The Crypto Flash Crash | What Happens NEXT

why did crypto just get reamed and when

will the pain end when will crypto go

back to a euphoric rally that is what we

identify and address in this video so

mark your calendar because it's a big

deal and it's coupon expiration day

today congratulations man you have done

so much people love you people look up

to you Kevin path right there financial

analyst and YouTuber meet Kevin always

great to get your take Bitcoin just had

a substantial crash it crashed over 11

before slightly recovering we had

massive Liquidations in just the last 24

hours we are over 1 billion US dollars

worth of bitcoin and ethereum liquidated

over 177

000 Traders liquidated at least with

some portion of their portfolio this is

the first time we actually have seen

Bitcoin under 26 000 in two months

now fortunately once we broke under 26

000 we did end up getting some immediate

buying pressure but questions are now

Rising as to why this sell-off occurred

in this video we're going to break down

at least four different reasons and then

we'll look into some ta and what may

come next the first and most popular

reason that people give which may not

actually be the best reason I personally

don't think it is either

has to do with SpaceX let's cover what

the Wall Street Journal just covered

regarding SpaceX and it'll give us some

insight and to keep it short for you I

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right folks what do we got here so talk

about spacex's financials is all the

rage because of the mention of crypto

first worth noting in the last three

months based on potentially final or

maybe preliminary numbers Wall Street

Journal isn't really sure maybe space X

actually made about 55 million dollars

of profit on 1.5 billion dollars in

Revenue in just the first quarter which

it's actually kind of neat that the

company that is worth about 150 billion

dollars is potentially trending towards

profitability especially since the

revenue has doubled but their expenses

have also been increasing rapidly the

revenue just eeked out a slightly better

gain the problem though came really at

the end of this article and it's right

here the documents these financial

documents also show that SpaceX wrote

down notice this doesn't say sell it

says wrote down wrote down the value of

the Bitcoin it owns by a total of 373

Million last year and in 2021 they had

sold some of the cryptocurrency Tesla

has taken a similar approach with its

Bitcoin Holdings and obviously we know

that Elon Musk talks a lot about crypto

online now it's worth noting that yes

Tesla did sell they bought a lot of

their crypto still right around thirty

six thousand sold about 75 percent of it

back in Q2 of 2022 but we don't know

that SpaceX actually sold however right

when this article came out and news of

this potential write down of crypto

started circulating which could be an

accounting way of just recognizing a

loss individuals started selling crypto

maybe it was individuals or institutions

or algorithms or whatever it was this

was the selldown we got it was pretty

clear and pretty rapid now there was

other news though that happened at the

same time which I think has more bearing

on also the potential future price of

Bitcoin let's understand that at the

same time as the news came out on SpaceX

we heard that evergrant has finally

declared a chapter 15 bankruptcy chapter

15 is a bankruptcy for a foreign entity

going bankrupt and it is a petition that

you file in the United States four

assets exposed to well basically people

and assets in the United States there's

about 19 billion dollars of

restructuring required for evergrants

offshore debts would be one of the

largest chapter 15 restructurings ever

and what's important here is that we

already know evergrand is a defunct

company they have been for the last two

years so this is really more of a

formality at 40 percent of property

developers in China have already

defaulted or missed a payment so this

isn't really a massive surprise but when

you combine this chapter 15 filing with

news that maybe SpaceX is writing down

its crypto institutions or potentially

algorithms or individuals started

considering their exposure to bitcoin as

maybe a risk asset now a lot of people

are going to look at that as a buy the

dip opportunity but you have to consider

this even though crypto is banned in

China the people of China tend to use

crypto to hedge against the devaluing of

their currency that you won and minby is

the currency system what's Wild here is

that ordinarily you would see and expect

more buying of crypto during a Yuan

weakening cycle but that's not what

historically happens the last time the

Yuan was devalued substantially in 2015.

