This Happens Every Time

[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 it feels like maximum opportunity is around the corner. We know liquidity has been flat recently, but this should change unless we expect central banks to be responsible all of a sudden. We also know that sentiment remains very fearful, which is usually the best time to accumulate unless Warren Buffett was wrong in saying that we should be greedy when others are fearful. And no matter where you look, there's scary narratives everywhere. So, unless the media is on our side all of a sudden and trying to help us buy low and sell high, this usually tends to be a great accumulation signal as well. As we can see here, the GLI has been chopping around recently, which is not the best backdrop for Bitcoin at least in the short-term. But, when we zoom out and take a look at the macro picture, we can see very clearly that in the long-term liquidity can only head in one direction. And this long-term trend will not change just because we have a new Fed chair because the entire global financial system relies on it continuing. And as we can see here, even though liquidity does tighten sometimes like 2022, 2018, and 2014, in the long-term it has no choice but to head higher, which is why we Bitcoin in the first place. And even though most investors are very aware of these logical arguments, it's their emotions that get in the way of actually executing on them. And there's no clearer representation of this than the Fear and Greed Index, where we can see here that extreme greed tends to happen right before corrections, and extreme fear tends to happen right before rallies. And right now, there are so many narratives keeping investors fearful and making sure logic gets thrown out the window. For example, we have this fan favorite Bitcoin miner capitulation, which seems to come up every single bear market. I remember a lot of discussion happening regarding this in a late 2022 and in a late 2018, even though it's just a normal healthy part of this market, where miners that take on too much risk end up capitulating in the bear market and acts as a healthy reset where the strong miners survive, but the weak ones have to capitulate. And we also have this one that keeps coming up over and over again, the Japanese Central Bank hiking interest rates. The Japanese yen carry trade experts call for a global financial system collapse every single time the Japanese Central Bank hikes rates, yet the world goes on. And this narrative has to be my favorite, the new Fed chair Kevin Warsh and what he said in yesterday's FOMC. Back in October of last year when everybody was bullish and expecting the market to go a lot higher, Kevin Warsh was a Trump puppet that was going to cut rates to zero. But now that the market is down and everybody is looking for any reason to be scared, they're convinced that all of a sudden the Fed is going to become incredibly responsible, stop printing money, and fight inflation. And this is a perfect example of how price leads narrative. If prices were up a lot right now for Bitcoin, people would be bullish about this Kevin Warsh FOMC, but because prices are down, they're saying that this is the end of the world and they're going to crush the global economy to bring inflation down to 2% and I think that is very unlikely. And of course, it would not be a Bitcoin bear market without a very scary narrative as to why Bitcoin's price needs to go a lot lower, like strategy selling a ton of Bitcoin.

[00:03:15]Even though them buying billions didn't make price skyrocket, everybody is convinced that them selling a couple hundred million is going to send Bitcoin to 30K. And it isn't just scary narratives, liquidations also make the market quite fearful because investors are being forced out of their positions and being forced to sell Bitcoin and other assets at prices where they wouldn't have sold by choice. And perhaps one of the best indicators for where we are in the cycle is the Bitcoin realized losses. So this is not unrealized losses that haven't been locked in. This is investors and traders actually locking in the loss and moving coins that had previously moved at higher prices. And as you can see here, 2026 looks a lot like what we saw in 2022. You have a big mid-cycle capitulation event during the bull market. In 2021, it was in May. In 2024, it was in April with the tariff crash.

[00:04:09]And then you have one big capitulation event into another one where we hit true price capitulation. Same thing this time around, we had a big capitulation event in I believe around November. And then we had another even bigger one that really convinced everybody it was a bear market in February. And then after that, there's a bit of consolidation and chop into one final capitulation event. This time around, we had that chop, a brief relief rally, and then one final capitulation event. Does that mean the bear market has to be over? No. But does it mean that we're a lot deeper into this bear market than most investors currently expect? Yes. And that's exactly why Monday's free weekly report was called signs of a bottom. Now, it's impossible to know the exact day of the bottom, but there are signs we look for like sentiment being really bad, a lot of realized losses, which is a perfect sign of capitulation because it's confirmed capitulation happening on chain. And of course, we want to be seeing very scary narratives that are making investors panic sell because they're convinced they're going to be able to buy back lower. Not to mention liquidations, which is investors actually being forced out of positions they didn't want to sell because price went lower than they had anticipated.

