Bitcoin: Dubious Speculation

Estimated read time: 1:20

Summary

Benjamin Cowen discusses the current state of Bitcoin and its relationship with the stock market. The video delves into the recent market downturns, focusing on the comparison between Bitcoin's performance and the stock market's declines. Cowen highlights various external factors such as tariffs, inverted yield curves, and economic policies that influence these trends. The analysis includes historical context, looking at past market behaviors to understand current movements. Despite Bitcoin's perceived recent strength compared to traditional markets, the anticipation remains for potential further retracement or corrections.

Highlights

Bitcoin is currently outperforming the stock market, but caution is advised as it typically aligns with stock performance. ⚠️
Historical market behaviors suggest Bitcoin may still see a downturn in line with broader market trends. 🔄
Economic policies, including tariffs and yield curve inversions, significantly impact both Bitcoin and traditional markets. 🏦
Despite short-term resilience, Bitcoin's long-term trends may still pose risks of falling in line with negative market movements. ⏳
The analysis of economic cycles and past recessions aids in predicting potential future behaviors of Bitcoin. 📅

Key Takeaways

Bitcoin has displayed recent strength compared to the stock market, but historical patterns suggest it may follow the market downturns soon. 📉
Economic indicators and historical precedents point towards potential further decline for both Bitcoin and the stock market. 📊
Despite current optimism, Bitcoin's behavior could mimic past patterns where it caught up to the stock market's negative trends later. 🕰️
Tariffs, inverted yield curves, and the ongoing economic policies continue to suppress market recovery. 🚧
Historical trends, like the post-halving year comparisons, provide insight but also caution about expecting repeating patterns exactly. 🔍
Bitcoin's performance often mirrors macroeconomic conditions, highlighting its status as a risk asset. 📈

Overview

In this video, Benjamin Cowen provides an in-depth analysis of Bitcoin's recent performance amidst broader economic downturns. Cowen reflects on Bitcoin's recent ability to outperform the stock market but warns viewers not to become too complacent. Despite Bitcoin's current standing, historical patterns suggest it might follow the market's declining path eventually.

Cowen discusses the interplay between Bitcoin and the traditional financial markets, explaining the effects of economic factors like tariffs and yield curves on market behavior. He uses historical precedents to anticipate future market movements, reinforcing that Bitcoin's performance is tied to broader economic conditions and market cycles.

Throughout the analysis, Cowen emphasizes caution amidst optimism. While Bitcoin seems to hold strong compared to traditional markets, the factors of past market behaviors and current economic uncertainties suggest being prepared for potential corrections. As usual, Cowen encourages viewers to stay informed and cautious, maintaining a strategic approach to their investment decisions.

Chapters

00:00 - 00:30: Introduction and Overview The chapter introduces the topic of Bitcoin dubious speculation. The speaker invites the audience to engage with the content by subscribing to the channel and liking the video. They also mention a sale on their premium product. It is noted that the speaker has been away for a week and acknowledges the release of pre-recorded videos during their absence.
00:30 - 05:00: Recent Market and Bitcoin Performance The chapter "Recent Market and Bitcoin Performance" explores several significant events that occurred recently, especially in the stock market. It also delves into Bitcoin's reaction to these developments. The chapter discusses various aspects of Bitcoin, reflecting on short-term challenges it has faced. Though recorded a week prior, the topics discussed remain relevant and timely, focusing on speculation related to Bitcoin amidst current market conditions.
05:00 - 10:00: Stock Market Trends and Impacts on Bitcoin The chapter titled 'Stock Market Trends and Impacts on Bitcoin' discusses the significant influence of stock market trends on Bitcoin's performance. The chapter begins by noting the importance of the 21-week Exponential Moving Average (EMA) as a support level for Bitcoin. The discussion highlights how the 'bull market support band' often acts as resistance until clear evidence contradicts this assumption. Despite historical trends showing that Bitcoin typically performs well in April, the chapter explains that this has not been the case this particular year. Various factors are considered in analyzing why Bitcoin has not followed its usual upward trend during this period.
10:00 - 20:00: Bitcoin and Stock Market Analysis The chapter discusses the foreseen weakness in the stock market that was anticipated to begin around the February options expiration. This expectation was publicly communicated a few months earlier, focusing on the period through March OPEX. The analysis reflects ongoing observations and considerations relevant to market performance within that timeframe.
20:00 - 30:00: Bitcoin's Relationship with the Stock Market The chapter discusses the potential impact of tariffs and inflationary concerns on the stock market, suggesting that these factors could lead to continued weakness into early to mid-April. It notes patterns of similar downtrends in previous years starting around late February and extending into March.
30:00 - 40:00: Impact of Economic Policies on Bitcoin The chapter titled 'Impact of Economic Policies on Bitcoin' discusses the influence of market trends and economic policies on Bitcoin's performance. It specifically mentions historical instances such as in 1997, where market weakness began in late February and extended until mid-April, leading to about a 10% price drop. This is contrasted with the current scenario where the S&P 500 has experienced a more severe downturn, highlighting the greater volatility and impact in today's economic climate.
40:00 - 50:00: Discussion on Market Patterns and Predictions The chapter titled 'Discussion on Market Patterns and Predictions' focuses on historical market trends and current shifts within financial indices. It compares past market drops, such as the early 2000s dot-com era decline, to present circumstances. Notably, it discusses a significant drop in the S&P index, estimating it to be around 17 to 18%, emphasizing its severity in comparison to historical downturns. The ongoing market behavior and its implications are key highlights of this discussion.
50:00 - 60:00: Ethereum and Market Cycles The chapter discusses the relationship between Ethereum, Bitcoin, and market cycles, primarily focusing on the stock market's influence on cryptocurrency. The speaker mentions the occurrence of an inverted yield curve and refers to a pattern of market behaviors observed in stock markets that could similarly impact Bitcoin. The key argument is that understanding stock market movements is crucial for understanding Bitcoin's trends since Bitcoin behaves as a risk asset.
60:00 - 70:00: Comparison with Historical Market Trends The chapter compares Bitcoin's performance against historical stock market trends. It's commonly believed that Bitcoin has not decreased in value, unlike the stock market. However, the reality is different. The stock market has declined by 17 to 18% from its peak, while Bitcoin is down by approximately 24%, even after a recent recovery. This contradicts the narrative that Bitcoin is outperforming and not experiencing a decline.
70:00 - 80:00: Final Thoughts and Conclusions The chapter 'Final Thoughts and Conclusions' discusses the performance of Bitcoin compared to the stock market. It highlights that Bitcoin exhibits higher volatility, which is consistent with its history of greater percentage increases compared to traditional stocks. The speaker notes that although Bitcoin dropped 24%, it previously increased by 600%, which is significantly better than the stock market's 76% rise and subsequent decline. The final thoughts suggest that considering Bitcoin's nature, its performance remains impressive despite the fluctuations.

