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While the headlines are focused on the $70k psychological level, the "Worst Chart in Crypto" is telling a much darker story. In today's episode, we break down why the current price action is entering the most psychologically challenging phase of the cycle and what the Max Pain theory suggests about where the market is headed next.
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All of our videos are strictly personal opinions. Please make sure to do your own research. Never take one person's opinion for financial guidance. There are multiple strategies and not all strategies fit all people. Our videos ARE NOT financial advice. Our videos are sponsored & include affiliate content. Digital Assets are highly volatile and carry a considerable amount of risk. Only use exchanges for trading digital assets. We never keep our entire portfolio on an exchange.
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Do you feel uncertain about where the markets are going from here?
With everything going on from the Trump administration,
stock market absolutely on the edge of a major pullback,
and now oil is acting like a meme coin,
there are many reasons to be sitting with a little bit of doubt.
The uncertainty index of the world hit last month
and we had already doubled the markets uncertainty
that was experienced during the pandemic shut down of 2020.
We are dwarfing the Iraq War and 9-11 as things sit on the edge of the Abyss right now,
and Donald Trump's administration and Pete Hexeth have come out just to alleviate fears
by saying that we are now entering the most intense day of Operation Epic Fury,
imminent as the IEA is planning the largest ever strategic petroleum reserve dump.
It doesn't sound like things are steady, Freddie, out in the world,
and now we have to dive into what does this all mean.
Well, first of all, I must clarify what the world uncertainty index is.
The world trade uncertainty index also known as the WT UI.
And this is a global metric.
Now, really, when we boil this down,
it quantifies the overall sentiment by considering the occurrence of positive and
negative words in the economist intelligence unit country reports.
This is market sentiment of stability.
If you read out loud what the American Republic has just done over the last two months,
you would think that I'm describing to you a movie novel.
We have heads of state taken out with missiles.
And now we have a shutdown of a global economic hub,
a straight-up arm loose, which moves 30% of all the world's oil,
34% of all the world's fertilizer,
and now people are unsure how the food industry is going to look six months from now.
Now, when I was asked about which way Bitcoin will go when this conflict began,
I was being a little bit facetious but also serious in the fact of saying that we'll see a slight
pump rising from the midpoint by about seven percent.
You know, it looks like we're not dying in terms of Bitcoin's price, which is great.
We're sitting right around $70,000 and we've seen market openings over the past week.
Give us a nice little pump to the upside.
Now, this is very similar to the Venezuela time frame where we were
writhing around kind of sitting on certain and then we had a nice little pump up to $98,000.
But then subsequently followed by a massive move to the downside down into the 60K region.
So I must emphasize the data I'm about to show you does not paint the picture that we are
completely out of the woodwork yet, not at all. But there is quite a hopeful outlook to this
as I compared some of the metrics of how Bitcoin's reacted when it's found that bottom zone
and where we're at now.
And why this uncertainty metric at the beginning of the video matter so much is higher uncertainty
generally translates into lower investments, slower economic growth and increased financial
volatility. Anything about the locations in the midst of all of the chaos right now had just
promised trillions of dollars in economic investments into the United States in the way of AI,
data centers and power generation. Now that the gloves are off and the things have gotten a
little bit feisty across seas, we might see some of those investments divested. Now, if you
watched the channel, you would have noticed a few weeks ago, me and crypto crank had found
something quite sketchy with the S&P 500 before all of this chaos started breaking loose.
We started to see the weekly wicks start to be eaten up and flatten out and basically turn into
this kind of flopping motion on the S&P 500, which pointed to some downside. A market
side for B, there's also a divergence to the downside, a bearish one when you see the momentum waves
eating smaller and smaller as the weekly candles went through their process. Money flow is also
pointing down as this is happening with all that being said, a wash out to the downside is quite
normal for the S&P to have, but really what we're seeing here is a potential for the S&P 500 to pull
back by about 20% from the previous peak. I would take it from a 7,000 mark down to right in the
guts of this green box where I have highlighted from my heavy buys on stock market picks in about a
5500 point level. Also notable that G himself crypto phase put out this post today, pretty sure that
the S&P 500 is going to get bloody very, very soon. It responds quite well to market cypher's money
flow and it holds out as long as it can, but after a few weeks of just entering a negative flow,
she gives way and breaks down. Any highlights very concise so that oftentimes we do see the S&P 500
make a big break to the downside, a nice correction before moving back up. An interesting to note,
he is highlighting here the January and middle point of 2022, which we're going to get to here later
on in the video, so make sure you stay tuned. Now with all of the events I just described, we have
seen the Strait of Hormuz shut down. We've seen massive news articles about minds and insurance
agencies hiking the rates on these vessels and really refusing to ensure them as we're entering
the stage of a full-out war. Oil is starting to act like a meme coin as well. We have massive,
massive movements in oil. Now, if you notice how slight the movements were previous to this,
where oil was right at around $60 a barrel, over just the last few days, we're starting to see moves
in the day of up to 42% upswings and then a massive downturn. This is causing investor whiplash
as we're seeing the price of oil in barrels give people complete uncertainty and really,
if this conflict does continue and China doesn't have its oil flow from Iran,
it's also been cut off from Venezuela, we might see this number increase drastically. And as this
is happening, international energy agencies, 32 member countries unanimously have agreed to release
400 million barrels of their own strategic reserves. Cracks are starting to appear in major
players in Wall Street from JP Morgan being forced to mark down loans. It has decided to reduce
lending to private credit groups. This includes Blue Al, Blackstone, BlackRock, and now JP Morgan
themselves. I'd be also playing into this is the credit card delinquencies are going rampant.