[00:05:19]And interestingly enough, all of this is happening as Bitcoin is testing that pivotal 200-week moving average that everybody knows it loves to bottom near during bear markets. Is it going to go under it like it did in 2022? Or is it going to bottom at it like it did in 2018 and 2014? That's anybody's guess.

[00:05:38]But with this 8-month consolidation range in 2024, combined with this area being the resistance for a year in 2021, now being tested as support. My base case remains that Bitcoin will not go below this trading range, which means the floor I see for Bitcoin this year is 50k. Do we get all the way down to 50k?

[00:05:58]It's impossible to know for sure. That's why I'm just going to be in accumulation mode over the next 4 months between now and October and just take advantage of what I believe to be good prices for the long term. Is there a chance that some black swan happens and Bitcoin goes lower and invalidates what my base case is? is? Of course, and that's something I have to try and navigate, but I believe the argument for a shallow bear market is still a lot stronger than the argument for a normal bear market where Bitcoin has its traditional 70% plus decline. But we have now reached the point in this bear market where there's very good arguments for both sides. For example, if you're in the normal bear market camp, you'll point to the realized price and say Bitcoin has tested it in every bear market, so why would this time be any different, which is a decent argument for why Bitcoin should enter the 50,000s. But if you're in the shallow bear market camp, you're probably going to point to the percent supply in profit and show that the number of coins in profit right now is the same level we've reached at previous bear market bottoms and a lot of the froth has already been shaken out of this market and there isn't enough remaining profit and sell pressure to take price much lower than where it is now, which is why it bottomed here in 2022, in 2020, and in 2018. But if you're in the normal bear market camp, you'll point to the Bitcoin MVRV ratio and show that we haven't hit the blue region where Bitcoin bottomed in 2014, 2019, and in 2022. So that says that price could go a little bit lower between now and October. But if you're in the shallow bear market camp, you'll point to the weekly RSI and say there is a bullish divergence happening here just like what happened in 2022 when price made a lower low, but the RSI made a higher low, showing that that lower low happened on weaker momentum and strength, and that a reversal was very likely. And that's what we're seeing this time around as well. RSI divergences on the weekly have a pretty high hit rate for Bitcoin. It marked the top in 2021. As you can see, RSI lower high, price higher high. That was it.

[00:08:00]Same thing for the top this time around.

[00:08:02]RSI lower high, price higher high. But what was interesting this time around was we had this kind of triple bearish divergence happening, where the RSI kept making lower highs, and you could argue we could see something like that happen once again going into October, where we put in a triple bearish divergence and still put in a slightly lower low later in the year. Of course, I know everybody hates the this could happen or that could happen rhetoric, but that's pretty much how markets work. But the beautiful thing about markets is we don't actually have to be right on the outcome. We can have a strategy that can navigate both scenarios. And for me, that strategy is accepting the fact that price capitulation is almost completely complete, and all I'm going to focus on now is time. And with it already being June, and October being only 4 months away, I'm just going to use these 4 months to accumulate Bitcoin and prepare for the next bull market. If that accumulation happens between 50 and 70k, amazing. If price goes lower than I currently expect, and some of that accumulation gets to happen at lower prices, even better. So, even though it's tempting to want to go all in on one outcome and bet that it has to be the one that happens, I have found it to be way easier to navigate markets profitably by being prepared for multiple, and just having a strategy that can navigate either. And it's great to see that seasonality is also lining up with that strategy. As of right now, June is red just like it was in 2022 and in 2018. July after those red Junes ended up being green, which makes sense.

[00:09:32]We could see some relief in July. But then August and September were red in both 2022, 2018, and in 2014. And then we know October is the best month for Bitcoin historically. So to me, I'm just going to see this summer as an accumulation opportunity. What does my average entry end up being? I can't know that as of right now, but I do expect that these prices and this accumulation window will end up looking pretty solid in the long term. And that's exactly why I'm just slowly buying a little bit every week. I bought a bit more strategy and strive with the cash I raised from selling Ethereum and Solana a few weeks ago. Because although I don't know exactly where these assets are going to bottom based on the sentiment I'm seeing out there, based on the narratives I'm seeing out there, and based on the macro backdrop I'm seeing out there, I do believe I'll be happy with these prices in the long term, but I'm managing my risk by keeping the higher risk assets a smaller portion of my portfolio, and I am keeping a cash position to take advantage of lower prices and accumulate between now and October. And as always, if you'd like to see my entire portfolio instead of just exposure I share on this channel or the exact system I plan to use to navigate markets over these upcoming volatile few years, you can check out the Market Enjoyers program and community in the video description.