Bitcoin: Dubious Speculation Transcription

00:00 - 00:30 hey everyone and thanks for jumping back into the cryptoverse today we're going to talk about Bitcoin dubious speculation 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 let's go ahead and jump in so there's actually quite a lot to discuss as I've been out of town for over a week now in fact all the videos released on my channel over the last
00:30 - 01:00 week were recorded basically a week before that now fortunately many of the topics were still very relevant and we'll talk about those but there's obviously a lot to talk about a lot happened last week especially in the stock market we'll talk about Bitcoin's response so generally if I just want to talk about a lot of different things that relate to Bitcoin I'll just make it a dubious speculation video which is what this is in the short term note that Bitcoin has been having a hard time
01:00 - 01:30 actually getting back above its 21week EMA so as I said previously you know the the support band right the bullmark support band is is resistance until proven otherwise and so far you know nothing has been proven to sort of refute that idea now you might wonder why is Bitcoin not doing so well during this time of the year normally Bitcoin does pretty well in you know sort of the April time frame of post
01:30 - 02:00 having years um but as we talked about we expected weakness in the stock market starting around February opex February options expiration if you guys remember we we talked a lot about that a couple of months ago uh that there would basically be weakness in the stock market starting around February opex and at least extending through March OPEX but then we noted that due to you know due to some of the things we've seen in
02:00 - 02:30 the past that that weakness can extend into early to mid April given the whole tariff stuff and inflationary worries that might persist into April with the tariffs and whatnot it seems somewhat likely that the stock market would continue to show weakness into early to mid April this is what we talked about and one of the things that if you if you look closely at at some of the prior downtrends that started kind of around that same time frame sort of like late February going into March again a lot of
02:30 - 03:00 times you'll find lows in March but there are some times where it will persist into sort of midappril or so 19 97 is a good example of that right weakness started in um in sort of late February just like it did this year and then it persisted until about mid April or so in fact if you look at a price range though back then it was only about a 10% drop which right now obviously the S&P is pushing a lot worse than that and then also if you look at at the S&P 500
03:00 - 03:30 in in sort of the dot era when it started to drop in in that sort of that March time frame it also extended into sort of midappril or so but what I'm looking at right now has nothing to really do necessarily with those sorts of comparisons because this drop for the S&P has actually been quite a bit quite a lot more than what you've seen in those other years right it's been about 17 to 18% or so um now remember I mean
03:30 - 04:00 we do have obviously we had the inverted yield curve it's actually reinverted I believe um but I was looking at this drop and one of there's a pattern I I've sort of looked at and and we we you actually see it play out several times with stock market and the reason I'm talking about this is in this video on Bitcoin it is but in order to really understand like what Bitcoin is going to do we need to understand what the stock market's going to do because whether we like it or not Bitcoin is in fact a a risk asset right also I've seen a lot of
04:00 - 04:30 people say that Bitcoin hasn't gone down despite the fact that the stock market has but I don't know that that's even necessarily true i mean I think it depends on how you measure it of course i the stock market right now is down about 17 to 18% from the highs uh Bitcoin believe it or not is actually down more than that um even with the current bounce back up it's down about 24% from the highs so obviously there's the narrative out there that Bitcoin is doing really well um and that it's not dropping but the reality is actually
04:30 - 05:00 already dropped more than the stock market has um I think though that sort of a fair thing to suggest though is that and this is sort of to cover our bases that well yeah I mean you expect that you know sort of excess volatility with Bitcoin because Bitcoin also went up a lot more than the stock market right okay so if Bitcoin went up 600% which is what it did then and then it only dropped 24% that's a hell of a lot better than the stock market going up only 76% and then dropping nearly the
05:00 - 05:30 same amount that Bitcoin has so you can understand like why there's been a lot more optimism recently this last week with with crypto because Bitcoin didn't really see that same type of sell-off now we've talked a lot about you know sort of these upcoming things for Bitcoin but one of the things I I would like to at least mention is and there's no guarantees right there's absolutely no guarantees but a lot of times in history where we see sort of the stock market sell off and where we see Bitcoin stay relatively flat then people sort of
05:30 - 06:00 celebrate it and then what often happens I don't I mean I don't know it off the top of my head but what it seems like with my memory what often happens is in like a week or two later then Bitcoin drops and then people like oh okay there it is um so I I would I wouldn't necessarily jump to any conclusions just yet absolutely bitcoin has outperformed the stock market over the last week or so in fact if Bitcoin were at sort of the same level as the stock market look at this stock market has retraced all
06:00 - 06:30 the gains that it's had since August of 2024 it's gone below that if Bitcoin did the same thing I mean that would put Bitcoin back below $49,000 if it were basically behaving as the stock market so the ultimate question is is well is Bitcoin lagging what's going on i would still keep in mind sort of these two levels for Bitcoin one of which I still think will likely be achieved um and that's a retest of the of the 2024 high
