The Wolf Of All Streets - I Will Tell You Why The Ethereum Bottom Is likely In! Bitcoin To Drop To $49K?

Episode Date: September 4, 2024

What's going on with the crypto market? David Duong, The Head Of Institutional Research at Coinbase, is joining me to discuss the latest developments. Chris Inks will join us in the second part to share some interesting trades in crypto and beyond.  David Duong: https://x.com/dav1dduong Chris Inks: https://twitter.com/TXWestCapital ►► WANT MORE? JOIN MY COMMUNITY AND GET EVERYTHING WOLF OF ALL STREETS! 👉https://www.thewolfofallstreets.com/ ►►JOIN ME ON ROUNDTABLE! EARN RTB TOKENS WEEKLY JUST BY INTERACTING WITH ME 👉https://roundtable.rtb.io/RTBHOME/posts/D114kPwOSVcbmhwyhm79?refBy=18206041095800507455 ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/   ►► The Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities!  👉https://thearchpublic.com/  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker  Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.com/ Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Investments The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

I don't make many calls or price predictions, but I can say that I'm starting to feel like the Ethereum Bitcoin pairs bottom is in. And I will tell you exactly why. I think that the title before said Ethereum is dead. That was obviously clickbait. So with sarcasm, I'm going to tell you why I don't think it's dead. And I'm going to discuss that with head of institutional research at Coinbase, David Young. Of course, we've got Texas West Capital on the back half. Let's talk about Bitcoin, Ethereum, everything else happening in this market. Let's go. low. Ethereum's dead. It's over. The Bitcoin maxis are dancing on the grave. Vitalik is selling all of his Ethereum. He doesn't believe in it anymore. He thinks DeFi is a joke. It's dead. It's over.

We're in a bear market. Sell everything if you haven't already and have fun staying poor. Do you think Ethereum's dead, David? No, I definitely don't think it's dead. And I find it funny that every cycle we seem to talk about this and it's always some kind of narrative of like, is crypto dead? Is Bitcoin dead? Is Ethereum dead? No, I don't think it's dead. Okay, so this is what I love that I'll probably get clipped and people will act like that wasn't sarcasm at the beginning. But that was sarcasm.

So as I said, this is kind of what I'm alluding to here. and people will act like that wasn't sarcasm at the beginning. But that was sarcasm. So as I said, this is kind of what I'm alluding to here. One tweet, but there have been many from Fred Krueger. Ethereum is in a death spiral. ETH is doing 200K a day in fee revenue. That's 73 million a year. He goes in to talk about why Ethereum literally is over. They're never going to be able to afford to continue.

It's like it's a failed business or something that needs to go out and do a series D, right? I mean, that's not really how this works A, but we've been here before. These are not signals that it's dead, but here we are. Death spiral. Yeah. I mean, I don't know if this is the bottom. I think you have a lot more conviction about that than I do. But definitely, I think that it's forming a bottom here. You know, I think a big part of this had to be honest, just to do with the spot ETFs versus what we're seeing with spot Bitcoin ETFs. They have had cumulative outflows since inception compared to the $18 billion in inflows that spot Bitcoin ETFs have had. And there's different reasons why I think that's happening. One, the market environment is just very different in terms of the launch between what we saw with spot Bitcoin ETFs in January

this year versus July for the spot ETH ETFs this year. I think that explains some of the difference. But also, yeah, I think for a lot of these managers, they have some relative difficulty in educating new investors on how Ethereum supply schedule works versus like Bitcoin's dead simple, like 21 million supply cap. You know how smart contract utility kind of operates, like the absence of staking yields. I think all these things are a little bit more difficult for them, even though I don't think they should be. And, you know, I think that may be contributing to some of the lack of appetite for these ETH ETFs. They also launched into the worst part of the cycle. Absolutely.

I mean, just when nobody cares about literally anything and the way that they were launched was a complete mess because it was obviously sort of political pressure that caused them to get approved overnight when nobody expected it. I think these are going to take a long time, but I think there's a lot more to the ETH story necessarily than just the ETFs, right? I mean, I'll tell you who doesn't think it's dead, Larry Fink, right? I mean, they're like tokenizing real world assets and treasuries effectively on ethereum over a billion dollars worth already for blackrock i mean it just the dead i i don't i don't get it i want to i want to show you something

you might remember this i found this on reddit because i was trying to find it but this was pre twitter spaces this is when it was clubhouse right i like some of these guys by the way and some of them are actually reformed maxis now like ud but on But on March 24th, this was 2021, Bitcoin maxis had a death of ETH Clubhouse party. I remember that day. I also said that was the bottom, by the way. On that day, I was like, there's no bigger bottom signal than this right now. The ETH BTC ratio has been mooning ever since. Learn from their arrogance and humble in the good times. So last I checked, ETH is still over 0.04. This was at 0.03. It's never revisited. I don't think even below 0.04 since that day, three years ago. Right. So I mean, when you start hearing about the death of things going to zero,

