what I mean by that is a weekly close below the May high, in my opinion, would be seen as incredibly bearish because then you're looking at what would look like just a massive fake out wick above the range high to get everyone, you know, of the of the opinion that there will not be a drop in Q4. A weekly close above the range high would show further acceptance of the bull market. Okay? Now, this is coming from someone who did not think we would take out the May high.

So, you should take that into consideration. I am not coming to you from the perspective as someone who predicted this. I'm coming to you as someone who did not predict the rally above the May high, and I have said many times that I was wrong about that. So, any type of view that I express from here on out, if it's bearish, will be seen as, of course, a coping mechanism. And there's maybe some truth to that. So, I want people to in this case, rather than predict what's going to happen here, I would say react.

Don't predict, react. A weekly close below the May low, sorry, the May high. A weekly close below the May high would look like this is a massive fakeout before you go into a typical Q4 weakness. Now, here's the thing. Because we have a higher high, I have to be less deterministic about a new low, right? We could go back down, but it doesn't necessarily have to be a new low. It could be, but I'm not going to sit here and and bang the drum as loud as I would have had we not put in a higher high.

So, that's what I would be doing to kind of combat my my you know, the fact that I was wrong about this current move in the first place. Would be to say, all right, well, because I was wrong, maybe I should use that to then reassess what might actually happen in Q4 if we do see weakness. Like, should I be as a deterministically bearish and call for a new low? Could still happen, but with a higher high, I would be more so forced to consider the less bearish option.

But again, we don't have to predict this. I think it makes more sense to react to it. Because acceptance above would show that not only do you have a close above the 50 week, but now you've extended it, right? Now you've extended beyond it. And and then more people are going to become bullish. But if you accept right back down, then it looks like a fake out. And I've shown this chart many, many times, but this gives you an example.

It's the silver chart. I want you to imagine for a moment it's and you're trading silver, okay? And you just had a a nice bull run. Silver rallied a lot. It then came down here and set a low. And then after setting those lows, it came up to the top and set a high. And it came right up to those levels, but closed just below it. And then had a massive move to the upside, where silver rallied from the prior high, rallied about 6% above the prior high.

Okay. So, if you look at Bitcoin from the prior high, from the prior weekly close high, it's about a 6% move, right? So, it's really similar to what silver did. It's very similar to what silver did back over here. So, if Bitcoin Bitcoin closes below the prior range high, right? Which is around 83K. It's like 82.8, but it's going to vary depending on what exchange you're looking at. It's around 83K. If it closes below that, then my base case would be weakness into Q4.

It would not change the fact that I'm wrong about the current move. That is cemented in history that I am wrong about the current rally. Okay? That's never going to change. We went to a new high, and I'll be hearing about it for the next 4 years. I can guarantee you that, okay? But I'm just saying, watch it because I I I I get the sense that that, you know, any bearish outlook is is obviously like done gone. And And for the right, you know, for right reasons, I think.

I mean, you know, if if I'm going to sit here and and say that we can't take out the May high, or we we're unlikely to, and then we do, you know, there's there's some justification for ignoring the persistent bearish view because the bearish view I already communicated had did not pan out, right? Like it didn't pan out. So, I I I I get the the reason for ignoring it, but I just want people to know that we have to We're all students of the market, right?

And, you know, I didn't think we were going to take out these highs, and we did. And, you know, it it seems to go against a lot of the a lot of the macro right now, like a lot of the macro views, which have panned out. And if you look at at the yields, I mean, the long end's continuing to scream higher, like practically every single day. The 30-year yield is now at 5.5%. It's probably heading to 6%. This thing keeps going up.

So, if you had to imagine a scenario where what would cause a fake out, it would be because the long end the the bond vigilantes are revolting. It wouldn't be the first time you've had a fake out. So, then you have to ask yourself, what happened in silver in 2012 that caused such a massive fake out? Back then, investors were betting on a return of quantitative easing in some form. And then, you know, one of the I don't think it was maybe maybe one of the members of the Fed or someone, they came out and said they were way more hawkish than the market thought, right?

