When the Ai bubble pops, Bitcoin will do this. (SPY vs Bitcoin Cycle Study)

Good morning everybody. Today is

February 4th at 9:22 New York time and

today we're going to be giving an update

on Bitcoin. What is going on? Where is

it going? And also we're going to be

talking about what a stock market

breakdown. So the stock market going

into a stage three or stage four and how

that affects Bitcoin. So we're going to

be showing some charts and doing a

little deep dive on that.

So, previously

last on the Bitcoin episode, we were

talking about over here we had this uh

big reversal extension and we said,

"Hey, this a reversal extension.

This might not actually be the actual

reversal extension." And the reason we

were saying that is because the volume,

if we're looking at the volume, it did

not have a a high capitulation. there

was not a high capitulation here. Yes,

if we look at some of the onchain data,

we were saying, you know, based on the

onchain data, we could look at the

liquidation volume and we could say,

hey, well, based on the liquidations

that happened on this day, it was uh 288

um or no, I'm sorry, it was over 500

million in liquidations here. And we

could say, okay, well, over here on 21

November, it was about 500 million in

liquidations. So 21 November, if we look

at 21 November, which was right there,

we could say that was 500 million and

over here was 500 million. So maybe it

could be the same where this was the

capitulation, you know, this was the

reversal extension and then it

continues. But here here's the problem

with the onchain data and how you can't

just rely on onchain data is that the

volume

did not was not as significant. You

could see over here there's a clear very

sharp spike in volume on this day, but

over here there was this volume was not

there. The reason why there might not

have been as much volume

over here is because the buyers, just

look at the buyers. The buyers did not

step in this time. The buyers over here

really tried to hold hold the floor and

they said, "Okay, we're going to drive

price back up." And then we went into

this sideways uh chop price action until

we eventually uh until we eventually hit

the 365day moving average and then it

got rejected and the trend said no we

want to continue going down

and um and yeah and that's where we're

at. So over here there was no buyer

stepping in. buyers did not step in and

we can also look and see based on all

the volume the onchain data of the

volume that that the buyers are just not

stepping in. This one I need to update

but uh if we're looking at yeah futures

the future the the market is primarily

futures based and we can see that the

futures volume is definitely decreasing.

If we look at 21 November, we could see

that 21 November time frame. Yeah, the

buyers and the buyers were and were

still there. Buyers were still coming

in. They were saying, "Okay, we're going

to buy the floor. We're going to buy the

floor."

Buyers aren't there this time. They're

not They didn't show up. So, what does

that mean for Bitcoin? Well, if there's

no buyers and there's more selling

pressure, then the price just continues

to drop.

How low can it drop?

Well, the first obvious answer is we're

going to break through the 74k major

support. We could see that price is

trying to hold this area, but it's not

it's not holding that well. We could see

increasing volume on the downside,

increasing volume over here. This is not

this I would not consider this a

reversal extension either just because

this is this is for the reversal

extension. You're going to see a clear

sign of a major capitulation. Like if we

go over to the spy for example, that's

the reversal extension over here. This

is the reversal extension. You can see

clear clear volume coming in and holding

that. And then there's other areas where

there might be um these reversal

extension type plays like right over

here or over here where it's just okay,

people are really trying to buy the

bottom, hold holding that level of

support. But that that's just not really

the case over here.

You know, maybe you could argue that

that uh yesterday, but

I I you know, just based on

just based on on where you know, the

buyers just aren't stepping in based on

the previous volume

and uh how it's breaking down based on

the social sentiment. Um you know, the

sentiment is just not there. It it

really does seem like we are going to be

going to the uh 200E moving average.

Could we go even lower though? That's

the thing. And there's a case to be made

that we could be going all the way down

to

even the 30K range. 30K, that'd be wild.

Everybody's talking about, you know, 68K

because it's the 200 week. And they say,

"Oh, when price breaks the the 100week

moving average, then we have, you know,

historically it it it goes down to the

200 week." So, people are trying to buy

the 200 week and hoping that this is

going to hold. but a breakdown of the

spy and that's what we're going to be

talking about next

and how Bitcoin typically leads the

market and you know how that's going to

affect Bitcoin.