it's the best signal for me. This is a tweet I had in 2019 about Tesla. Literally, people started yelling Tesla was going to zero, like Elon Musk smoked weed or something on Rogan. I was like, I'm buying all the Tesla. And that was the generational bottom of Tesla at that point too. I'm not saying it's like some God tier trading move. I'm just saying there are signals that are better than charts. And these are the kind of bottom signals for assets we get all the time in crypto cycles. I think they happen in TradFi as well. And you have gauges like when you see a certain theme on the cover of The Economist, for example, or like blown all over the FT or Bloomberg, you know that's a bomb signal because by the time the media gets a hold of it and they're

actually promoting it as like, this is the death of X, Y, and Z, you know that generally that's because you've already gotten through all of the other smaller signals that have shown you that it's kind of forming a bottom here or something that they didn't want to recognize until it kind of gets to the extremes um and by the way i don't think we should be celebrating if it was if if we genuinely believe it was like the death of something and you're in this community like and, and granted, I know that we're, we're somewhat tribal inside of crypto. It's like, I wouldn't be celebrating if it was one L one versus another. But there are a lot of themes that are happening specific to Ethereum that I do recognize,

you know, like the deflationary ultrasound money thesis, I think has been been deflated somewhat, not to play on words. But, you know, I think that I never really loved that one anyway. And I think that it hasn't served it well inside of this cycle. So I think that plus you have new technological competitors with Solana, other next generation chains. I think all of that's just kind of eating into it as well. Yeah, I agree. It just blows my mind how this happens every single time. And here we are. But I mean, it does sort of beg the question of what's happening with the market in general. I mean, we all know that Bitcoin is not looking particularly

strong here at $56,500 or so yesterday. I mean, one of the worst days that the stock market has seen in quite a long time. I mean, the CEO of NVIDIA lost $10 billion and his biggest wealth wipeout. A lot of people believe that when NVIDIA rolls over, so does the market. That hasn't been the case in the past. But yesterday, it seemed like everything sort of rolled over together. Interestingly, Bitcoin had kind of held sort of steady yesterday and dropped after. But, you know, I mean, do you think that what's happening with Bitcoin is a function of this

sort of macro wobble or do you think function of where it is in the cycle? What do you think's happening with the market in general? So I think it was interesting to see Bitcoin and the broader crypto market kind of weakening after the US markets closed. And it really kind of happened into the Asia hours. And it kind of shows you that crypto is still being used as a proxy for a lot of traditional assets. So when there's nothing else to trade, people are trading crypto, which I think kind of feeds into some of the quasi correlations that you're seeing. But we're still inside a very small kind of range with that, by the way. Like it's still somewhere between zero to zero point four, which typically from a statistical perspective kind of shows you it's a fairly weak correlation or very no relationship almost.

But I think just markets are getting really edgy ahead of the labor data that we're getting this week because we have jolts. We have nonfarm payrolls. I think markets may be preemptively just reducing ahead of that information because we're still not through the woods yet in terms of people being concerned about a recession and what the Fed is going to do about it on September 17 and 18. Even though you see that the preferred measures for inflation, like the PCE, they're in line with expectations. I don't think the inflationary trend has changed. But if the unemployment rate comes out on September 6, and it's enough to scare people, I think that that's going to dampen people's desire to put capital to work here. And we always see extremely volatile September ahead of elections, right? That happens to align with the crypto cycle,

right? Which is interesting because our four-year cycle is basically the election cycle, but I'm talking more about stocks. I mean, historically that September ahead of an election is one of the most volatile times of every four years. So nobody should be surprised that we're seeing these major ups and downs at this point. Yeah, I mean, the reality is, presidents and governments in general can do very little for an economy. But because of the election cycles as well, there's just so much disproportionate attention on their fiscal policies, how they're going to kickstart the economy if it's weaker, for example policies, how they're going to kickstart the economy if it's weaker, for example, or what they're going to do in order to kind of change

things. Okay, corporate tax rates, what are they going to, are they going to allow like this, you know, top tier 37% tax rate to kind of lapse, or is it going to go back to higher again for for higher income people, for example, like, how is that going to affect the economy? All that kind of just feeds in and weighs down market sentiment, I think. And I think it's very kind of hard to get outside of that. And we just happen to be in a period of time where things have been mostly doing pretty well. I mean, like, honestly, I think most people from an economic perspective would just be happy to be like, just stay the course. Let's just not do anything and just kind of keep it here. But I don't think that's going to be the case. And we are expecting some sort of change.

