So I can certainly see Bitcoin dropping to a $5,000 range I am not expecting a $100,000 by the end of 2021
I do believe that Bitcoin has to come up to above a $100,000 What's up, YouTube? My name is Jackson Today I'm here with YouTuber traders Tone Vays and Carl The Moon How's it going today, guys? Very good Good
Bitcoin price has fallen over 10% in the past few days Carl, you took to Twitter on March 9th to point out a head and shoulders formation Tone, on the same day, you also pointed out this formation in one of your recent videos I'm sure was talking about head and shoulders There will be a couple of ways to draw this
Like, I don't really care for head and shoulders I never cared for head and shoulders And mentioned in a Twitter thread, you are bearish at the moment Are you both bearish only for the short term, or do you think we are headed toward a new bear market?So this head and shoulders pattern is, of course, something that was quite obvious in the chart and we broke down below that neckline And of course, I think the target technically should be somewhere along the lines of $6,500
But I can't say I am overly confident in the fact that we're going to reach those levels I think that there's so much confluence in into the $7,700 area We had the futures gap that just got filled, the CME futures gap at $7,700 approximately And that was also the Fibonacci golden pocket approximately from the lows of $6,5K up to the recent highs of $10,5K The retracement makes sense in the $7
7K area And also there was this bear flag that played out to those levels I think that there's a lot of support coming in from $7,500-$7,800 in my opinion I think it would actually make sense if we could see at least a short term bounce from these lows I don't believe that Bitcoin is going down to new lows at this stage
Tone, I saw that you also pointed out this head and shoulders formation on not your most recent video, but the one before that And you were talking about how you could draw it a number of different ways Multiple ways to draw it There is some subjectivity You can also draw it this way, if you like
It doesn't matter There's a lot of subjectivity There's a lot of subjectivity, you can draw it this way, if you like How are you feeling about the current direction that the market is heading in? So to me, I know Carl mentioned the $6,5K area To me, that's the one area I'm actually not exactly looking for because I'm not a big fan of double bottoms
So to me, Bitcoin either has to make the low before the halving noticeably above $65K or I would expect it to go below $65 if it gets there We did fall quite a bit over the last few days That was a 17% drop
The prices are bouncing back a little bit And if we are going to use this red line right here at $8,500 as the neckline, Bitcoin can bounce back to that $8,400-$8,500 area But as long as the price of Bitcoin stays below the $8,500 area, I will be expecting new lows lower than the $7,600 we had just the other day So I will remain bearish On the intermediate timeframe like the pre-halving timeframe over the next few months, I think a lower low could easily be made before on or around the halving
So that's my current general outlook Bitcoin would need to be breaking $9,000 for me to be bullish for the next year or two So we saw some really big price drops in Bitcoin recently Do you think these price drops were due to the sell offs from the PlusToken pyramid scheme or did other factors impact these movements such as fear from the coronavirus or stock market crashes? I mean, can we conclude anything about the recent Bitcoin price movements in correlation with other economic events? I think that Bitcoin is generally correlated with the stock market Now it's very hard to tell because the stock market has been in a pretty much a 10 year bull market with the invention of Bitcoin
When Bitcoin first got its price around 2010, when Mt Gox launched, the S&P 500 generally called global stock markets were already in its bull market I think Bitcoin has greatly benefited from the bull market in the stocks because when those stocks were in a bull market, companies are doing well Private industry is doing well Unemployment in Europe and the US has been very, very small and it's great
And people have access income And when you have access income, you are able to speculate in very speculative assets like Bitcoin And what we witnessed the other day, I think is telling on the day that the S&P had major crashes, Bitcoin did not perform very well And I think that does make sense to me because when people start worrying about their job, they're not exactly paying attention to Bitcoin and not running out and buying Bitcoin Gold seems to be a much better safe haven haven in a time like this than Bitcoin
And today's stock market bounced very, very well and Bitcoin is bouncing as well So I think there is a correlation I think Bitcoin is more correlated with the stock market than with the gold market As strange as that sounds, and there are occasions where gold is correlated with stocks, but most of the time it's not So I would say Bitcoin is more correlated with the stock market