And so, what happened is that the debasement trade unwound. It completely unwound. So, everyone was sort of playing this debasement trade that, you know, they're just going to print more money and and therefore you need to own hard assets. But, what happened was the opposite, right? They They didn't print like the markets thought and the debasement trade unwound. A few weeks ago, I put out a video about the dollar, right?

And I said in the video, I said that the market is wrong about the dollar. And I published it I published that video like right here before the final drop, okay? So, I said the market is wrong about the dollar. And I got a lot of hate for it, right? If you go look at the post I put on Twitter, the video, practically every comment under that tweet is saying how wrong I am and that the market is the market's telling truth and the dollar's going to go down because they're going to print money.

But, what happened is that in the short-term in like for the for one one or two days, I was wrong and the dollar dropped. But, now look at it, right? Now it's all the way back up and it looks like, I mean, looks can be deceiving, but it looks like it wants to set another higher high. So, if the dollar is going up because yields are going up and the the the yields are going up, therefore it's causing, you know, a higher likelihood of more rate hikes than the market's expecting, which is causing the dollar to go up.

If if that if that does not cause Bitcoin to close below the range low or the sorry, but below the range high, then that would be very that would look a lot more bullish, right? If Bitcoin can shrug that off and say, "You know what? I don't care about yields and the dollar and all that stuff, you know, like leave that for the macro bros." If if Bitcoin can shrug it off then I think that would further weaken the bear case.

Right? Further weaken it. But if it can't and it and it drops back down then I have to ask myself, right? Is this wick here enough just to get people thinking you won't have a drop in Q4? Because if imagine spending all year talking about weakness in Q4 of the midterm year. And now we are less than a week away from Q4 and now it seems like everyone's convinced there's not going to be any weakness. Sometimes the way for the weakness to happen is to first convince everyone else that it won't happen.

So, in this case I would say watch the weekly close. Don't predict it, react to it. If it closes below if it closes back below here below the May high then you're likely looking at it heading back down to the range lows just like silver did once upon a time. You see that you can see the part you can see the chart, right? I mean, it's the same thing. It it just does it close back below it or not? If you zoom in to silver back then you know, it it basically was consolidating and had a massive move up and then it gave it back the next day.

Bitcoin's not doing that, right? Like it didn't give it back the next day, but it is slowly coming back down. As it stands right now, all it's done is retest the spot that it broke out from. That's all it's done. So, Bitcoin has not yet given back those gains. You can see the wick we had was just to retest where we broke through. But, if Bitcoin gives up 82.8k, you're probably what would probably happen is it would likely drop back down into like the high 70s before then bouncing back up and trying to reclaim it before the weekly close.

So, that's what happened with silver, right? So, again, this is a really tough time for, you know, for for the market cycle, right? Because it's a week before Q4. Bitcoin has had the golden cross. It had the dump after the golden cross, and then it had the rally. And it I mean, honestly, it looks a lot like the 2019 and 2023 bull markets after the low it was in. It does. I'm not going to lie. Like, I'm not going to sit here and blow smoke.

It does. From a technical perspective, it absolutely does look like 2019 and 2023. But, if we close below, I think it's important to react. And I do not want people that are making a fortune in the altcoin market to ignore it. You can argue that the fact that altcoins are doing well, um is a sign that, you know, I mean, people are people are already betting on the bull market, right? So, if Bitcoin were to close back below, the things that would get hit the most where I would actually be altcoins because they would have the most to give back because they're betting on a future that hasn't necessarily been confirmed yet.

We don't know if we're going to still accept above the May high or not. So, they're betting on a future that has not been confirmed. And I've always said it takes two weekly closes. I've always said that. I mean, I've always said you want to see the weekly close above and then you want to see follow through the following week. On the weekly, right? We had the close above. It sure does look like we have follow through.

It sure looks like it. But, the week's not over, right? It's not over yet. So, we'll see what happens here. One way silver was different than Bitcoin is I believe it was still below the 50 week. I'm pretty sure. Let me check. So, there was never a weekly close above the 50 week, but it was a wick above the 50. So, it's not the same thing, right? Like, it's not. Bitcoin had a weekly close above the 50. So, it's not the same.

I want to be clear, it's not the exact same. All I'm saying is watch the weekly close. If we accept below the May high, then this is likely a fake out and you don't have to then wait until Q4 until like the November or December to get the memo. You'll have the memo in late September, early October. You'll You'll have the blueprint. I think this is an important one, right? I mean, I'm not going to say it can't happen ever.