And we're just trying to understand how that change is going to affect us specifically. So I read that, you know, September is historically bad for crypto. But when you actually dig in, it's mostly sideways and a lot of indifference and low volume and candles that effectively open and close almost at the same point. I think it's kind of much ado about nothing. I think boring would be better than bad as a description. But we do have a sort of consensus that worries me because I'm a part of this consensus. QCP capital forecast potential Bitcoin rally in October after a near-term price dip. So the narrative that we constantly get now is you have this kind of bad, boring, choppy, whatever, September, and then you fly in October. October has typically been a

strong month for Bitcoin, averaging nearly 30% gains during the month and eight of the last nine years. So we have this sort of consensus trade that September bad, October good. I remember in the last cycle that literally hit the first of October and the whole bull run started. It was like midnight 1201 and Bitcoin went up 5% or something and never went back down. And it's given this grand fucking myth of October, but no guarantees there either. And it does scare me that everyone thinks so. Even me. Yeah. I never want to be part of a club that'll have me. Um, that's kind of what it feels like here. And, you know, we we've been saying this since, uh, at least early July, like our call had been that, uh, investors should be defensive in Q3 and constructive in Q4. And now it seems that a

lot more people are aligned with that view. And I feel the same way as you just got. I'm kind of just like, oh, God, that's not great. I don't love when positioning kind of gets too crowded and everyone wants to be in the same place. But I think it makes sense. I mean, honestly, Bitcoin's performance over the last month has been fairly disappointing. And I don't mean by its own standards. I mean, compared to what we've been seeing in TradFi, the recovery since the Japanese yen on wine, for example, has been like kind of caught the same kind of wave. And I think there's been aspects of why that's happened that are very idiosyncratic to what's been happening to Bitcoin. For example, we saw the supply overhang kind of getting wound down. But in early August, mid August, we were seeing that still kind of being eaten away at. I'm thinking Mt. Gox, US government, for example.

And for the most part, we know that a lot of those things are completed now. Like I think in the case of Mt. Gox, they only have now another 45,000 Bitcoin left to sell. And I think for the most part, all the ones done before that were the early payouts. But I think that that kind of puts us from a better perspective and from a better positioning perspective

as we get into October. But it's hard to kind of puts us from a better perspective and from a better positioning perspective as we get into October. But it's hard to kind of put capital into it with the uncertainty of the FOMC, the Fed meeting still kind of looming over us. So I think that's why people are looking at October and saying, like, once we get over that hump, then maybe a lot of capital can kind of flow in. You'll see unlocks from, say, like U.S US money market funds or FTX claims, things like that. And that could be a specific driver for what's going to happen in our space. I mean, $16, $17 billion in cash, not coins going to FTX creditors who are as like crypto native and passionate of any group you could find anywhere is pretty bullish. I have to imagine a lot of those people assuming that they actually don't need the money, which is a strong assumption because I bet most

of them do, but they're wanting to put a lot of that money back to work to your point. You mentioned Mt. Cox first of all. I don't know if you saw this. I just want to mention it. Former Mt. Cox CEO's new crypto exchange set to launch this month with transparency focus. This is Mark Karpeles launching it in Europe. No need to talk about it. I just kind of had to giggle when I saw that one. An interesting thought though, with this October and September expectation, I think a lot of people follow the narrative and superficially spit it out and talk about it. But I have a feeling very few of them are buying in September with conviction of that up in October, which gives me a little bit more hope that it could actually happen. I just don't think people have a bunch of spare cash right now.

I don't think there's much dry powder, certainly with retail. I think that people are probably just hoping and praying and not actually acting on it. it? Yeah, I'll concede that my own conviction levels have kind of moderated since I put first put out my, my forecast on, you know, defensive Q3, constructive Q4. And part of that has to do with I'm just not as certain in terms of the US economy as I was previously. And I think that the data we're getting just kind of very, very challenging to interpret. It's gone everywhere. And, you know, I never just kind of work in absolutes. Like if someone says to me, like, oh, I think that we could potentially have a weaker economy in Q4. You know, I will just say, like, all right, let me concede some of that. Let me try to look through the data, see like what I think.

And honestly, it's not fully I don't I'm not convinced that we're going to get a weak economy slash recession. But at the same time, I can never say never. We are our best signals, though, because you made that prediction. You said it on this show multiple times when you were here last spring, and you've been 100% right so far. I've gotten pretty lucky. I'm just saying, you're doubting it, but defensive Q3 was very right. And I would say for most people, even if, because I said the same in March, I said, we'll go down for six months

and then go straight up. But when you're in the sixth month of down, it's really hard to have the same conviction that the up is coming. And I think that's just human nature. And that's where time-based capitulation comes from. Price doesn't have to go down that far. People just lose patience and they absolutely puke at the lows. I mean, that's what happens, right? That's really what it is. I mean, you look

at something like Bitcoin. I mean, you made your entire performance for the year inside the better part of like 10 to 15 days this year said that yesterday he said don't get cute because you don't know when that 10 days comes but it's only 10 days yeah um but at the same time it's kind of what you're saying scott i mean like uh how people get bored people can't wait uh you know like how how long can you wait for nothing to kind of happen before you finally give up? And she's like, and then you capitulate. And then that's when the rally happens. You never know with these things, but that's the tough part about markets. Yeah. And the new sort of October argument