Do you see the same kind of correlation, Carl, and do you see a moment where Bitcoin might break away from this correlation? I think that, yes, there is evidence that suggests that Bitcoin seems to be correlated to stocks and sometimes it's correlated with gold I think Bitcoin is still seen as a risky investment It's still seen as something which has a lot of risk And it's true, it has a lot of volatility And the big mainstream and the biggest investors, they have maybe diversified into Bitcoin a little bit
And Bitcoin might be the first thing that they sell in these kinds of price shocks But like I said earlier, I think the fundamentals of Bitcoin will eventually become undeniable where, for example, when this crisis becomes more severe, when corporations start to default, when debts start to default, when people cannot withdraw money from the ATMs anymore At this stage, I think that people will actually very seriously consider Bitcoin a safe haven And I think that around halving and after the halving, we will see more people talk about Bitcoin as a safe haven, but maybe not right now in the deepest like in the initial start year of the crisis Got it
And what do you think, Tone? Do you think that Bitcoin will eventually evolve into a safe haven when the crisis becomes more serious? Yeah, but it would have to be more financially related crisis, and this one is not This one is more of an economic crisis So Bitcoin doesn't really have this sex appeal for the general market because this particular crisis has nothing to do with the failure of the traditional economic system What do you think about that perspective, Carl? I think that in terms of this crisis being financial versus not financial, in my opinion, I think that everything about this crisis has everything to do with central banking and how the banking system has been manipulating the economy for the past, I mean, a hundred years But let's just talk about the last 10 years where interest rates have been artificially kept low
We've seen the Fed having zero percent We've seen countries like Sweden and other countries having even negative interest rates And this is a clear sign of the fact that the economy cannot sustain itself So they had to manipulate it in order to push stocks up and push real estate up and not to mention all of the trillions of dollars printed in central banks globally So I think that the stock market rallies we've seen for the past 10 years and the real estate booms we've seen globally are directly correlated with the manipulation by central banks and banks and the crisis that we are probably entering in right now
In my opinion, has everything to do with that and maybe a little bit to do with the oil war or this coronavirus I think that these two events, these two recent events can serve as triggers, but nothing more than triggers I think that they are not the fundamental cause of the crisis and they can never be the fundamental cause of the crisis They can only be the last thing to push the financial markets over the edge But fundamentally, the problem was already there
I don't exactly agree with some of that I don't think that the Fed is keeping rates artificially low I really don't see it that way The Fed reacts to the market, the Fed is usually late The Fed will do what the market is telling it to do
And when stock markets crash, people got to move that money somewhere like stock markets crash because, you know, people sell their stocks It's not because there's a magical short seller that's crushing the market That's not why markets crash, markets crashed because people are, you know, going into safetyThey're taking their money out and nobody wants to buy So there's no bid
And a lot of that money goes into the bond market And when you, you know, buy bonds, you know, you don't care You just want to go into safety People have been saying that, you know, the Fed is keeping this, you know, artificially low where the system is going to implode We've been hearing this, you know, my entire life in the world of finance
And sure, it'll eventually happen But I don't think it's going to happen because, you know, these rates are low They're only low for the banks, like the banks will still charge you significant interest So that low interest rate, it's really to recapitalize the banks because the banks got themselves into a lot of trouble in 2008 And some of them, like Deutsche Bank and some of the other ones are actually still in trouble
So there's like a back door printing press for the banks to kind of bail them out with these low interest rates But I don't think they're affecting the market or the stock market all that much It's still mostly speculation about what the earnings of these companies are going to be five years down the line So let's move on According to the stock, the flow indicator, which values Bitcoin based on its existing supply versus the new coins that will enter circulation, Bitcoin is still on track to $ 100,000 in 2021
This indicator's directly linked to the fundamentals created by the halving process of Bitcoin How much impact do you think this economic crisis is going to have on this longer term valuation that is based on the fundamentals of Bitcoin? Let's start with you, Carl So if the question is, if I believe in the stock to flow ratio model, then my answer is that I think it's very hard to deny the significance of the model at this point in time So when you look at the chart, it seems like Bitcoin for sure is following this ratio So that's, I mean, based on that, I do believe that Bitcoin has to come up to above $100,000