06:30 - 07:00 we actually saw Bitcoin retest the 2016 high in 2017 right it was a fairly normal uh retest right i mean we saw Bitcoin drop about 35% and it retested the high from the prior year right it was about a 35% drop and here I mean if you just take it from the high you know about a 30 I mean it gets you about the same level right around that 20 24 high so with Bitcoin
07:00 - 07:30 continuing to struggle here at the bull market support band it at least puts that area on your radar especially with the stock market selloff that we've seen now I wanted to mention that there's a pattern that I I was looking at earlier and I at least want to mention it so it's on everyone's radar you notice that that the stock market sort of selling off into April right there was also weakness exactly one year ago in midappril okay so what I want to draw
07:30 - 08:00 your attention to is this thing that the stock market sometimes does where it will sweep a low about one year later right and I and it's kind of a it's sort of hand wavy but take a look at this this actually happened um several times throughout throughout Bitcoin's history where you'll find like weakness and then there'll be a weakness again about a year later at that same time where it'll sweep below that low so if you look at
08:00 - 08:30 like 1986 1987 there was this low here in September October and then exactly one year later it swept it right October um is is when it swept that low so about a year so you basically had a massive move up right a massive move up and then the stock market just completely gave all those gains back and it actually wasn't a recession in 1987 now obviously things are you know feel a little bit different than 1987 in
08:30 - 09:00 terms of some things like unemployment rate has been trending higher um but on the other hand it's still relatively low all things considered and so that's one example where you sort of sweep a low one year later and the stock market is actually getting pretty close to doing exactly that do you guys remember how we we actually talked a lot about you know the S&P divided by M2 and and sort of this this drop here this weakness in the
09:00 - 09:30 stock market that occurred right here was in October of 98 which was exactly what was it like one year basically after this drop right here right about one year later where it didn't quite sweep the low right but it I mean it had a drop right and it was about one year later right you had it from sort of late October to early October so about a year about a It it's one of those things where like
09:30 - 10:00 you know if you go back throughout history you'll find it where the market often times when it drops like one year later it'll sort of sweep a low before then getting a pretty large bounce up now I want to talk though first about the S&P divided by M2 because a lot of people have asked about this i've been out of town we talked about this months ago and it's basically sort of the recognition that this whole bull market began in October of 2022 the same level
10:00 - 10:30 that the S&P divided by divided by M2 began at in 1996 right and you can see that it rallied up to this level which is the same level it it just got rejected at now back then what ultimately happened is that the stock market sold off uh for about 2 months or so which is one of the reasons why I said to expect weakness in the stock market that you know sort of from that sort of midfebruary to midappril time frame it was sort of thinking hey like what if this just plays out where the
10:30 - 11:00 S&P divided by M2 gets this you know approximate 20% drop right approximate 20% drop and when you look at it like this you can see it already went below the April the midappril low right and back then that's basically what it did right if I remove everything you can see that there was this low um in October of 97 and then it basically went to that same level in October of 98 now you have
11:00 - 11:30 you know this April of 90 or sorry April of 2024 and then we just went back down to that low in April of 2025 now I don't know how much lower it's going to go before there's a larger bounce maybe the market's going to be looking for signs that tariffs won't be as bad or or maybe that inflation rate won't come in as high um but you know you at least have to keep these things in mind and and then I got sort of thinking like well what what happened in 1987 because I
11:30 - 12:00 mean that that was obviously a pretty big drop back then and then you can see that when the market dropped when you divide it by M2 it actually went well below where it was in October of ' 86 remember when we looked at it without M2 it didn't sweep it but with M2 it went well below it right so it and it stayed there for a little while and then ultimately the market recovered and then finally we got a recession but the recession low ended up not happening for you know a while a while while after that so remember like when you do get
12:00 - 12:30 recessions I think this is the thing I've I've talked about a lot is that you don't always get like 50% drops right i mean sometimes you just get you know 20% drops and you know now that the S&P has had um you know now that it's had a um an 18% drop at least starts to have you know it starts to come to the mind right all right well it's not that far off what we've seen historical recessions sort of the minimum baseline be approximately 20% now they can obviously
12:30 - 13:00 get a lot worse uh but that's where they normally sort of the starting point is approximately a 20% drop and if you note right what happened back then is there was another rally and then eventually it swept the low again and got another rally and then you finally got the recession so it sort of it's an important reminder that the market can play out over very long periods of time right very long periods of time
13:00 - 13:30 um before you know before it really starts to make sense and in in terms of like what's going on in the macro here too i mean this low right here this was October 97 and then you had October of 98 this was April of 2024 and then perhaps there'll be another low in April of 2025 before there's some type of of relief rally i suggested we might start to finally see some relief around the maybe the midappril time frame is is
13:30 - 14:00 what I'm thinking right now because you know there's obviously still going to be some discussions about tariffs um and also I mean the the inflation data comes out in in midappril but I guess the question is is like well given where the S&P is if it does you know if it is able to see a counter trend rally at the very least then what happens to Bitcoin because so far Bitcoin has been doing relatively okay right i mean it