I've been hearing now is that people are starting to hedge and say up November because we have to wait till after the election. So we can only go sideways now until the election. And depending on the election results, we'll see what Bitcoin's going to do. I frankly think Bitcoin's in its own cycle regardless of the election. And I think that's just a narrative. Well, I think the election is important for crypto. I think it doesn't matter that much for Bitcoin. See, I disagree with that. I do think that the elections are important for both crypto and Bitcoin, in part because I think as we get closer to the elections, and I don't think people are doing it right now, but as we get closer to elections, and I'm thinking like two to three

weeks before the elections actually take place, I think you'll see a lot more investors kind of look at the entire spectrum of what they have in terms of, you know, investment options, and actually say to themselves, what do I use to actually play the election result? And at that point, you know, I think people may will feel a lot more confident about using Bitcoin or crypto, like more generally, to kind of say, like, this is kind of how I'm going to play this. And yes, we kind of understand the dynamics behind like what the Republicans versus Democrats are and how they, how they view crypto, for example,

or at least how people think they view crypto. But I think ultimately they're going to realize that it's asymmetric because actually if say the Democrats are in charge, we saw what Chuck Schumer said about the space for, in terms of trying to get like more crypto legislation in place, for example. Like I think things are going to be a lot more favorable because we are in a much more bipartisan kind of views for crypto like now than we were, say, a year ago. So even if you put your money in there with the expectation that like, oh, I want to bet on a Bitcoin strategic reserve, for example.

I think ultimately you're kind of come to the idea that even I don't get that. So I mean, better than what I had previously. So like this is actually a pretty decent bet. So I think that that's what we're going to see ahead of the elections. Yeah, I haven't fully formulated this thought in my mind. I sort of had it in real time yesterday on Macro Monday. But I actually think this is not a political opinion, guys, by the way, but I think there is an argument to be made that if you believe Bitcoin is a flight to safety, that actually a lot of people would buy Bitcoin if Harris won.

Like I said, it might be bad for the crypto industry because of fear of regulation and poor legislation. But if it's like a Silicon Valley type situation in the mind of Bitcoiners, where a bank fails and people run off and buy Bitcoin, or we saw Bitcoin go up at the Trump assassination attempt, Bitcoin does have a tendency on large macro events that cause fear, at least among Bitcoiners, to go up. So I wouldn't be surprised since Bitcoin sort of has the commodity stamp of approval. It's got the ETF. It's already sort of in the clear from regulation that a lot of people might panic. It's the same people who would say, I would move out of the country if such and such wins because of such and such reason, might buy Bitcoin for that same mentality. I don't know if that's... It's not a fully

baked theory, but I can see it happening. Well, I think there's like two things. I think there's Bitcoin as a safe haven asset within the crypto asset class itself. And then there's Bitcoins like safe haven properties outside of that. And by the way, I think that we were already seeing that for a lot of institutional investors, like there are fewer and fewer like kind of places to put their money because you don't put in private equity anymore. You can't kind of like say that everyone's up to the gills with that, for example. So I think that they are looking for a new asset class to kind of put their capital to work. And I think Bitcoin and crypto definitely represents that.

But I think, you know, certainly when we're looking at the fiscal issues surrounding either campaign, honestly, either Harris versus Trump, I think that it's enough to make people more nervous. And if that's the case, I think that yes, like Bitcoin definitely sits as a nice alternative to that traditional financial system. I think you made the most important point earlier, which is that no matter what happens, it's still a hell of a lot better than it was a year ago or 18 months ago, certainly. I mean, we lived in such fear the industry was going to be crushed. The SEC, they're still going, but going after everyone, no hope of

any meaningful legislation. Republicans hadn't even really started pushing back. I mean, at least the silver lining here is no matter what happens, it's become pretty politically unpalatable to be outright anti-crypto. That doesn't mean Elizabeth Warren will lose her power. I'm not saying that or that behind the scenes, those things won't happen. But there's not many politicians, I think, that are willing to just come out and join the anti-crypto army at this point. No, it's no longer like, like clearly a like a one party issue. You know, you're seeing that there are a lot of Democrats who actually have come out and we saw that with SAP 121, for example, and the way like a lot of Democrats came in to like vote for key crypto related legislation that you know, there are definitely a lot more, there's a lot more bipartisan support

here. It's not just a one-sided issue. Yeah, I tend to agree. So as we sort of come through these summer doldrums, are there any particular encouraging signals you're seeing on any of the chains? I mean, obviously Solana is kind of dumping off and I think their usage is down over 50% or something, but that we all know is because meme coin casino is slowly at least dying for the moment. I mean, any really encouraging signs or are we just in that phase where it's like usage is down, interest is down, by the way, that's the best time to buy. But what are you seeing? I think for Bitcoin, it's interesting because a lot of the investments that people have made into the layer twos on that network are starting to come to fruition. So we saw like the scalability solutions like Stacks and Babylon Chain actually just launch.

