Every Bottom Signal Is Flashing Except ONE... But July 29 Decides It

[00:00:00]Let me tell you what's been bugging me all week. Every signal that marked the bottom of the last three crypto [music] cycles is flashing right now and all at the same time. These are the kind of readings we haven't seen since the FTX collapse back in 2022. On paper, this is the moment. This is where everything turns around and fortunes get made. So, why does something feel deeply wrong about it? Well, here's what I mean. I went digging through the data and found one thing missing from the setup. one piece that was there at every single bottom before this [music] and it's nowhere to be found today. What's crazy is that people are staring at price charts without considering this. So, have we truly seen the bottom already?

[00:00:39]Or is this recent bounce just a trap before we see a lower low? Well, these are the critical questions on everyone's minds. So, give me a few minutes because I'll show you exactly what everyone is overlooking and how this helps [music] answer these critical questions. Before we get into the good stuff, please remember that this content is for educational purposes only. I'm not a financial adviser and none of what I share is financial advice. And with that in mind, please do your own research and understand the risks involved with the crypto market. Now, hit those like and subscribe buttons, turn on post notifications, and let's get started.

[00:01:11]So, let me show you what I found.

[00:01:13]Starting with where we actually stand.

[00:01:16]As I'm recording this, Bitcoin is in the 60K [music] range, about 50% below the all-time high. Last month, we saw a brutal flush towards 58,000 and that month closed down over 20%. This was the worst so far of the year and the third losing quarter in a row. You have to go back to 2022 to find a negative streak like this. [music] And I'm starting with Bitcoin on purpose. This is the health chart for the whole market right now.

[00:01:41]Whichever way Bitcoin moves, alts tend to move in the same direction but faster. So, why are people calling the bottom here? Well, those signals I mentioned are real and they're stacking up. There's a metric called the realized profit and loss ratio, which basically measures whether more people are selling in profit or at a loss. And the ratio for Bitcoin just hit its lowest level in more than 3 and 1/2 years. This tells us more people are selling their Bitcoin at a loss. And that makes sense if you think about Sailor's position being the largest corporate holder. Bitcoin's price is below his average buyin. So his recent sale this month was at a loss [music] and this is the case for any investor or corporation that jumped into Bitcoin after October 2024. Now if you look at the history of this ratio, last time the market hurt this much was the FTX collapse at the end of 2022. The fear and greed index has been stuck in fear for weeks and the long-term holders who have survived every crash now control around 80% of the supply. This is now closing in on a level that has marked past cycle bottoms. But here's the part that's easy to miss when everyone's feeling panic and fear. A few of those holders are feeling the pressure and selling at a loss, but the share of the supply belonging to long-term holders keeps climbing. So, the weakest hands are handing their coins straight to the strongest hands who continue to stack their bags. So, in other words, heavy accumulation for the biggest holders. That is what tends to happen at the tail end of the bare market before things flip. And here's another signal that people are pointing to right now, the ETH to Bitcoin ratio, which tells us whether Ethereum is gaining or losing ground against Bitcoin. It just broke above a downtrend line that we've seen for the first half of this year. And here's what this means. Money coming back into this market tends to move in an order. It flows into Bitcoin first, then into altcoins, starting with the large caps like Ethereum, then it spreads into the other smaller caps. So Ethereum starting to outperform is usually one of the earliest signs that a real market recovery is forming. The same thing is being shown by the altcoin season index which tells us the performance of alts compared to Bitcoin. [music] This index has climbed off its floor back into the neutral range after sitting in Bitcoin territory for most of the year. Now let me be clear. This is not a confirmation of an alt season. the reading has to go higher to indicate altcoin dominance and line up with other major indicators like the Bitcoin dominance ratio which normally drops a lot during a massive rotation into altcoins and as of now there are some strong signs of an early rotation but nothing is truly confirmed yet. It's just worth understanding that this is exactly the kind of setup that has come before every recovery that we've had. So if the signals look this good, is it safe to say that we've seen the bottom? Well, this is still being debated and a lot of these arguments have to do with three indicators on Bitcoin's chart. The first is the 20week moving average in the lower 60k range right now. [music] And Bitcoin has to reclaim this just to turn the short-term trend back up. But below that is the big one, the 200E moving average. Also down in the low 60s. This one is important because it has marked the floor of every major bare market that Bitcoin has ever had. In late June, Bitcoin closed a full week below it for the first time in four years. And a lot of people view this alone as a strong bottom signal for Bitcoin. Then there's an onchain metric called realized price. So basically the average price every coin last moved at.