This graph shown on the screen does a good job in explaining this with some of the heaviest
hit areas being Alabama, Mississippi, Louisiana, and Arkansas, but people are surviving off of
credit cards. The average middle and lower class person is barely surviving in these economic
conditions and inflation is tearing them apart. Even while we see the CPI data come out,
all things are generally flat, it being lied to and people are recognizing it. Now when it comes
to Bitcoin, Bitcoin is how I've been able to outpace inflationary pressures on myself and my family
over the course of the last few cycles here. And with the recent rally in Bitcoin, there are some
hopes that maybe we're out of the woodwork is from both theory 300 billion dollars had been
added to the crypto market since Jane Street had gotten sued and the US Iran war began. Bitcoin
has surprised everyone by surging by $10,500 over the last week while most people expected it to
crash amid the uncertainty. So now here's the fun part. We look at the nuts and bolts of Bitcoin
where it sits right now in comparison to the last time Bitcoin was giving off this high of a
fear metric. The last time we saw this type of cataclysm to the downside, pulling Bitcoin down
below the price to produce a Bitcoin per coin. This is where the buying the blood happened. This is
where the awesome entry points are found is by buying it when it's low and getting ready to sell it
when it's high. And I'm not going to lie, this is my favorite time to cover crypto because the
prices are cheap and I can get entry points at a deep, deep discount. Now where Bitcoin sits right
now is looking a little bit fuzzy. Oh wait, never mind. This isn't the current graph. This is June
of 2022. No, this is the current graph of Bitcoin where the price is sitting. There's some odd
similarities between these two charts, right? And as you see this says right after Celsius had
collapsed, we had cascaded to the downside and found a momentary point of support at around $17,000.
The price to produce Bitcoin was $19,000 at this time. Currently where things sit, we had just
seen that massive cascade to the downside where things sit currently. We have had just that massive
cascade to the downside where Bitcoin fell to 59K and the price to produce on average sitting
in around $74,000. And it looks like we're trying to dig ourselves out of this, but really if I
compare the two time frames, there is very clear similarities between these two capitulation
moments and we must acknowledge for what they are. So after the capitulation of June 2022,
we did end up rising by a pretty good amount for some time, pumping by about 42% over the course
of 59 days. Now where we are currently leaves some definite options to the upside. From capitulation
moment to where we're at right now, only 33 days into this and we've risen by about 19%.
Some of the opinion that we absolutely can have the potential to start making our way back up to
the mid 70s over the course of the next 20 days. But there is something very, very key that I
must show you on this video today. And I don't think anyone is out there talking about this.
When the bear market took hold of Bitcoin last cycle, we must acknowledge that Bitcoin was not out
of the woodwork when we fell down to 17,700 bucks. No, the actual bottom was in the $15,000 range,
155 to be precise. So we're going to do some fun math here. We're going to see how much lower
Bitcoin had to drop before finally hitting that Max Payne moment. We had to drop by another 11%
from 177 to find that true floor. But generally speaking, if you were buying like me during this
massive pullback, you were a happy camper as Bitcoin went on to rally to $126,000. So that being said,
let's go take at our current timeframe and look at what a 10% drawdown from the bottom of that
week would actually look like. 10% lower than the absolute paying of 59K. Well, folks, that brings us
down to the wonderful level of $53,000. And you know that number sounds quite familiar because it's
actually the point of our previous range after ETFs got released that I was actually looking for
Bitcoin to show its strongest hold point. $53,000 is the bottom end of the range, the original
stumble point before we found our new all time highs. And really a point where I think Bitcoin
absolutely can defend itself. So looking at this graph, generally speaking, I feel like we're
developing the bottom where we sit right now. Sure, we can keep pumping up a little bit to the
mid 70s. But I think a final wash out down to the low 50s is a reasonable thing to be looking out for.
I am actively buying this range, but also prepared to buy Bitcoin if we get near those low 50 levels.
We are not near out of the woodwork yet, as we have to see the straight up from most open back up,
we have to see some of these tensions walked backwards. And if these tensions across the world do not
let up, there is no telling where this market's going to go. But I feel the sentiment is just as
scared. There's so many people out there considering this to be over. It's done. Walk away. This feels
exactly like the pandemic wash out. And when I looked at the world uncertainty index being twice as
bad, currently, then it was when I made life changing moves and hammered my life, saying we can
say to crypto, I got to tell you if I'm not buying this dip, I'm dying. This is how I've done this
for years on end. I'm excited about having the opportunity to get this information out to you.
And if you think that we are actually headed to the upside way quicker than people believe or to
the downside, let me know down the comments. Let's have a discussion about it and I'll keep you
up to date with all of this information as it comes about. I hope you're holding strong and I'll see
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