[00:10:45]So we'll see what happens, but as of right now, Bitcoin is consolidating between our 60K range low and our 68K range mid. Definitely not the strongest looking weekly candle I have ever seen, but I like to wait for the close before jumping into any conclusions because I have seen plenty of weekly candles turn things around by the time the close happens on Sunday. In terms of Bitcoin spot ETF inflows, still really not much happening, mostly just outflows because these tend to be very correlated with sentiment. Bitcoin Treasury companies have also been pretty quiet, really not much buying happening here in June, mainly because of what Strategy is going through. They did buy $100 million worth this week and raised some cash as well, but compared to what they were doing previously, these are pretty small buys.

[00:11:32]And that's because strategy is unable to raise cash right now via STRC because STRC is quite a bit below the $100 par value where they'd be able to issue above it. And this is the exact type of volatility and bumpiness I warned about when they first used that cash reserve to pay off some debt because they wanted to improve their credit rating or who knows what. Because when you change the reserve that abruptly and spook investors that were expecting dividends to be covered for 18 months, that can create some damage that takes a very long time to repair. Now, I do believe STRC is going to keep paying the dividend and things should recover eventually, but the timeline is really really hard to gauge right now because the confidence has been shaken. And I believe we're starting to see that reflected in strategies price. Like Bitcoin, it's between its range low and range mid. And this weekly candle does look quite concerning, but we'll have to see how it closes tomorrow. As of right now, Bitcoin is still maintaining its false breakdown below 60k. So, we'll see if it can maintain that for another week, but chop and consolidation seems to be the most likely outcome for the remainder of the summer. And that brings us to macro. As we said previously, the GLI has flatlined here over the past few weeks, but when you zoom out, you can barely see this downtrend. And you can see very clearly that in the long term, nothing stops this train. But what's stopping this train in the short term is the fact that the dollar index is strengthening and is approaching a very important resistance level here at the convenient round number of 100. You have the 100-week moving average in red. It's the range high that it's been below going all the way back to April of 2025.

[00:13:07]And it was support for almost the entirety of 2023 and 2024. So, if it can be reclaimed here, we'll probably see the dollar rise for a while, but a rejection or false breakout here would be exactly what we want to see for liquidity and risk assets. But instead of being able to predict the future, we can just keep an eye on it and react accordingly. And this level is also very important to the macro picture as well as we can see here the dollar index is at a monthly resistance with the monthly 20-week moving average there in yellow.

[00:13:38]If it breaks above it, we might get what we usually get in mid-term years, which would tighten liquidity and be tough for risk assets, but if it gets rejected at resistance, we could see the party continue. And now the reason the dollar has been strengthening is we did get a bit of a hawkish tone on inflation from Warsh at yesterday's yesterday's FOMC meeting, the market is now pricing in two rate hikes. It is only one day after the meeting, so it does usually take some time for these rate changes to fully be priced in and for the market to digest the meeting, but this is what the market is pricing in as of right now.

[00:14:10]And this is what that current projection looks like. As I've said in the past, I don't think one or two 25 basis point rate hikes is going to be enough to really slow down this economy and bring down inflation. If the Fed really wants to be serious, they're probably going to have to do more than that. Otherwise, the market is probably going to keep climbing the wall of worry, especially because as of right now QE continues.

[00:14:31]Will that change under this new Fed chair? We're going to have to wait and see, but as of right now the balance sheet continues to increase in size, which is different from 2022, 2018, or the slowdown in balance sheet increase that we saw in 2014. And there is a real chance that inflation starts to cool off here and head in the right direction to help the Fed out, especially because we know the main driver of inflation has been the massive spike in energy prices.

[00:14:55]And even though the geopolitical experts spent about three months predicting exactly how high oil was going to go and calling for oil to go to $200 a barrel, it has now cooled off back down to 75.