Bitcoin fell by more than 23 percent

so that could happen again in other

words stress in China could lead to pain

for all risk assets consider that the

Hong Kong stock market just fell into

bear Market or a bear Market territory

again basically falling straight since

January and finally entering a bear

Market again that is we had hope that

China would recover strongly we had some

Revenge spending in January and

everything was going great in fact

people in America thought China was

going to cause inflation for the world

again but what ended up actually

happening was that spending didn't last

in China and now China is probably in a

deep dark recession but that's more for

a different video in the depths of the

Chinese problems what's worth noting

though is that Chinese individuals could

if they wanted to limit their risk and

get away from something maybe as

volatile presently as Bitcoin they could

buy U.S dollars now a lot of people know

this and this is the smart thing you

should be thinking of is wait but what

about Capital controls true there's a

limit of 50 000 US dollars that you can

buy per year in China that doesn't

affect though 99 of Chinese potentially

even 99.9 of Chinese 50 000 USD is a lot

of money every year that you can buy

especially if you're buying those

dollars in China you're not buying them

to to spend them right it's not like

you're taking all your money to spend it

it's like a savings account almost

Chinese do this we don't know how many

do this obviously these numbers don't

get published but there is a belief that

when China's economy goes to crap people

do whatever they can to hedge and they

hedge with the strongest

least volatile currency that presently

exists and I hate to say it that's the

US dollar and I I recognize that in a

crypto video the last thing we want to

say is say that Fiat especially the

dollar is some kind of Safe Haven but

that's at least the way it's seen right

now especially in China certainly less

volatile than crypto at least at this

point hopefully not for the long term uh

and it is a hedge away from that

devalued Yuan remember China is going to

have to stimulate to prevent their

economy from going into a depression a

deflationary depression but the more

they stimulate the more they weaken

their currency unless they can get

productivity growth up but China's

basically destroyed productivity in

capitalism because they don't know how

to run well a country anyway again

that's a topic for a different video

point being if you're someone in China

you might be thinking okay do I want

exposure to risk assets right now when

we're going into a Chinese these bear

Market potentially Global bear Market or

recession or do I move to US Dollars

where if we're going into a recession

maybe the dollar is the strongest of all

of the weakest stuff especially since

gold hasn't been too useful and it's a

little harder to get your hands on

anyway okay there is some other news

though okay so number one SpaceX number

two evergram we did get some plus and

minus news with the SEC we heard on the

plus side that the SEC is probably not

going to reject an ethereum Futures ETF

keep in mind Futures are contracts

they're not actually coins however the

SEC is planning to delay any kind of

Bitcoin spot ETF response until at least

2024. a convenient election year now

another thing to consider is of course

is Bitcoin just being a market follower

rather than a trendsetter and it is

possible that the signaling of Hong Kong

going into a bear market and the SpaceX

write down is just another way of

reminding individuals and investors and

institutions of the macro pain of Jerome

Powell's hire for longer regime that's

very likely it's very likely that macro

in terms of higher for longer rates put

pressure on risk assets and

unfortunately Jerome Powell's potential

overdoing it could end up hurting all

risk assets stocks and of course crypto

now expectations are still starting to

gear up that we might be looking at a

rate hike in November what we really

need is that to get unpriced to really

start expecting a new bull market cycle

so if we start unpricing more Fed rate

hikes and we go to Fed is done or pause

then yields can fall all and we could

actually expect the FED not to Joint our

chain again okay now when we jump over

to the technical analysis aside from one

more time taking a chance to remind you

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down below what do we know well we know

that we've had these downtrends before

the last downtrend we had was obviously

between the banking crisis where we

actually saw a rally during the banking

crisis and the following of the banking

crisis which led to this downtrend

turning into a nice rock it up

unfortunately this current downtrend and

that's the problem with breakouts is

unless we have a convergence up or down

we don't exactly know which way that

breakout is going to go we just had a

breakout to the downside one thing that

I noticed from a TA point of view is

that we did just break this longer term

Trend that has been occurring since

about Christmas time this is roughly

that same Trend that we see on the

NASDAQ and if we jump on over to the

NASDAQ we go out to the day chart we're

going to see that longer term Trend

we're actually Falling Towards that

longer term Trend so it's very likely

that we're going to be at that 348 on

the NASDAQ again that's our longer term

Trend my belief is that there's a good

chance we're going to fall towards this

longer term Trend we'll get our Jackson

Hole Summit and we should actually see a

recovery to this longer term trend line

back to about 28 000 that FIB level at

28 000. I think we're going to Trend

back to this now keep in mind you've

also got the company selling off a like

Riot or Marathon some pretty large

sell-offs here you can see we got reject

did uh we didn't really get super close

but we did get rejected by roughly that

2180 line which was pretty important

previously and then if we go on over to

HUD 8 another one a lot of folks are

looking at we can see that rejection

again over here not as much respect for

that three three seven line as we've

seen uh in in you know years past but

also quite a bit of a correction here so

what does this mean for the future well

I think that we got a little bit more

bad to go at least on those Tech indices

got to get through Jackson Hole if we

can get some kind of positive talk that

macro is going to be less bad you still

have the weight of China pushing down

the crypto Market especially as Chinese

potentially favor I know it sounds crazy

but USD over the riskier assets at the

moment just as a safe haven as they get

through their recession

we should be seeing some sort of

recovery though once we get some more

confidence from j-pal now

are we going to get Confidence from

j-pal well that's the big you know 20

question here maybe 20 trillion dollar

question here I get comments every

single day about people that are like

what do you mean Kevin inflation is

solved have you seen how expensive

everything is I've never said prices

have returned to the levels where they

were before covid and quite frankly a

they don't have to and B they probably

won't but as inflation that is the rate

of price growth slows to basically flat

Jerome Powell and the FED should declare

Victory on inflation that is continuing

prices going up as long as that stops

we're slow substantially we need them to

declare Victory so they could stop

raising rates and actually start

reducing rates that's really important

for the crypto market so you need all of

these things to clear out and then you

could really get a bull market so think

about this rate cuts

SEC

ETF spot approvals China solving all of

their issues you get these things out of

the way and that's when you're really

going to start opening up a potential

for a euphoric crypto rally but you need

all this mess to get through first so if

you're wondering is it time to buy the

dip I don't know there's potentially

more pain ahead but once we get through

those things and if you can see the

light at the end of the tunnel

could always be a good time especially

since once those things are cleared

that's when we're expecting real

Euphoria could enter markets again

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