If it doesn't happen this week, it won't ever happen. But, I would say that this week would be one of the more consequential closes. And the reason is because if you close above the May high and you accept above it, I think that would that would look more bullish because at that point you're saying Bitcoin's going up despite all this bad stuff. But, if it closes below, I don't see how we don't just go into the typical Q4 weakness anyways after everyone thinks it's not going to happen.

So, again, it doesn't change the fact that I'm wrong about the May high, whatever happens from here. And if we accept above, I I'm not going to just bang the drum for all Q4 that we have to have a drop. But if we close below, I think objectively, I think objectively it would be bearish on a close below. Because how do you How would you look at the silver chart back then and say that that's bullish, right? If you have a massive wick up, and then it comes back down to close, and then you just spend the next couple of months going right back down to the lows, which you already went down to twice.

So, watch the weekly close. I think it's important. It's going to be a long weekend for sure. Uh let's see what happens. I'm sharp, right? Like I I'm still trying to get a handle on the market, and I'm trying to be honest with you guys. I mean, I know there's some people dunking on me right now, and that's okay. I mean, if if Bitcoin if you know, they've been right for the last uh for the last several weeks. You know, their views have been right.

They have every right to dunk. I don't care. I mean, I can take it. Um but I just want them to recognize, too, that if this happens, it would be prudent to pivot back to the initial idea of weakness into Q4. But to perhaps adjust what that weakness would have to look like. And it does not necessarily have to be to a new low. Okay? Um And if you look at what Bitcoin does after rate hikes initially, right? Like if you look at um Bitcoin's ROI after the first rate hike in a rate hiking cycle, you can see that a lot of times the weakness doesn't really show up for a few weeks, right?

Or a couple of weeks. And if you look at the ROI after a rate hike in a midterm year in September, you can see that a lot of times Bitcoin doesn't really start showing weakness right away after that after that rate hike in September of a midterm year. But that the the window of weakness for it would be, you know, days 50 out to say day 90 after the rate hike. That's kind of and and you can see in 2018, the low occurred about 81 days after the midterm after the September rate hike.

And in 2022, the low occurred uh 49 days after the September rate hike. And if you average the the if you average the results, the low occurred on 81 days after the rate hike, and it would have been 29% down from where the rate hike occurred. So, what's interesting about that, right? What's interesting about that, is that 29% down from where the rate hike occurred, right? So, the rate hike occurred um where was it? It was like somewhere over here, right? 29% down basically puts you near the lows, right?

And then that's the average, right? Like I mean it could it would actually put you below the realized price, um which would be a slightly lower low, right? Like you'd be kind of connecting the dots there. But if it's a little bit less, it could just simply be just retesting the lows again. Honestly, these videos are really hard to make because I'm already wrong, right? Like I'm already wrong about the May high. Um and whenever I am wrong, it's hard to like get my bearing, you know, because then it feels like any view I express in the short term is automatically discounted because I was wrong, right?

So, I'm not oblivious to that and I I I I get where people are coming from. And so, all I'm all I'm going to say is I'm going to go try to enjoy my weekend, you know, um, but let's see where let's see where Bitcoin ends up. And and if it and if it can hold the May high or not. And if it can hold it, I will I will have to not be nearly as deterministic at all going into Q4. I will have I will be forced to to to pivot my views even more so.

The market does not have to conform to my expectations. My expectations could absolutely be wrong. And they have been wrong, right? They have been wrong. So, I'm perplexed, right? I mean, every day the long end goes up basically. Like, you know, 10-year, 30-year continue to climb. Energy prices continue to climb. The dollar continues to climb and Bitcoin keeps shrugging it off. So, which I mean, which way is it going to go?

I mean, I to me, it doesn't make sense. But markets don't have to make sense. That's the beauty of markets, right? They don't have to make sense. And and I I can like I can happily accept follow through. You want the first close above and then you want follow through. And right now, it looks like we have the follow through, but things can change quickly. So, we'll see what happens. Thank you guys for tuning in. Subscribe, give the video a thumbs up, and I'll see you guys next time.

Bye.