There's there's a case to be made that

we that the 200 week you know we're not

that far from the two 200 week look how

far we are 10% another 10%

you know from from over here to over

here that's over 20%. you know, so we we

were just here we were just we just went

down 20% in the past less than month. So

the 200 week is not that far. But if

you're trying to buy the 200 week and

saying, "Okay, well price is probably

going to reverse now

that that that that might not be the

case." And and we're going to be talking

about the reason why in in just a moment

here. So but why why am I saying that we

could even go down to the 30k range?

Well, I mean, if we're just talking

about some some these different areas,

look how look how little time has spent

in in this range between the 45K

and

40K. Like once we get to the 50k, once

we get to the 50k range,

you know, we we vary, you know, to get

from to get from

the the 200 week down to the

Don't know why phantom's pulling up.

Hopefully, nobody's trying to hack into

my account.

To get from the 200 week down to the uh

bottom of this range, the the 53K, 22%.

That's that's really that's really

nothing. And if we are going into a

stage four, stage three, stage four

decline in the in the spy and the in the

market QQQ,

then uh Bitcoin can continue to go down.

So let let's pull up let's pull up some

um some chart and see what I'm talking

about. So Bitcoin is a risk on asset. If

if the environment is not risk on and

it's risk off, Bitcoin is not going to

do well. Bitcoin is also a leading

indicator though of where the market

sentiment is trying to go. So, Bitcoin

will typically lead the spy. It will

also lead the spy in its its

uh downturn. So, first, you know, first

we're looking at where where the spy is,

where Bitcoin is. So over here

we can see this is this is the spy. I

have the spy pulled up.

I have the spy pulled up

and you can see Bitcoin started its

stage four decline

right over here. So for November, we're

looking at Bitcoin

over here around 34 November. This is

when it started it stage four decline.

It started at stage 4 decline because it

cut down below the uh 200

the uh 200 day with significant volume.

Right there you can see the volume. So

that was the start of the stage 4

decline and you can see that Bitcoin has

been declining since while the spy is

failing to put in some some strength.

You can see that the two the 20-day and

the uh the 20-day and the 50-day are

slowing down. They're starting to go

sideways. We can see that the breakouts

are are not breaking out very well. It

is starting to chop and consolidate.

And what typically happens when the

market just goes into this area of

distribution that the spy, you know, has

really started this distribution

right around over here. This is when the

spy really started to get into this

distribution area.

So,

but when this when after distribution

after distribution comes a stage four

decline. So like over here we could see

the SPY started distributing over here

tried to make some new all-time highs

wasn't able to and then it breaks down

and it breaks down below the the the the

200 day

and Bitcoin just continues to collapse.

You can see Bitcoin started its move. So

over here in this example over here

where we are currently Bitcoin started

its stage 4 decline

prior to

prior to the spies distribution

and it continues to be in a stage four

decline while the spy is starting to

really uh show more of that distribution

signs.

Over here we can see we can see over

here even even on this shorter term

uh we saw that the spy

spy put in a short-term uh you know a

shorter term stage 4 decline but bitcoin

was also in distribution prior to that

that decline

and bitcoin also had a pretty pretty

pretty nasty move

during this period didn't go into a

full-on stage four decline but you know

that that was some definite distribution

ation. It was it was a more of a

momentary

reset. But if we go over here,

this is the this is 2022. We could see

what Bitcoin was doing in relation to

the spy. We can see over here, Bitcoin

was in it did a did this stage two

rally. It started to distribute over

here. And then right here you can see

Bitcoin on 6th December 21 started its

stage 4 decline.

6th December 21.

6th December 21.

Right around there

started at stage 4 decline. it started

failing and the the the 20-day you can

see the resistance on the 20-day and the

50-day and then it declines below the

200 day and then the 200 day becomes

resistance and it and it it does this

very very sharp decline

right over here you can see Bitcoin

started its decline prior to prior to

the spy in its stage four decline spy

started its stage four decline right

about here when it broke down below the

200 day. But the spy was also starting

to go through some distribution right

over here. You could say that this this

really started more so the distribution

area for the spy because it is started

breaking down. It tried to rally up,

breaks down again, finds finds some

support, but you can see the

distribution volume coming in on the

spy, tries to break out, isn't able to

make new all-time highs and just

collapses, collapses, collapses, and

then the 200 day starts to act as

resistance. And Bitcoin,

Bitcoin during this whole period while

the SPY is is breaking down, Bitcoin is

also breaking down.

