It Was Right Again

Ajouté : 2026-05-22

[00:00:00]Welcome back to my 10 favorite people.

[00:00:02]Hope you're doing well. I'm incredibly excited for today's video because you can't make this stuff up. Not only did Bitcoin bottom exactly when the GLI said it would back in early February, but Bitcoin has now found a local top and has started consolidating right when the GLI said it would in midMay. Now, I'm not going to pretend like this indicator is perfect or that liquidity is the only driver of Bitcoin, but it does seem to get things right about 90% of the time, which I find incredibly valuable. And it does logically make sense to me that a fixed supply asset like Bitcoin would mainly be driven by liquidity and adoption. The relationship between Bitcoin and the GLI gets especially interesting when we zoom out and look at the macro picture. A lot of people are expecting 2026 to play out just like 2022, 2018, and 2014. But that assumption completely ignores the fact that in those past three midterm years, liquidity was tightening. But here in 2026, it's still expanding even though we're halfway through May. And the reason why 2026 has been different so far is because the US dollar is not showing the same strength it usually does in midterm years. If we zoom out and take a look at how the US dollar usually acts in midterm years, you can see it was skyrocketing in 2022, 2018, 2014, and even 2010. But here it looks like it's just holding on for dear life before a breakdown. Perhaps this is because the Fed is still expanding their balance sheet here in 2026 and continuing QE, increasing it by over $40 billion just last month. And this is the complete opposite of 2022 when they were going from increasing the size of their balance sheet to quantitative tightening and reducing the size of their balance sheet, which tightens liquidity. Same thing in 2018, balance sheet reduction and tightening liquidity. And then same thing in 2014, they went from increasing their balance sheet to pausing and stopping that easing. And I do believe this is one of the main reasons why we're seeing a weaker dollar here in 2026 compared to previous midterm years.

[00:01:56]And this is especially interesting because the market is now pricing in zero rate cuts over the next 12 months and is even playing with the consideration of a rate hike in 2027.

[00:02:06]And I know a lot of people take a look at this in a vacuum and say it means that Bitcoin and other risk assets have to crash. But if we take a look at that current projection, the time period that looks most similar is the late '9s before we ran into the dotcom bubble.

[00:02:20]This may sound a bit counterintuitive, but rate cuts being priced out means the economy is actually holding up quite well here. A lot of people are hoping for aggressive rate cuts, but that actually usually only happens during recessions when the Fed is having to cut rates very aggressively and bring them much lower to save the economy. So rate cuts being priced out here because growth is higher than expected and inflation is coming in higher than expected is not as bad as most people are making it seem in my opinion. Again, higher inflation alone is concerning, but we also have to take a look at growth and other variables as well. A lot of people have been freaking out about this recent increase in core PPI because it tends to act as a leading indicator for core CPI. So they're expecting a similar spike to happen there as well. But those people are completely ignoring the fact that core PPI went up for almost the entirety of 2024. Yet all core CPI did for the entirety of that year was go down. So it's not like it's a perfect one toone correlation that we can just assume means core CPI is going to go up by the same amount. So although I expect this rising inflation to put pressure on liquidity due to the elevated energy prices, we can't just look at it in a vacuum. We have to take a look at growth as well. And as of right now, we have the Atlanta Fed GDP now estimate coming in at 4% real GDP growth for Q2, which is pretty insane. And this is building upon a real GDP number that was already accelerating. So, good luck to the same doomers that have been making the same recession calls over and over again each and every week over the past few years because they're probably going to have to wait quite a bit longer. The unemployment rate is still quite low, which is not what you'd expect to see if we were entering a recession tomorrow.

[00:04:01]Continuing jobless claims is still quite low. Initial jobless claims is still quite low. Hiring is still happening.

[00:04:07]We're not seeing the huge drops you'd expect if we were in a recession. And I think that combination is exactly why the S&P 500 has been skyrocketing recently. We saw some profit taking in the very expensive region. But this is still a very strong trend that I would not bet against. Some consolidation is completely normal, but as of right now, the S&P 500 still looks like it has a lot of momentum behind it. And this is the exact backdrop we want to see for Bitcoin since we know a strong S&P 500 is a prerequisite for Bitcoin doing well. Now, we know Bitcoin is way more correlated with software. So, it's nice to see the software ETF recovering as well. Bitcoin is probably just being bundled in with software because that's how most traditional investors view it.

[00:04:48]As for gold, it just continues to cool off in the fair value region after the blowoff top move we had into very expensive earlier this year. This looks like one large consolidation before gold's next move higher in my opinion, but that will take some time. As for Bitcoin scenarios and preparing for multiple outcomes, the shallow bare market scenario is still the base case.

[00:05:08]And to better define some of these terms, the shallow bare market is just how I choose to describe a bare market where Bitcoin has already seen price capitulation with that 50% drop in just 4 months back to the 200E moving average. But even though I believe price capitulation is complete, we may still need time capitulation where Bitcoin goes sideways for a while and accumulates while building a base for the next major move higher. And the normal bare market scenario is the scenario where Bitcoin still has quite a bit more price and time capitulation to go and is going to go a lot lower between now and the end of the year.