I think Babylon launched phase one mainnet on August 22nd. For example, Stacks is like has a has a huge upgrade. I think they called it Nakamoto, which started just a few days ago. So I think all these things, we're going to see how they contribute to it. Because I think this is important to the long-term sustainability of Bitcoin. Because as we know, with the halvings and things like that, miners are going to depend on fees a lot more for their revenue. So this is one way to kind of get towards that.

If we develop a real virtual machine or a way to play kind of like DeFi or other things on the Bitcoin network itself. But, yeah, I think that it's interesting to see like what's extensions on like Solana, for example, could be an interesting way to kind of also scale. It's interesting to see scalability feature so prominently for a lot of the networks. And how does that kind of stack up with Ethereum, which is what we talked about at the beginning of the show, you know, because I think that

like the concern that a lot of players, at least in the institutional side, I've had is how additive or extractive are the layer twos relative to the value of ETH itself. And really, you know, I think that that's, that's not really kind of putting it in the right context, because really, the problem isn't the fact that layer twos have been extractive to ETH value, but the scalability roadmap in

general, like if you were just including like scalability as just part of the L1 roadmap, rather than like using L2s as the experiment, like even if you burned all that E, like it still wouldn't be deflationary right now. And I think that's what people are missing. They're like, oh, it's because of the L2s. It's not just because the L2s, it's just there's not enough demand coming for the block space that we have in this period of the cycle.

And I think that there will be apps that will form the part of the Ethereum community and the Ethereum ecosystem, but it takes time to get there. There's also this moment when Ethereum or the layer one, whatever it is, is so cheap that the layer twos are useless for that brief time. You don't even need to go to a layer two right now for cheap transactions on Ethereum. Yeah, I mean, yeah, you know, I think that's the other thing. Well, to be fair, activity on Ethereum never shifted.

It was just like flat. You know, if you look at a chart, like and all the activity like pulled up on the L2s. But yeah, of course, you're like with blobs, you are, you know, it's like certainly I think for a lot of layer twos, like the sequencing revenues are definitely beneficial

to them. But, you know, I think that they are slowly pivoting towards using layer twos as the app layer. And I hear what you're saying, like, you know, like why do I need to go to an L2 if like the security on like Ethereum proper L1? It was simply for a cheap transaction, right?

Then they just go to TRON anyway. But it's still like, you know, fractions of a penny on an L2. So I think like, well, that will like create new use cases for a lot of the applications that are out there. Yeah, my feeling is that there's been a lot of huge news this summer. And it's going to be one of those things that whenever we do get that next bull market, we're going to look back and be like, how did we not see this? Or people will, they'll be like,

Larry Fink was literally like tokenizing treasuries on Ethereum. And we didn't see that as a signal because the cycle is always that way. So I think higher prices, all of a sudden the news becomes a lot meaningful, even in hindsight. Yeah, no, I agree. And I think just as human beings, we're just really bad at this. Like,

you know, like we're, we're bad predictors of things, which really kind of deflates me a little bit because I'm just like, man, this is my job to predict things. And, uh, and I think that like, I'm not great at it, but anyway. Yeah, I, I, I totally agree. Well, uh, we'll be back on to talk about it, uh, in the future for sure. Everybody follow David on X, of course, man. Thank you so much, as always, for your perspective. No, it was always a pleasure to be here. Thanks, Scott. See you soon, man. with lines and candles on them because we have texas west capital christopher inks and chris i would like to tell you in case you missed the beginning of the show that it's official ethereum is in a death spiral yeah i saw that it's dead it's over um it was also over as i

mentioned to him uh in 2021 when there was a clubhouse about the death of ETH party, which was the generational bottom. And I would just kind of like to remind people that these tend to be bottom signals. And I'm willing to say that ETH is bottoming. I want to show you a chart too before we get into it because I wanted to save the chart for sort of you. I brought it up for a second, but this is the ETH Bitcoin chart, obviously in a major downtrend. No denying that. When you take a look at it on the weekly, the big bottoms have always been oversold. We'd hit that. That has not happened.