14:00 - 14:30 has been and I I almost feel like you you'd have to assume right that if if Bitcoin um or if the stock market were to rally well then would would Bitcoin not rally with it i mean it it seems to be holding up better um so I don't know i mean like I I think that if history is any indication right we've seen times before where the stock market bottoms and then Bitcoin bottoms like a few weeks later right actually
14:30 - 15:00 one great example of that is is actually the last bare market right the S&P bottomed in um October of 2022 I believe right if you look at the S&P in 2022 right it bottomed in October of 2022 and then Bitcoin bottomed about 1 month later right about one month later um in November of 2022 now obviously you know it was FTX um but again sort of there's this argument that there's always a reason that we can explain away later as to why it took
15:00 - 15:30 longer for Bitcoin to do that um but there's like there's no denying the relative strength by Bitcoin against the stock market if you just plot out Bitcoin divided by uh the S&P right if you look at Bitcoin divided by the S&P what you'll notice is that it it it actually is above the bull market support band right now so it's been doing uh pretty well against the S&P i guess the the concern is that like is this different from like what we've seen
15:30 - 16:00 before um you know even in 2019 which we've made plenty of comparisons to you know you sort of had these highs right you had these highs and then it went below the bull market for a few weeks and then there was a rally back above it right there was a rally back above it but then you can see that there was another sell-off that occurred just on the other side of that so I I think you know while there's always reason to look at Bitcoin during times like this and sort of celebrate the relative strength and be like look like it is holding up
16:00 - 16:30 better than the stock market did last week and you know maybe it's because tariffs aren't going to you know I saw someone say Ethereum is made of aluminum one time and I it kind of sticks in my mind but I thought it was funny um but I guess I guess this is sort of the point is that like is it actually going to be durably outperforming or is this just a lower high kind of like 2019 now the one thing that I've talked a little bit about before is the death cross that's
16:30 - 17:00 coming up for Bitcoin and by coming up I mean it should happen within the next day or two i haven't actually looked at it that closely because I've been out of town uh but if we look here and maybe it already happened I don't know let's go take a look um no oh yeah I bet I when I made the video about the death cross a week ago I remember saying it should happen around April 6th April 7th something like that um it's now April 6th it still hasn't happened but it it probably will happen in the next day or two okay now what we sometimes see with that is
17:00 - 17:30 you know that there can be selloffs before the death cross and then sometime after the death cross occurs there's then a counter trend rally now a lot of people think that you know just because it's happened before it will always repeat uh but let me just show you where this come from where this comes from and I'll show you some counter examples as well if you look last year there was a low that occurred just before the death cross and then Bitcoin rallied up into it right and then that low ended up being the low for
17:30 - 18:00 the you know for for that drop and if you look at the year before there was a low just before the death cross and then it sort of rallied up right after the death cross right you you really didn't get a rally into the death cross it was more so Bitcoin dropped before the death cross kind of bottomed out around the time of the death cross and then it rallied on the other side of that death cross there's other times where the market certainly played out in a somewhat different fashion for instance if you look at the at um
18:00 - 18:30 2021 in fact um and and why not because you know that was a posth having year this is a posth having year let's just go back and look at what happened in the death cross in 2021 you'll see that you know when the death cross occurred while there was ultimately a rally that came eventually the market you know Bitcoin still didn't really go anywhere for a little while right like the the market the death cross occurred and then Bitcoin just sold off and then it didn't
18:30 - 19:00 really start doing well again until about a month after that and then if you go back and look at at 2017 right there was a death cross and when that happened um if you go back all the way to 2017 there was a death cross right here and you know when it occurred Bitcoin actually went a little bit lower first before getting a larger counter trend rally back up to that 200 day moving average so you know I don't want people to think that it it has to play out like it played out the last couple of years
19:00 - 19:30 it obviously could do something different but the thing I go back to and I the thing I continue to go back to is that if if the S&P 500 continues to show weakness then Bitcoin will not be able to ignore it forever right now obviously if if the S&P bounces and there's no idiosyncratic risk that sort of comes out of nowhere in crypto then you would expect Bitcoin to go up with the stock market but if if the stock market
19:30 - 20:00 continues to just sell off and let's say it does this thing where it sweeps the low from the prior year uh in April right like if it sweeps that low kind of like we were we saw before there's times where it'll sweep a low or get around that level a year later like if Bitcoin or if the S&P 500 were to go back down to 4,900 or around the prior all-time high not too not too far away from it then I have to imagine that Bitcoin will
20:00 - 20:30 eventually take notice right and and then uh it could then fall a little bit further down there's actually a good comparison here to make um you know with with some of these drops how you'll see Bitcoin you know get these bounces back up right but then eventually you would almost expect it at the very least to check back in with that weekly close right there at just below 80K like 78 to 79K that's what it did last year after