You can see that the spy comes up to the

200 day and then it starts to form this

shortterm

stage stage 1A. You can see that over

here the stage 1A is forming. It's it's

testing the 200 day. it's not able to.

It's not able to make a a serious

breakout attempt and then it

consolidates and then and then it starts

to make a move. But then there's one one

more flush out and then we get this this

big this big move that we've been on

for, you know, over a year now.

And that was this that was that was the

the the was the clear stage two uptrend

was from right here. This was the stage

2A area over here. This is stage 1 A.

But we could see what Bitcoin was dur

doing during this time. And Bitcoin was

in a stage four decline. Bitcoin started

at stage one

at stage one while the spy was

was still in its stage four. SPY was

testing the 200 day. It got rejected.

Could it have gone lower? It could have,

but it found some support here. And then

what's interesting is we can see Bitcoin

started its stage two uptrend while the

spy was in its stage one while it was

starting to test. And you can see that

the move for Bitcoin, you know, then it

went into this little distribution area

over here. So Bitcoin went into a

distribution, it went into another

distribution, but it had some pretty

nice moves and it and it started even

breaking out.

Bitcoin really started its move

a little bit prior to when the spy

started taking off. You can see the

moves that it started to make that put

it into a stage two while the spy was

still in a in a stage

stage 4 stage 1A. If we go over to this

area, this is the 22 December.

You can see over here, this is these are

the moves that I'm talking about right

over here. And the reason why Bitcoin

went into a stage 2A is because it

breaks out above the 200 day. It pulls

back. It tests the 200 day. It finds

support. And now the trend is saying,

"Okay, the trend has been found. We have

found the we have found support. We we

know where we want to go. The 200 day is

acting as that support. Now we want to

go higher." And that's one of the one of

the one of the indicators of a trend

reversal is the 200 day acting as

support. You can see the 20-day 50-day

all pointing above the 200 day and then

the 200 day continued to act as that

support. You can see the 200 week came

in acted as support over here in this

area and then the trend just continued

higher.

See if we can find any any any more any

more examples

over here. Here's a here's another stage

four decline in the spy. We're on the

spy again. Stage four decline. Look at

that. Bitcoin Bitcoin was in a stage

four decline

prior to

prior to

the spies stage 4 decline and Bitcoin

continued its stage and that's another

important factor. Bitcoin will continue

its stage four decline while the spy is

in its decline. the Bitcoin will start

to move and you can see over here right

over there again Bitcoin started to move

prior to the end of the Bitcoin of the

spies stage 4 decline but it it wasn't

it didn't start well before it didn't

start prior to the stage four it started

right towards the very end of that stage

four spy decline but Bitcoin will always

typically enter into its stage four

decline prior to the spies stage four

decline. And then Bitcoin again will

start at stage at stage two uptrend

prior to the spies stage two uptrend.

We go over to here. That's 20 around

this is the the March March 20 time

frame. So if we go over to the March 20

time frame, that's right over here.

Right there. Bitcoin has

massive reversal extension and then it

just starts it just it just breaks out

the move. It starts respecting the

short-term moving averages and then it

goes above the 200 day consolidates for

a little bit, breaks out of breaks out

of the the the long base,

breaks out of this uh you know over a

year-long brace base and then it just

breaks out

breaks out and you get you get that you

get that massive move from Bitcoin

that puts in over 400%.

Are there any other any other examples?

Right over here. Right over here. Look

at that. The spy is in a stage three

distribution.

You can see the distribution happen over

here. That's the start of the stage

three distribution again on the spy.

SPY is distributing. It's not it's going

sideways. It's not really making any

moves. What is Bitcoin doing? Bitcoin is

in a stage four decline from February 18

all the way through here. And you can

see again, Bitcoin's in a stage four

decline while the spy is in a stage four

decline. And then would you look at

that?

Bitcoin starts at stage

stage one basing prior to

the trend change

of of the spy. Now granted in this

example, let's see over here, this is 18

December through 1 through 1 April. So

18 December through 1 April. If we just

go over to here

18 December.

So right over in this area you can see

over here

to around 1 April Bitcoin is going

Bitcoin is is forming the stage one this

stage one base. It's it's testing the

200 week. It's unable to break above the

200 week. But then as soon as price the

price contracts you can see the

volatility contracting. You see volume

dropping down. Volume is dropping as

price is starting to contract and and

and wedge higher up to the 200 week. And

then it does this wedge pop of the two

of the 200 week and it just breaks out

with a massive 30% consolidates. This is

the continuation buy and then it breaks

out again.