[00:15:06]Is it going to bounce from here or is it going to keep falling down? Nobody can know. It's called the widow maker trade for a reason, but oil heading in the right direction and energy prices coming down is good for bringing down inflation and tapering Fed hawkishness, which would be great for the economy, which as of right now, according to the Atlanta Fed GDP now estimate continues to grow at 3%, which would continue our acceleration trend while we have a labor market that's holding up okay. Same thing with continuing jobless claims, same thing with initial jobless claims, and same thing with non-farm payrolls.

[00:15:38]The recession has been called for every single month over the past few years, yet the economy continues to chug along.

[00:15:44]And this is probably why the S&P 500 has been able to climb the wall of worry over the past few years as many investors remain sidelined listening to the doomers calling for a crash over and over and over again. Now it has reached the very expensive region. When it does reach this area, it does tend to be a sign that some correction and consolidation is around the corner. This would be a completely healthy cool off period as long as no black swan happen.

[00:16:09]So as of right now, I'm still sticking with the trend and expecting the S&P 500 to go higher, but some cool off and consolidation here would not surprise me. And perhaps that could align with that October bottom for Bitcoin if the S&P 500 decides to use this summer as a correction opportunity as well. That is actually exactly what we saw play out in 2018. Bitcoin struggled for pretty much the entire year, but the S&P 500 had a correction early in the year, rallied for a lot of it, and then had a bigger correction later in the year. Whereas 2022, they just both went down together for pretty much the entirety of the year. So as of right now, this does look like more of a 2018 scenario than a 2022 scenario. As for gold, it is still in our fair value region and looks like it may even want to spend some time consolidating in the cheap region with it closing below our 50-week moving average and having this pretty ugly wick to the upside, probably driven by the FOMC meeting and Warsh's comments on inflation. But I do still believe gold will continue its macro bull market after this consolidation phase because nothing stops this debasement train. As for Ethereum, still trying its best, bless its heart, but continues to just do whatever Bitcoin does just worse in terms of price action. Same story with Ethereum spot ETFs, still seeing outflows just like Bitcoin spot ETFs, but the most important chart to me is Ethereum Bitcoin. It gets these small green relief rallies before being sold into again. My invalidation is the range mid. Get above it and that will be the market telling us that something is changing here and perhaps we could have a trend shift against Bitcoin and I'll use that opportunity to rotate some Bitcoin back into Ethereum, but as of right now Bitcoin seems to be the better hold as long as Ethereum is in a downtrend against Bitcoin. As for the rest of the altcoin market, the altcoin season index is sitting at a 52, which means that a decent amount of altcoins are holding up okay here against Bitcoin, but that could just be because they've been beat up way more. What's been pretty disappointing is that after talking about it for years, the Russell 2000 did exactly what we were waiting for it to do, but for some reason the altcoin market just does not want to follow. Is that going to change at some point? I hope it does, but I'm not going to catch the falling knife until the market actually tells me that something is changing instead of just buying here and hoping that it's going to follow, which is a strategy that unfortunately has not worked over the past 6 to 12 months. And speaking of a strategy that hasn't worked over the past 6 to 12 months, Solana continues to struggle to reclaim the range breakdown that it had back in the beginning of June. I want to see it get back above the 2024 low, which is a major pivot. If it can get back above there and prove that there may be some strength, I'll reconsider my stance on it. ETF inflows are still very quiet. They have been pretty lackluster recently. And of course, the most important chart for Solana, its Bitcoin pair, is still in a slow bleed and still hasn't reclaimed the major pivot level.

[00:18:59]If it does and we get a clear sign that something has shifted, I will change my stance and perhaps rotate some Bitcoin to Solana, but as long as Solana is in a downtrend on its Bitcoin pair, I have to prioritize the safer asset. So, we'll see what happens. Our performance versus benchmark chart is showing no signs of improving quite yet, but this is to be expected in midterm years. But, as we look forward, the federal government is still running huge deficits. That trend continues to worsen year after year.

[00:19:26]Exponential debt growth results in exponential money supply growth, no matter who the Fed chair is, because that debt does have to get monetized eventually, and that devaluation of the fiat currency puts a strong tailwind on desirable risk assets like the S&P 500 and fixed supply debasement hedges 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 soon.