20:30 - 21:00 the death cross right so I mean I still think that's a likely outcome at some point in the coming weeks um I mean I I certainly could be wrong about that but it seems like that's a likely outcome i I I would honestly consider that to be the optimistic view i'm still thinking that there's a good chance that Bitcoin will retest the 2024 high and if it and if it tests that trend line sort of the lower high trend
21:00 - 21:30 line it would probably be a good sort of short-term trade like you know if it if it were to test that trend line all the way down here probably would be a really good short-term trade by Bitcoin like you probably get a massive counter trend rally off of that level um but I wouldn't necessarily be that optimistic for the remainder of the cycle if it were to in fact play out like that you know if it were to play out like 1998 right when we saw the S&P drop 20% before getting a larger rally to new all-time highs that could also correspond to Ethereum right you know
21:30 - 22:00 going and and sort of going home as we talked about and I mean it does seem like a lot of the stuff for Ethereum that we've been discussing has been playing out playing out in a really long period of time uh to the point where like no one believes it's actually happening as it's actually happening um but anyways I mean those are my general views right now on on Bitcoin that like I know there's a lot of optimism about it
22:00 - 22:30 outperforming the S&P and it's true right it is but I also know from experience right i've also been very sort of blind to that as well in the past and then like come to find out it was just lagging and then eventually it dropped like if you look at at sort of the Bitcoin divided by the S&P and you just take it and you look at say like a fib retracement level and you just take it from the highs right well what it's basically right now it just retraced to the 618 right it just retraced to the
22:30 - 23:00 618 now if you go back to 2019 which we've made some comparisons to as well and you look at the fib retracement like on this low and this was right when the death cross occurred that one went up to sort of the 0.5 right that one went up to 0.5 but there's other times right there's other times where it did get a stronger rally and I I believe if I don't really remember fully but I thought it was up to the 618 um it even went a little bit
23:00 - 23:30 higher right right here you can see that the Bitcoin divided by the S&P got this massive rally right here to basically the 618 a little bit higher than it and then eventually Bitcoin you know the weakness in Bitcoin showed itself again until the money printers really turned back on to just speak bluntly right what I think is going on is here's the thing right i don't know how to say this like in sort of like a you know methodical way but there's a
23:30 - 24:00 lot of things in crypto that we've talked about for a long time that are are are playing out right like Ethereum is breaking down it's finally going home and that's ultimately what I said needed to happen for things like ETH Bitcoin to turn around now it obviously hasn't turned around yet right it just continues to go lower but remember what we said was that in order for it to turn around you need a pivot by the Fed but you can't get a pivot by the Fed until there's pain in the market there's starting to be real pain in the market and so what I think is happening and I'm
24:00 - 24:30 I'm I'm fine if you disagree with me on this because I don't I don't really know how much I believe it but if someone said Ben try to explain what's happening right like what what's actually going on you know at at sort of the political level and and like why you know all the tariff discussion what's really going on what I would say is that there's a good chance that you know President Trump he's a real estate guy right he's a real
24:30 - 25:00 estate guy you know he knows right he knows that the only way for the long end of the yield curve to come down is for there to be pain right like you can't you can't get the long end of the yield curve down without pain in the market right because it's it's the very act of lower stock prices that then eventually lead to layoffs now that doesn't mean you're going to see it in the data tomorrow it could take half a year for that data to become apparent
25:00 - 25:30 but in order right in order for for the long end to go down and to then start to potentially revive the real estate market eventually because there's not really been a lot of transactions going on because rates are high and prices are high so in order to really revive the real estate market you need one of those things to come back down to earth either the prices or the rates right mortgages mortgage rates i think he probably recognizes that he doesn't
25:30 - 26:00 really want uh you know to sort of watch this play out over a long period of time where you know it just kind of drags out on and on and on it's almost like why not just get it out of the way now and deal with whatever pain comes with that so that's not the talking point for forever right you know it it's unclear right now if he's going to get more than he bargained for because again while the stock market going down means the long
26:00 - 26:30 end of the old curve goes down it can lead to layoffs and so there's a good chance that maybe some of the rhetoric will eventually be softened up at that point i would expect a large rally in in risk assets but there's always that question of you know was too much damage done where you ultimately still get um a larger drop later on because businesses start laying people off remember a lot of people think that
26:30 - 27:00 layoffs occur and then the stock market goes down but it's not true right it's normally the stock market goes down and then layoffs occur which then leads to a negative feedback loop right and so then the layoffs then mean the stock market keeps going down and it's hard to get out of that feed that negative feedback loop but it's the the thing that sort of sets it off to begin with is the stock market going down right stocks go down then give it a few weeks a few months
27:00 - 27:30 then you'll see the layoffs in the data that leads to a negative feedback loop which makes the stock market go down even more if it's not possible to get out of that negative feedback loop so what I think is happening I think Trump is purposely doing this right to drop the markets right to to to make the markets go down that allows the long end of the yield curve to go down right it allows the long end of the yield curve to go down i think he wants the Fed to