So,

and you can see that Bitcoin really

started its move prior to

SPY really getting into its stage 4

uptrend.

You know, it tested the 200, you know,

and the reason is because SPY will come

down and typically test the 200 week and

then it'll find some support and then

it'll break out. Now granted, this was a

kind of a weird a weird market for the,

you know, weird time for the spy, but we

see this just time and time again, time

and time again, we we see we see these

moves happening.

If we go back to

if we go back to uh even even 20, you

know, we could go back to 2014,

spy starting to get a little bit get a

little bit more choppy.

Bitcoin stage four

spy in a stage three distribution very

clear distribution with a with a

sideways price action sideways moving

average sideways 50-day

Bitcoin is stage stage 1A

or stage one spy gets into a stage four

Bitcoin

Bitcoin right over there Bitcoin stage

Stage two. Interesting.

This is 15 November 16. Now, now

granted, we are we are going pretty

pretty far back into Bitcoin where there

where there was just not there wasn't

that much going on with like there was

not a lot of people um you know, Bitcoin

was was relatively young, relatively

young at the time. I think this is

around the same time that I actually

bought my first Bitcoin. I sold it for a

$30 profit. So, should be listening to

me for advice.

But so yeah, so I hope I hope that that

this deep dive of showing you example

after example after example, nearly

every single example of showing you how

the spy how Bitcoin reacts

around the spy um helps you to see what

can happen. And and that's going back to

the original the original point that I

was making of why why we could very why

we could very easily see a a much

deeper decline.

And the reason is the reason is because

the spy,

you know, because because what we were

just talking about how Bitcoin leads and

Bitcoin will never start a stage two

uptrend prior to

prior to the spy going into a stage

three, stage four. Bitcoin will hold its

stage four decline up until the point

that the spy starts its stage two

uptrend. So it'll it'll happen right?

It'll happen a very short period before.

Now again I'm not a theorist. I'm not

trying to or I'm not a you know I'm not

a a theorist that's saying you know oh

you should be buying based on this. It

Bitcoin could go down bit Bitcoin could

Bitcoin could just go down to the 53k.

It could go down to here. It could go

down to here. Could could maybe maybe it

goes even lower. Maybe it completely

blows past and goes down to 15K. I don't

know.

I don't know. But what I do know is that

we can look at the chart and we can read

the chart and we can say based on what

the price action is doing now, where is

Bitcoin most likely to go currently and

next and when is the trend starting to

change? And that's why that's why I I

keep on preaching stage analysis. It it

it is the most reliable

it's the most reliable way of analyzing

what is actually going on with Bitcoin.

And if you are just if you're just

trying to speculate based on the 200

week, the 365 day, the 100 week, if it

breaks down below the 100 week and it it

has to go to the 200 week, you know, all

of these theories, the four-year cycle,

um you know, the the global liquidity,

all of all of these all of these

theories

or, you know, or or ETH needing to go

home.

All of these theories, they are not

going to reliably tell you what is what

is going on

in in the markets. But what will tell

you what is going on in the markets is

stage analysis is looking at price

action. All all you need all you need to

know is right on the chart right here.

volume,

volume,

moving averages,

technical setups, you know, the these

these these consolidation areas.

Price moves in a stair step on the way

up. You know, it it uses the the

escalator up and then it typically takes

an elevator down and then it'll find,

you know, some sideways action before it

starts stairstepping up.

That's just how price works. And you

don't you don't need to theorize

uh to try to try to try to time the

bottom and time the top. You can you can

time the top and time the bottom based

on what is happening with price and how

and how you see it how you see price

moving. So, and that's what this channel

is about. That's what I like talking

about. I like I I I I really enjoy stage

analysis. I enjoy crypto.

So, hopefully this is a fresh take for

you. Um,

hopefully you stop listening to all

these influencers that are are are

basically just

glorified fortune tellers because that's

how they make their money is by trying

to predict the future. Uh, I'm not

predicting the future.

I'm not predicting the future. I'm

telling you what is happening right now.

Where are we going? What's going on?

and

you know make of that as you will. So,

yep, that's about it.