[00:05:08]Think of it as the market's true cost basis and it sits around 53 to 54,000 today. In every single bare market bottom so far, Bitcoin touched or slightly broke that realized price line before the real reversal began. We haven't touched it yet since 2022. And this is a big reason that people believe there's still more room for Bitcoin to fall. Now, here's something worth sitting with while we wait because this whole story could take months to play out. While you're holding your coins and waiting for that turn, what is your crypto actually doing for you? For most people, the honest answer is nothing.

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[00:05:52]And here's what caught my eye. Big names like XRP, XLM, and HAR are on there earning yields. There's no lockup. You can withdraw any time. Your assets are secured through Fireblocks. And Foris X is publicly on file with the SEC, which most platforms never bother to do. Now, keep in mind that this doesn't mean the SEC is endorsing them. And yields are variable and never guaranteed. So, do your own research, but if you want to check them out, the link is in the description below. So, back to that missing piece. Every time Bitcoin bounced off those levels I mentioned in the past, it happened while money was flowing in easily. Liquidity was expanding rapidly. And that's the reality to consider versus just believing that Bitcoin will automatically bounce off of an imaginary line. Just think about what was happening during every major reversal in the past. [music] In 2015 and 2019, the interest rate was at zero or being cut.

[00:06:43]In 2022, Bitcoin fell straight through that line and stayed under it for over a year. and it only recovered once the market could see rate cuts coming. So what saved Bitcoin each time was really the liquidity turning, not the 200 week line on its own. And right now we're testing this line while facing a lot of uncertainty. June's inflation data was lower than expected. So many believe that the probability of a rate hike this month is low and that can quickly change if oil prices start rising with global tensions. But basically this is the missing piece. There needs to be enough liquidity in the market and that becomes a struggle with rate hikes in the picture. In past cycles, Bitcoin was mostly moved by retail and miners. This cycle, it runs through the spot ETFs, which now drive close to half of Bitcoin's weekly moves. When people sell out of those funds, the managers have to sell real Bitcoin to cover it, whether anyone feels bullish or not. And this year, that selling has been brutal, with June being the worst month so far. Now, if the Fed decides to keep money tight, that pressure flows straight into forced selling. And this is all playing out right in front of us. The recent bounce for Bitcoin that made people believe the bottom is in came from a single inflation report. The June numbers came in cooler than expected, pulling inflation down to 3.5%. And Bitcoin popped up into the mid60k range on that news. But now, here's the thing. That report doesn't consider what's going on in the Middle East. With a ceasefire being broken and the price of oil already starting to rebound, it's possible that this relief might not last. Which brings us to the Fed itself.

[00:08:16]Rates are still restrictive and the new chair Kevin Worsh keeps signaling no tolerance for inflation. Right now, the market is split 50/50 on a rate hike by September. And you can see the impact of this everywhere else. The money leaving Bitcoin mostly chased AI stocks over the last little while. At the [music] same time, gold dropped significantly from its January peak. And the US dollar index is back above 100. So stocks are up, Bitcoin and gold are down, [music] and the dollar is gaining strength.

[00:08:45]That's the recipe for tight liquidity, and it fits into the dollar framework that I've shared here before. Bitcoin struggles when the dollar is strong and liquidity is tight. So instead of guessing where the bottom is for Bitcoin, here's what actually tells you which way this breaks. Watch the weekly closes around the 200E moving average.

[00:09:02]Follow the ETF flows for a streak that holds for several weeks, not just one green day. And watch the Fed with the next meeting on July 28th and 29th because the odds of a September hike move this entire market. Those signals will turn before the price chart does.

[00:09:18]These are the types of updates and changes we track in real time inside the Fire Hustle Discord. So, if you're looking for a way to stay ahead of everyone else, then check out the link in the description below. So, back to what we opened with. Have we seen the bottom or is this a trap before a lower low? Well, everything about the market today screams bottom. The deep retracement, the long-term holders are growing. Altcoins like Ethereum are starting to gain strength. Bitcoin's price is sitting on a key support zone.

[00:09:45]And the only thing missing is the liquidity to actually set it off. Until the Fed makes a move or the dollar rolls over, all of this is a loaded spring with nothing to release it. And when that release comes, it will show up in the flows and the Fed's decisions before it ever shows up on the chart. Now, dropping lower from here isn't out of the question, though, especially if global conflicts continue getting worse.

[00:10:07]So, definitely keep up with what's going on around the world because this tends to impact the market immediately. But what are your thoughts? Are we dropping lower from here, or is it time to bounce higher? Let me know in the comments down below. I read every single one. If this gave you a clear picture of what's driving Bitcoin, hit that like button and subscribe so you catch the next update. As always, none of what I share is financial advice. Please do your own research before making any investment decisions. Thanks for watching and I'll see you in the next one.

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