27:30 - 28:00 loosen up monetary policy but he knows the only way to do it is to is for stocks to basically crash and I feel like he's trying to speedrun it right rather than it be this narrative that plays out over years it's almost like you just want it to all play out now so that we get back to this other era of monetary policy right where higher risk assets outperform lower risk assets for the last like three and a half years we've seen Bitcoin outperform most
28:00 - 28:30 everything else in crypto and again I'm not I don't really think Trump cares about what's going on with altcoins but what I'm saying is you know in order to get into sort of that different monetary policy regime you have to induce pain and this is the pain you know this is the pain what's not clear is will this pain lead to sort of a more prolonged recession or will it just be kind of like a 1987 style drop or you know a a 2011 style drop where
28:30 - 29:00 the market just simply recovers and basically in 2011 the market had a pretty steep drop as well right here where it dropped about 20% and then that was it right there was no recession that was it so that's why I'm saying like you know as the market is close to that 20% drop I don't think you can just like scoff at it and say that you know it's not a meaningful drop because I mean it is if you look at like if you look at um
29:00 - 29:30 the uh sort of the natural log of the price for the 20week moving average for the stock market and you look at at how deep this is below the 20week moving average like there's not that many times in history where it reaches this level right I mean so you know it's actually what's really fascinating is that the stock market has dropped below the 20we SMA more in 2025 than it did all of 2022 because the 2022 drop was more structural it was like a structural drop this has just been like
29:30 - 30:00 a crash okay now obviously the pandemic crash was worse the 2018 crash wasn't as bad as what we just got right now um kind of similar again 2011 brings up that 2011 drop and then of course you have the financial crisis and then you also have what happened during the dotcom crash so like these drops like when you see these drops there will very likely be a massive at the very least counter trend rally whenever the rhetoric softens up and the data comes
30:00 - 30:30 in and maybe it's not so scary timing the exact bottom is is a fool's errand i don't think you should try to do it i'm not trying to do it it it's really hard to do that kind of stuff so you have to be careful i mean a lot of people you know I was I was out of town and I I saw a lot of people calling the bottom on the stock market all week long and then it just kept going lower and and it's it's hard i even told people on ITC Premium last week before I went out of town i'm like "Guys next week's probably going to suck because I'm going out of
30:30 - 31:00 town." And it's sort of a joke because it seems like every time I go out of town the market tends to dump like crazy and and the stock market dropped 9% last week um which is you know pretty historic right it doesn't drop that much that frequently and it also goes to show that like there's always a narrative for every outcome like we had an inverted yield curve in 2019 and then we got this crash right here right and then we had an inverted yield curve in 2023 and 2024
31:00 - 31:30 and then now we're getting this crash like there's always and and of course people are going to blame it on tariffs i'm not saying they shouldn't but I'm what I'm saying is there's always a reason that it that that sort of sets it off we never know what it's going to be but then there's this reason and the sort of a famous quote I I think I've said is like you know bull markets I don't I'm going to butcher the quote but it's basically bull markets don't just end on their own right they're murdered by something and this time obviously you could say this one's murdered by tariffs uh but it kind of sets into motion some
31:30 - 32:00 of the things that we've talked about right like the idea of ETH going home the idea of what needs to happen for the Fed to go to lose your monetary policy and you're seeing that happen right now now I don't know like I haven't been following the Fed for the last week i know i'm sorry i'll try to be better i was just out of town doing other stuff um but I don't believe they've given really any clear indication that they're planning on pivoting just yet um if the stock market goes down I mean
32:00 - 32:30 if it sweeps this low I I don't know like you you it's almost a game game of like uh chicken like who's going to who's going to cave first right like will will will the sort of will Trump relent some on tariffs uh to allow some resilience in the stock market or will Powell relent on um rates and and come to sort of the rescue to try to help risk assets out it's it's really a tough
32:30 - 33:00 call but I I I could probably show you many examples as like why this is not just entirely related to to tariffs um although I do think that has a a very strong contribution part like I'm not saying there's no effect of tariffs but I do think a lot of this was being set up previously for instance if you look at um uh the overnight reverse uh repurchase agreement right if you look at the uh reverse repo one of the things you'll notice is that a lot you could
33:00 - 33:30 think about it is like there as this was dropping throughout 2023 and 2024 you can kind of think of that as putting liquidity back into the system so you could almost argue that the markets continued to do well in 2023 and 2024 because of all this liquidity right $2 trillion that was pumped back into the markets but now if you look here right i mean Trump took office here right so all of that
33:30 - 34:00 liquidity that once existed you're talking about 2.5 trillion January 2023 when Trump took office this was at 120 billion so you basically had like two trillion drained over those two years so there's not as much to work with now so again it's one of those things where like had the tariff discussion occurred over here the market maybe wouldn't have