But we have some pretty serious bullish divergence coming out of oversold RSI brewing here on the ETH Bitcoin chart. And when you go down into the daily, you have oversold RSI with huge bullish divergence forming and formed right here, which I know like me is one of your favorite signals. So we have death of Ethereum. It's over. It's dead. It can't exist. It's a scam.

And we have a chart that to me looks pretty bottomy. I want to remind people when people like Chris and I say bottom is in, we're talking about a process, not a price. Yeah, exactly. Bottom-ing is a process that can take a long time. It's not like, oh my God, it ended up going 4% below when he said it was the bottom. It could form more bullish divergence. I have no idea.

But to me, this looks like a chart that's bottoming. Yeah. I think there's a lot to be said about it. I mean, you bring up a great point there. Bottoms and tops are processes, right? They're not singular events. The high and the low are just events, right? It's a thing that happens. Whereas the process of bottoming or the process of topping are these things that can take a while. Because when you think about tops and bottoms, it's the movement of supply from one set of hands to another, basically. And so if it's a top, it's the movement of supply from retail's hands into the, or I'm sorry, the supply from the longer term professional holders into retail's hands. And at the bottoms, it's the, the move of supply from retail into, um, into those longer

term holders. And what we usually get, as you mentioned, um, you know, and it's an absolute great signal if you learn how to do it, um, is this idea that, you know, Ethereum's dead. Oh my God, Ethereum's dead? Oh my God, Ethereum's dead. Bitcoin's topped out for the cycle. You know, all these things, these types of things are not what you hear at the top. These are what you hear at the bottom, right?

People get out the top when things are exciting and when people are feeling bullish as hell and it's euphoria. In the bottoms, it's when everybody's given up. When they're like, that's it. It's over. We can think back. If anybody can think back, it was a long time ago, but when we were around 15,500, 16,000 on Bitcoin, just a couple of- Had to go to 10. had to go to 10, but yeah, you know, and lower even, right. I mean, it was definitely going to 10, but it was most likely going to three and below a thousand. And, um, you know, and what it was, it was up only since then. Right. And then we've had two periods of sideways here of, of, uh, you know, five to seven months, this being the second one.

Um, and, and this one coming up at the top, you know, five to seven months, this being the second one. And this one coming up at the top, you know, around the all time high. But again, the idea is everybody's extremely bearish. And this kind of sentiment doesn't usually happen when you're at the top. At the top, everybody's bullish. That's why it becomes the top, right? That's retail's bullish, they're selling into or they're buying into what's being sold to them. So, you know, when we look at this, we go, okay, well, it seems more likely that it is accumulation. And again, when we're looking at, you know, volume here within the range and whatnot, and then we've got this huge spike of volume right here. So for me, and beyond that, you know, I've got this as a wave four. So, you know, wave four, the initial target's usually around the 38.2 retracement, which is about where

we got. Now, again, as I've said, I think that may be the bottom. We could go lower though, and it wouldn't be, I wouldn't feel any different. I wouldn't feel more scared, you know, because we dropped down because I know the secondary target area is usually around the 50%, which is on this chart around 42, 856. So for me, I look here and I go, okay, well, it does appear to be one, two, it does appear to be three, four. So it's hard for me to get really down in the dumps and worried about it. For me, you know, if we were to drop below here, this becomes a huge buying opportunity for me. Rather than just Yeah, right, rather than just assuming Oh my god, that's the end of it. And so you know,

right now locally, I've got this as potentially a leading diagonal here as a one. We've got an A and B working on a C here. We could see it continue to come down here. We've got the hourly S1 pivot right around 54,912. So we could potentially see that. Shoot, we could even see a really deep pullback here to the daily S1 pivot at around 50,300. Wouldn't bother me at all. So what am I looking for then? Well, for me, I'm looking for a breakout above this swing high here at 61,202. If we can get a breakout above

that swing high without dropping below this swing low here, to me, that would suggest that that low is in. This is a one and then wherever we are with the two and we're heading for a three um to work ourselves up toward that you know that all-time high and potentially higher off that so as far as bitcoin goes i mean you know that's where it is it's about you know it's about having patience right it's about you know just ignoring all the noise um you know most of the people that are really bearish right now are the same ones that have been bearish for the last two years uh you know especially when it comes to you know trying to find all these economic indicator reasons why you know the stocks had to

go down over the last two years uh instead they've continued to rally right and same thing with bitcoin people have been arguing since 16 000 that Bitcoin was going to go lower and they're still arguing about it today. So most of the people out there that are bearish here and said that the cycle top has to be, you know, those same people, not all of them, but most of them. So, you know, take it with a grain of salt, folks, you know, apply some logic to it. Look at what everybody's kind of saying right now with the with this idea that everything's dead ethereum's dead you know bitcoins uh you know topped out for the cycle and all these things um and then understand that all this is happening right off the top and and when you see that you know that should really get you

kind of looking at well you know nothing's guaranteed obviously but generally speaking in markets that that's not usually a top signal. It's usually a, uh, you know, a bottom signal at a, you know, an accumulation or re, uh, reaccumulation type signal. So that's what I'm kind of looking at there. So assuming we're not dead, uh, it means that there might be some other charts worth looking at. What else are you looking at at the moment? Uh, I've got a few, uh, you know, things are kind of iffy, uh, when it comes to alts, but I found a few here. Um, so I've got a few. Things are kind of iffy when it comes to alts, but I found a few here. So I've got this first one, which is mover, M-O-V-E-R-U-S-D-T.