[00:05:39]I've said many times I think that one is less likely because we already got to the 200week moving average and we have that eight-month consolidation period from back in 2024 which I expect to act as very strong support. And last but certainly not least, the short bare scenario is just the scenario where price capitulation and time capitulation are already complete and Bitcoin is going to head back to new highs and make new highs here in 2026. So we'll see what happens, but for now the base case remains unchanged and this base case is backed up by the onchain data. This is the Bitcoin total supply and loss measured in number of Bitcoin. And as you can see here, bare market bottoms tend to happen once 10 million coins are in a loss. And as you can see, this time around, we already hit that supply and loss number. And we're way ahead of schedule compared to where we were at the same time in 2022. So that many coins being in a loss is good enough for me and acts as clear evidence that this was in fact price capitulation and has given me the confidence to keep accumulating Bitcoin here in the cheap region. like we have been discussing over the past few months. Now, I do hope we get a chance to accumulate Bitcoin in the very cheap region here soon, but I see so many people that are convinced it's 100% going to happen. So, I do believe there's a decent chance that they don't get the entry they're hoping for and have to end up chasing price higher. So, how am I balancing these probabilities? I have a 20% cash position in case we are granted the opportunity to buy in the very cheap region later in the year, but I still have 80% upside exposure because Bitcoin already visited the cheap region. And I see that as a solid buying opportunity for the long term, not to mention, as we said earlier, the supply and loss is already at regions where Bitcoin has found bare market bottoms in the past.

[00:07:19]And if you'd like to see my entire portfolio, including non-crypto assets, or the exact system I use to manage it, you can check out the market enjoyers program and community in the video description. Bitcoin is now back at support, trying to hold that 76K range high along with that 20week moving average. This briefly put sentiment back in fear, which is exactly what we want to see on this type of correction. And just like with any other Bitcoin pullback, there's so many bearish narratives popping up to scare investors. Like this one for example, talking about the sell in May bare market setup for Bitcoin just because May was rough in 2022 and in 2018 completely ignoring the incredible May we had in the 2014 bare market. And of course, as soon as price goes down even a little bit, we start to see quantum fear mentioned all over the place. And in case that wasn't enough, we still have a ton of geopolitical uncertainty that markets have to navigate. And it's hard to say the timing is a coincidence because all these narratives are getting a ton of attention right as Bitcoin tests a very important resistance level here at the 200day moving average. This area was also support back in late November of last year. So it makes sense that it would act as resistance on the first test and a pullback here would not be surprising. But I do think it's way too early to say this is definitely a resistance that's going to send Bitcoin back to new lows. And that's also why Monday's free report was called rejected at resistance. So, we'll see what happens this week. We got our range breakout a few weeks ago, and now we're coming back down to retest it. I would not get too bearish until we lose 76K.

[00:08:48]As for the spot ETFs, we did see a $1 billion outflow last week, ending a six-w week run that had pulled in 3.4 billion. So, that's probably just investors taking profit at that major resistance level. You can see it very clearly here on the daily flows. bunch of inflows over the past few weeks and then some outflows last week. As for Bitcoin treasuries, we know March was a strong month, April was a strong month and May looks like it's going to be a strong month as well with Strategy buying $2 billion worth of Bitcoin last week. And the pattern of Strategy buying a ton of Bitcoin even in a bare market below their average cost basis continues. Again, completely different to what we saw back in 2022. and STRC continues to do a ton of volume and the market seems to be appreciating that more and more and I do think it's very smart for strategy to mix in some debt repurchases alongside just making buys and I do also think it was smart for Sailor to float the idea of selling some Bitcoin as needed because right now the market is just looking at STRC issuance and volume and predicting how much Sailor is going to buy and then just frontr running him and making his average entry significantly worse. So, in my opinion, mixing in debt repayments as well as some Bitcoin sales as needed makes it a lot harder for the market to just frontr run him over and over again once STRC has a very solid day and they know that Sailor is going to buy. And this approach works even if they don't end up selling any Bitcoin because I'm sure Sailor doesn't want to. Just having it out there makes it a lot harder for other participants to frontr run their moves. As for MSTR itself, it fell back into its trading range and is now coming down to retest its 220week moving averages. But again, MSTR is just going to do a more exaggerated version of what Bitcoin decides to do. As for Ethereum, still chopping around between our major pivot level at 2,000 and its 200E moving average at about 2400. ETF outflows continue for Ethereum, of course, because Bitcoin is seeing the same.

[00:10:50]Ethereum is still in its cheap region just like Bitcoin is, but is not seeing the same strength that Bitcoin is seeing, at least in terms of this most recent rally. And we can see that very clearly on Ethereum's Bitcoin pair, which just broke below the range mid, and that usually means you're headed back to the range low. As for the rest of the altcoin market, still pretty quiet with the altcoin season index sitting at 36. The Russell 2000 continues to consolidate at the highs, but still not much happening with Total 3, just like we're not seeing much happening with Salana. Just holding on to support for dear life. We are seeing some small ETF inflows here for Salana, but it really isn't much. And it is also in its cheap region just like Ethereum and Bitcoin are, but it still looks weaker than both. And we can see that very clearly on Salana's Bitcoin pair, which is getting rejected at the old range high and that major pivot level.

[00:11:40]So, we'll see what happens over the next few months. But, as we look forward, the federal government is still running huge deficits. That trend seems to worsen year after year. Exponential debt growth results in exponential money supply growth as that debt has to get monetized. And the debasement of that fiat currency acts as a tailwind on valuable risk assets like the S&P 500 and fixed supply risk assets like Bitcoin. But, as always, let me know what you expect. Thank you so much for the support on the recent videos. Thank you so much for watching and I'll talk to you