34:00 - 34:30 cared about it so much but the market arguably is in a much more fragile state now right like if you look at the unemployment rate and you overlay it on this chart like the unemployment rate back over here in in 2023 and 2024 didn't look nearly as bad right but now it's kind of up at its higher levels it's starting to go up even higher you know liquidity is a lot lower all you know Bitcoin dominance is a lot higher you have all Bitcoin pairs which
34:30 - 35:00 continue to go lower right a lot of that liquidity has been slowly removed and and I I mean I think inflation is eating away at people's savings and whatnot and so the market can then overreact uh to certain things that maybe wouldn't have been as bad had it happened during another phase of the cycle but because it's happening when we've had higher for longer for two to three years right and we've seen the reverse repo get drained $2 trillion over the last couple years
35:00 - 35:30 it kind of sets itself up for that perfect storm and really I mean it goes back to what we talked about back in February was to expect weakness between uh February OPEX and March OPEX that could then extend into midApril given the tariff and inflation uncertainty and you might think well there's no way you could have thought it was going to drop 20% but in reality I mean that's actually exactly what we talked about because we we talked about this exact move by the S&P divided by M2 because
35:30 - 36:00 this ended up being about a 20% drop which is exactly what we've a little more than 20% so it was even worse than what we've currently seen right it's about a 23 to 24% drop and it happened over two months right this was uh you know mid to late July to then like mid October so it's about a two-month u I guess a three-month drop um let me let me get it exactly i I think it was like 11 weeks I think um it was about 11 weeks but the bulk of
36:00 - 36:30 the drop occurred in in about a month and a half right the bulk of the drop occurred in a month and a half but technically it it didn't um really bottom until 11 weeks later now if we look at it over here right in in sort of this business cycle and see how long this drop has occurred uh if we get this exactly right so if we take it from the high um here it's been about 6 weeks 11 weeks
36:30 - 37:00 would actually put you out in early May which is kind of longer than I'm I'm sort of thinking um unless it's a wick right and often times what we've said before is and I could easily see this happening this year because a lot of times people Well sell a man and go away but a lot of times when you sell off before May um you then can get a rally sort of going into the into the summer months actually same thing happened to the dotcom crash right we saw a rally counter trend rally in sort of like the May to August time frame crash in like March and April then a
37:00 - 37:30 counter trend rally in um sort of like midappril to August and then and then the recession was obvious right and that was basically it uh for the cycle so with Bitcoin you know I mean the way I see it right now is that if it can get a weekly close above the bullmark support band um that would I mean that that would be something right like that would be a
37:30 - 38:00 step in the right direction but even then you still need multiple weekly closes up there for it to really regain that structural support even in July of 2024 right when it had this drop it did rally back above it but and then it just lost it and then put in a lower low so I guess I I guess it's the uh sort of the cynical side of me showing again uh but I don't know when when I when I've sort of seen these discussions with with the stock market and with Bitcoin and
38:00 - 38:30 when people say like Bitcoin's holding up way better than the stock market usually that pre precedes Bitcoin then following the stock market it could play out where like the stock market bounces Bitcoin bounces and the stock market then sells off again and then Bitcoin sort of is unable to hold on sort of another drop by the S&P but for now it's getting rejected by the 21week EMA yes there's a death cross coming up normally there's some type of counter trend rally at the very least on the other side of the death cross it does not have to be
38:30 - 39:00 immediate but usually on the other side of it could be a week later could be two weeks later if it's like 2021 you know it could be a month or two later um you know if you go back and and we sort of remind ourselves what happened in 2021 right you had a death cross in June and then you didn't really get a count a big counter trend rally until a month later right it was exactly one month later so that would correspond to potentially early May right and that would actually line up with the S&P Divide by M2 11we drop that would also
39:00 - 39:30 line up with with early May so that that continues to stick in my head um I would honestly be very surprised if Bitcoin got out of this with at least retesting the 2024 high um it seems like a likely outcome at the very least so I'm still leaning in that direction for now and also of course I mean I I do think that you know a lot of this helps with Ethereum sort of the view with Ethereum
39:30 - 40:00 and that is Ethereum going deeper into the logarithmic regression trend line which is what we've talked about when you think about you know when you look at at interest rates minus the 2-year yield we talked a lot about this idea that you know this move that we've had i mean it obviously lines up with the financial crisis but it also lines up with 1989 to 1990 where you had this recession right here where the stock
40:00 - 40:30 market only dropped about 20% but the reason why I bring that up is because if you go look at the stock market in 1989 to 1990 it had sort of that triple top right it had that triple top and um and then it had a lower low and that lower low was the recession right so like there's a chance that you get a recession uh but by the time it's declared the low is already in um and would have been in for for quite some
40:30 - 41:00 time in that scenario but if you look at this chart right we've talked about this a lot you have a high you have a high and then you sort of have a you know you sweep those highs you have a low a lower low and then that final lower low was the recession low and so when I look at Ethereum I I just wonder like is it going to play out the same way where you have uh and some people say I should use a different exchange that is you know not doesn't have those wicks uh to the same extreme but you know does it play out the same way where you have sort of these lows you have a low a lower low and that final lower low is the