We've got what it appears to be in this descending wedge here. We've had some good back and forth here. We have this dip below here as well, which kind of then led to this breakout here. And so for me, really a mover, I'm kind of looking for a breakout above this descending resistance up here. And likely that's going to happen, you know, that would happen right around this low volume node over here at about $12. So if I can get that breakout above $12, you know, you've got a nearby target here of around 1770 or so. And then we've got another target up here, right there around 26, almost $27 there on that. But, you know, I'm not trying to look for a, I'm not trying to catch a falling knife

here. I'm trying to look for that breakout I'm not trying to catch a falling knife here. I'm trying to look for that breakout, um, above this descending resistance above this previous swing high, uh, which takes us right into the low volume node. So, um, if we can do that, you know, that gives us basically five waves up there, potentially up higher there. Uh, it gives us a good setup to get toward those two targets. So, you know, I'm watching it. We'll see how it plays out. I'm not in a hurry. I've got this, I don't know how it's pronounced,

probably carrot, but it's K-A-R-R-A-T. Yeah, it's funny. They're all the same setup. No, you just, it's all coins. It's like throw a dart to so many of the similar setups. Yeah, yeah. This one right here, I even like this one probably a bit more. Uh, it's, it's a much cleaner wedge here. Um, and then we've got

this, you know, again, you can notice you've got a lot of small candles overlapping. You've got a, you know, volume dropping off throughout this, what you'd like to see. This is the daily, uh, daily RSI is almost reset into oversold. Stoke RSI is bottomed and oversold, and we're nearing the S1 pivot. So when I see a chart like this, what I'm usually looking for is a reversal around this area. Okay, so from where we are to that S1 pivot, which is right there around 27 and a half cents. And so then what I'll want to see, my first target would be this descending resistance. And if we can get an impulsive breakout and close above it, then I would be looking for it to take out this low volume note here to pop up through it and probably get us up,

you know, I've got an initial target right here around, I guess, probably about 54 cents or so. And then once, if we can get through that, I would just be looking immediately right about this kind of area here at about 70 cents off that. Usually when it comes to wedges, folks, when you have like a descending wedge like this, and you get the breakout, usually it's going to, its target is right up here toward the top, not necessarily the very top of the wedge, but at the beginning of the wedge where you have all that overlapping price action, that's usually the target area on the wedge. So just a simple pattern target based on breaking out of the wedge, heading up. Let me see here. And then I've got one more here. I've got, excuse, excuse me, GOG USDT. Uh, again, same kind of

idea. We're kind of getting this, uh, potential descending wedge kind of thing going here. And really the wedges are just, you know, price action going from expansion into contraction. That's what we're looking at. Um, and that's why wedges, uh, if they are wedges, you're usually going to have an impulsive breakout or impulsive breakdown. If they're up, you usually see a strong shot because it is that expansion to contraction. And we know that once contraction ends, you usually have a big breakout, right? Usually we thought of when we're going sideways. But here, it's just in the wedge.

And again, kind of coming on down here. This again is the daily here. We have RSI here nearing, you know, a breakdown, but right now it's giving us this. If we look here, we've get this lower lows here in price and we're getting these higher lows here. So we're getting this bullish, potential bullish divergence showing up here. But again, Stoke RSI hasn't quite dipped down and oversold yet. So, you know, I would look for this to potentially come down and hit the support or maybe even do a throw under and back up into it. But again, we're still looking for the impulsive breakout and close above that resistance to signal that that wedge may be complete. Initial target would be the the daily pivot here which is 0.045, 0.0456 area and once through that again

wedges you're looking for that where they kind of get that overlapping price action up toward the beginning of the wedge so that gives us a target then up there at 0.083. The odds are if we get up there, you know, the bottom is probably in, you know, and we'll head up even higher. So, you know, we could head up here to 26 cents or, you know, 31 cents and break out even. But you do have a low volume node here. And so what that tells me is if we were to get to this area, what we'd probably do is get a push up a little bit into this node. We'll pull back and then we'll get a strong kind of candle pushing up through it as we kind of get up through that. So, you know, right now, like I said, there's nothing that's really a lot of fun right now.