Basically, because the trend seems to be in that direction and the trend is your friend There's no reason to believe that the trend is going to just change now And so I believe in this stock to flow ratio model However, I think that also it's also obvious that it cannot go on forever Right
So there has to be some kind of cap there But yeah, I'm a believer Tone, are you familiar with the stock to flow model? I am, I haven't, you know, dug deep into that, I mean, personally, I'm not expecting a price that high, I'm not expecting a $100,000 by the end of 2021 I would be very happy if that occurs I am a hodler, but I think that's a little ambitious
And right now I mean, look at us, we're still, what, 60% lower than the high over two years ago So I think it's going to be a little bit of a struggle I think it will be a bigger struggle than a lot of people expect And if models were this easy, everybody would be rich Right
So I am expecting the stock to flow model to underperform slightly But am I expecting Bitcoin to hit a $100,000 at some point? Yeah, I do Probably around the next halving And I guess my follow up to this is considering this next halving because in a post on mediumcom, the co-founder of Messari, Ryan Selkis said that the Bitcoin halving narrative is now completely dead
And the only thing that matters with respect to the halving now is whether it breaks the mining marketDo you agree that that this economic crisis is going to kill the Bitcoin halving? It's the exact opposite It will just put even more even more attention to the halvings and what the halvings mean for Bitcoin And just to make it very simple, it just means that the inflation will be cut in half every four years until the inflation reaches zero And that means that Bitcoin is unique
There's nothing else in the world that has a zero percent inflation It will most likely change the world for so many people, change their personal finance, especially in countries that are already in deep, severe crisis But as we see the whole world globally sliding to a crisis, there will be a global demand for a new form of money and Bitcoin is just perfect for that And so, yeah, I think that the halving will be very, very bullish for Bitcoin There is no need to, there's no reason to believe that it's not going to be
How do you feel about it, Tone? How do you think that this economic crisis is going to impact the halving? I don't think it's going to impact it at all that much I think that, I mean, the halving is going to help the price of Bitcoin rise Maybe not right away, but over time, obviously, it does more, it has a lot of benefit because you are going to have less Bitcoin for the miners to sell But I can certainly see this, you know, corona crisis dropping the market a little bit further The overall stock market causing havoc in the world economy
You know, companies going out of business Again, it goes back to the fundamental view that if companies, stock market falls because companies are not performing well, companies aren't performing well, they're not going to raise salary, they're not going to give people bonuses And people will have lost money to speculate on Bitcoin So I can certainly see Bitcoin dropping to that $5,000 range And when the halving comes, and Bitcoin is sitting at $5,000
Yeah, a lot of inefficient miners will not be able to pay their electric bill and mining could potentially take a hit But it's not going to be that big of a hit So I think it will be fine I think this is, you know, unreasonable panic and that's what Bitcoin kind of needs I mean, people need to panic
So before we close out this interview, I'd like to give you the opportunity, if there's anything you'd like to say to our viewers as we approach this economic crisis Any words of caution or advice you might have for them? Carl, do you have anything to say? I think it's wise to always own gold, silver and Bitcoin I would never advise someone to only hold gold, silver and Bitcoin But I think that every portfolio needs to have these assets in their basket of other assets And I mean, if you're very heavily weighted towards stocks, if you have 90%, if 90% of your portfolio is only stocks, you only hold real estate, then you're in the risk zone because you should never put all of your eggs in one basket
So diversification is key Any words from you, Tone? Sure I will say that for those looking to trade, make sure you learn how to trade first I have to say this more and more often because people watch us on TV talking about prices, but we're mostly talking to other traders that know what they're doing So if you think trading is easy, you really got to stop and think about what you're going to do
I equate trading to driving, let's say a car or even a race car If you're going to try and do it without any education, without any practice, you're not going to win in this game So while we do talk about our outlooks and our trading, you have to learn from somewhere before you actually do it So that's my only advice to people And always be responsible for your own decisions
Don't follow anyone that tells you one asset over another A lot of it is our opinions, and just because our money's in something doesn't mean that that's where your money should be as well Thanks for that advice, guys This has been Carl The Moon and Tone Vays See you guys next time
I'm Jackson with Cointelegraph, and always remember to like, subscribe and hodl