41:00 - 41:30 recession low where it then goes deeper into the logarithmic regression trend line for Ethereum right right and I I just go back to that idea and I know a lot of people say "Well I shouldn't be comparing it to 1989 1990." But it still seems like you know it still seems somewhat relevant and Ethereum is only a couple hundred away from sort of being quote unquote home right it's around that $15 to $1,600 milestone for
41:30 - 42:00 Ethereum to be home and this is exactly what's happened every cycle is that it it it goes home i think the biggest lesson for everyone is that this is one of those things where like it it doesn't always happen when you think but it's something that does tend to happen right like it doesn't always have to be like the pre-h having year or the having year or you know or or the um you know posth having year but it it does tend to happen right and this is the first time where we've seen it
42:00 - 42:30 happen in the posth having year so but the process is still playing out and this is the same process we saw over here in 2019 right you break down you go lower you get some type of change in monetary policy and then ETH Bitcoin starts to do well but you could argue that ETHUSD is just sort of doing what it did back over here where it goes into the regression band and then it just kind of slowly bleeds down and even for a while there was some strength there but eventually it did give way and go
42:30 - 43:00 further into the regression band so I continue to think that um you know these are relevant comparisons even though they seem somewhat abstract like why look at what happened in 1989 to 1990 i look at it because it's the optimistic view because the other view through the lens of interest rates minus 2year yield the other lens is a financial crisis and I'm not rooting for that right i think that would be very bad not only for crypto but just for the entire US economy and I don't want to see that
43:00 - 43:30 happen i I would prefer for the sell off to just be 20 to you know 20 to 30% but I also you know I know that like there's always a chance with the stock market that you do sometimes get these like left translated cycles where the peak occurs when you have a new administration take over right i mean this is what happened in sort of 1969 this is what happened in 1973 is that you had these drops just as a new administration took over but I think the
43:30 - 44:00 biggest difference between those drops and this one at least so far is this drop appears more like a crash and kind of like an engineer crash these drops were a lot more sort of structural right they just sort of slowly went down in fact let's see how long it took for the S&P to even drop what is it like 17 18 i think the stock market's down 18% like how long did it even take the stock market to drop that far i mean maybe I'm
44:00 - 44:30 wrong maybe it happened sooner than I'm thinking um no i mean that was like an 11% drop in fact from when it from when it topped out here in um December of 68 for the market to drop I guess I need to go to price and date range here so for the market to drop 20% it took about 30 well I guess right here right and yeah I mean it took about 36 weeks 35 weeks this drop has occurred in like
44:30 - 45:00 6 weeks and then if you look at the next cycle the amount of time it took to get a 20 well I guess it was what 18% drop uh it took about about 33 weeks again so you're you're talking about over half a year for it to get a similar drop so like I'm not even entirely sold on this comparison just yet because it I mean it seems a lot different in in terms of like the way it's dropping it's not it
45:00 - 45:30 it doesn't look like a um you know like what you saw back then exactly it just looks like a like an engineered crash right i mean just that's what it looks like um and the biggest question is whenever the counter trend rally occurs right whenever it occurs does this do too much damage where it then induces a recession and that's why I hope that we
45:30 - 46:00 don't you know that the market doesn't really get more than it bargained for you know I think there's this idea that like oh you know monetary policy can come to the rescue and that all will be fine but again it's lower stock prices that lead to layoffs so what's happening right now in the market is very likely going to lead to layoffs and those layoffs might not become obvious until later this year there's still a few levers the Fed can pull they can always lower rates and they can end quantitative tightening they're probably
46:00 - 46:30 not going to start QE just yet pal said they're not going to start it until interest rates are back at zero they're obviously a long way off from that so we'll see what happens there but um those are just my thoughts on the market i And honestly like over the next few days I'll probably present other ideas as well i've been out of the loop for the last week i've loosely followed the markets uh there's some things I haven't even fully followed that closely so I'm just kind of like looking at the charts trying to figure out what's actually going on but the stock market's down a
46:30 - 47:00 lot right now there's only been a few times in history where it it's dropped this far below the 20week moving average so you at least have to pay attention to that there will likely be at the very least a counter trend rally uh sometime later this spring whether it resolves to a lower high or a higher high will ultimately depend on you know if if this crash leads to sort of a negative feedback loop with layoffs that lead to lower stock prices or not hopefully things remain more optimistic
47:00 - 47:30 right hopefully things remain more optimistic um but you know I just with Bitcoin with Bitcoin I I I can't help but wonder you know is this is this just kind of like a lot of the other times where people are like "Oh Bitcoin's holding up better." And then like a week or two later it then just does the same thing and everyone's like "Oh it's not actually it was just delayed." Um to me that's what's going on but anyways guys we'll wrap it up there thank you guys for tuning in make sure you subscribe give the video a thumbs up and again check
47:30 - 48:00 out the sale on Into the Cryptoverse premium at into the cryptoverse.com i'll see you guys next time