But these look like some potential setups that I'm kind of'm kind of watching uh here in the crypto market makes perfect sense i think uh i'm just happen to be like while you're doing it i have this uh screener from a wick you know trading alpha i don't know if you know him yeah but um so you put on crypto put on daily this was made my life so which rsi bullish divergences check this out just because you know i love it here let's take a look so solana usd it shows bullish divergence i oh well there's a we're getting it on the line chart but yeah huge bullish divergence right there right yeah uh i mean you look how many of them there are i mean they're all literally over the place i bet if we go to four hour they're going to be a million of them.

RSI divergence is searched. I mean, this just makes me think that this is kind of bottoming right here. I don't know, man. There's a lot of bullish. There's a big bullish divergence right there. I don't know. I'm seeing it kind of everywhere, including Ethereum, Bitcoin. I think things could be looking up here.

Yeah. I mean, it's looking good. But again, we talk about it and we can talk about it all day long. And the reality is though it has to follow through, right? So as market participants, as traders, as investors, our job is to find the setup and then look for the confirmation. And then along the way way apply proper risk management if you do that you're going to be a lot further ahead than you won't but unfortunately you know most people get into the markets they don't do that right they're looking to get in right now and make money over the next three hours uh you know and get out with profit you know heaven forbid price can't ever go against them um You know, those types of things. But that all that emotional

stuff is what kills you guys more than anything out here when you're trading. So, you know, get a hold on the emotions. If you don't know how to do that, find out how to do it. You know, again, you've got Google, you've got chat GPT, all these AI things. There's a lot of ways to, you know, help you figure it out if you're not willing to go with somebody else, you know, to kind of teach you about it. it but other than that you absolutely have to use proper risk management i get so tired of hearing people oh i don't use stop losses as long as i don't sell i'm not losing now you're losing folks you're losing um you know it always comes down to this if you could get out of a trade and lose just 1%

and then get into a trade in the proper direction and make profit, that's infinitely times better than getting into a trade and holding on for years, holding that bag for years as it goes against you. You know, not only do you have the mental and emotional aspect of that, right? That's, it's really damning against you, you know, not only do you have the mental and emotional aspect of that, right, that's, it's really damning on you. But you also have the missed opportunity cost, all the money that you could have made along the way by going the right direction, just by taking

the proper, you know, proper risk management loss that you needed to set yourself up for going the right way. So, you know, most people have an aversion to loss, you can't have aversion for loss in trading, you're going to lose from time to time. And the newer you are, the more you're going to lose and the more often you're going to lose it. Once you get over that, you figure out the importance of risk management, proper risk management. You start doing that constantly, consistently every time you trade. And that way, you know, you understand again that you're going to lose from time to time, but it's nothing that's going to kill you more often than not and still make money. Yeah, exactly. Exactly. And then that's the game that that's what it is. That's the game. All right, man. Well, everybody,

if you want more of that insight, you can follow Chris at TX West capital and everything he's got going on. He taught me, he can teach you. Uh, so Chris, I'm gonna let you go. Keep going for a few more seconds, man. Thank you very much. Appreciate it. Have a good one. So guys, I just wanted to say thank you to a bunch of you who obviously signed up for the new website yesterday, which launched, we launched it arguably the worst day of the market in history, the day after Labor Day, market dead, things going bad. And the feedback has been really, really, really positive. I just wanted to show you, for those of you who are members, I give you the opportunity. I want to show you one thing because I did this interview. We wanted to keep it fresh.

So I did it yesterday. Boy, I had Dave Weisberger come on. You can see he's very animated here, just explaining the carry trade. But I had Tom Dunleavy, who you guys have seen a lot of times. He's the head of research at Masari. And he came on, he had tweeted about Deepin and he's writing a huge Bible on Deepin, obviously decentralized physical infrastructure networks, which is a huge narrative in crypto. But in this specific video, he literally laid out four platforms he's using to passively earn every single day where you literally have to do nothing. And so he says he's using to passively earn every single day where you literally have to do nothing. And so he says he's making about a hundred bucks a day on these, basically either running a node or literally just bring up the website, hit a couple of buttons, run it in the

background and never stop, never look at it again. And he's making 50 to a hundred bucks a day. I didn't know about this. I'm actually setting them up myself. So if you're on there, I mean, I know it's a $39 to join the platform, but he just gave you something that'll pay for it in a day and will pay for the entire year in six or seven days.

But I had no idea. This is the kind of thing I care a lot about having on the show in general and on the platform is I would never look into anything about farming airdrops or any of this. And it's literally just incredible. You passively, passively make 50, a hundred bucks a day. He's doing it right now. It's right there. So really worth checking out. Of course, that's

the wolf of all streets.com. That's all I got for you guys today. I will see you tomorrow.