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- [00:00]
Glenn Goodman
Many slash most professional traders do not buy while things are sort of on the downtrend. Right. And I don't just mean the plummet. I mean, everyone's heard that phrase, don't try and catch a falling knife. And obviously the knife in the stock market was falling pretty vertically in recent days.
- [00:27]
Host of Markets Daily
Good morning and welcome to Markets Daily. If you've been watching financial markets, you'll know that they've experienced significant volatility lately, largely attributed to President Trump's aggressive tariff policies. As investors grapple with these developments, many are wondering, should I take the opportunity to buy the dip, or should I exercise caution to provide insight? We are joined today by Glenn Goodman, the author of the Crypto, to explore strategies for navigating the current economic climate and talk about whether it's prudent to buy the dip during these uncertain times. Glenn Goodman, welcome to Markets Daily.
- [01:03]
Glenn Goodman
Thanks very much for having me.
- [01:06]
Host of Markets Daily
All right, the question on everyone's mind, I think, in recent days, is, should I be buying the dip? What is your response to folks who are wondering that?
- [01:15]
Glenn Goodman
Personally, I mean, everyone has their own trading style, but personally, I, and I would say many slash, most professional traders do not buy while things are sort of on the downtrend. Right. And I don't just mean the plummet. I mean, everyone's heard that phrase, don't try and catch a falling knife. And obviously the knife in the stock market was falling pretty vertically in recent days, but now today we're seeing something of a rally upwards, and not just in stocks, but also in Bitcoin as well. So many people might be thinking, well, you know, this is, this is no longer a downtrend, the knife is no longer falling, so surely I should be able to, to buy now. Personally, I wouldn't, and as I say, many professional traders would agree with me. The reason is that if you look at the chart that I've prepared, you can see that we've had a series of lower highs and lower lows in the market. I, I've drawn a blue line there just kind of. So you can see that sort of downward staircase. What traders tend to like to see in that scenario is the downward staircase move into a kind of sideways range and then become an upward staircase of higher highs and higher lows progressively. If we skip the middle bit and just went straight from lower highs and lower lows to higher lows and higher highs, that can sometimes be a bit of a bull market trap and you end up basically not going up in the way that you expected. Sometimes it's a Bit of a false start and you head back downwards. So that's a bit more of a difficult scenario to judge. But what I would really like to see, as I say, is a bit of a base building up after those lower highs and lower lows. I'd like to see us go sideways for a while, which prepares us nicely to move into higher highs and higher lows. So, as I say, really after a knife stops falling and you get a little rally upwards, that doesn't necessarily mean all the pain is over, because it could just be leading to another lower high.
- [03:34]
Host of Markets Daily
All right, so basically you're saying you'd prefer to see a little bit of stabilization in the markets before. Before you invest more money into it. Now, I have to ask you, you know, it seems like everyone on TikTok is giving investment advice lately, and they're really saying, you know, out, even outside of crypto, stocks are on sale. Crypto is on sale. What I'm hearing from you is we shouldn't listen to this advice that we're hearing on social media, and we should be a little smarter about how we look at the price movements when it comes to crypto and even when it comes to the stock market.
- [04:08]
Glenn Goodman
Well, in my book, the Crypto Trader, I tell the story of William Goldman, who was a major screenwriter in Hollywood, and he wrote a great book that I read many years ago about his adventures as a screenwriter. And he has this one famous quote, no one knows anything. And what he meant by that was, when somebody brings out a film or writes a film, starts putting, putting it into production, they have absolutely no idea whether it's going to become popular or not. You know, obviously they'll have a view. They'll be like, this is going to be the biggest film ever. But actually, they. They could be wrong as easily as they could be right. And the same goes for influencers on Twitter or anywhere else. Anybody who gives you predictions about where the price is going to go, if you look back at their record, and I'm not going to name names, but there are very prominent analysts who started off in the stock market and then sort of moved into crypto. And these people who I won't name have got track records going back 15, 20 years that you can check where they make market calls regularly. And those market calls are wrong just as often as they're right. It's a coin toss. It's pure guesswork. Nobody knows where the market is going next. So the only way that you can get an edge in terms of prediction is by doing the kind of thing that I'm talking about here by just looking at where the trend is actually going and working out where it's likely to go next based on its just current, its current shape, its current price action. But yeah, just please ignore those voices who just go, now's the time to buy the dip. It's definitely time. You know, some of these people have like a million followers, but they, you know, they will bankrupt you, these people.
- [06:00]
Host of Markets Daily
Where do you see bitcoin going? What is your. And you mentioned it there. What's your longer term outlook?
- [06:06]
Glenn Goodman
Longer term is actually easier to look at at the moment. And again, I don't make predictions because no one knows anything, but I can certainly see where the trend is heading. And if you look at the chart that I've prepared, which shows the longer term history of bitcoin going back a few years, you can see I've drawn that red line which indicated that it was starting to go up in a parabolic fashion, as it had done many times before, of course, in the 2017 boom, in the 2021 boom, and even earlier than that. Bitcoin has a habit of starting off slowly, building momentum and just getting faster and faster and faster. And that's actually what we've been seeing since 2023. But you'll see on my chart there that we had got a little blip downwards below that red line, which is a little bit skipped scary over the past few days and starts to imply that maybe, just maybe, we're no longer going to be moving upwards in that parabolic fashion. And that would not be bullish for bitcoin. It doesn't necessarily mean that the bull market will be over, but what it does mean is that we wouldn't necessarily be moving upwards into that kind of exponential growth that we love to see towards the end of every bitcoin bull market every cycle. But having said that, far too early to jump to that conclusion. As you can see on my chart, it's just a little blip at the moment. In order to call that red line no longer relevant, we would need to see a significant amount of sideways or downward movement. Until you can conclude this isn't just a quick blip through that red line, you know, we would need to see lots of activity below that red line for us to conclude that it's definitely no longer valid at this point in time. My default response would simply be to say that was hopefully a blip and the parabolic growth will continue some point soon. I know that seems like a brave thing to say at this point in time, parabolic growth will resume shortly. But as we can see, it's been going on since 2023. Little blip the other day, which is a bit scary. But as things stand too early to conclude that the parabolic growth is over.
- [08:28]
Host of Markets Daily
Well, I'm taking a look at the chart here. It looks like we don't expect to see new all time highs anytime soon. Is that correct?
- [08:38]
Glenn Goodman
Not necessarily soon, no. I mean, because we've got a long way to go back up, haven't we? We've got to go all the way from, what is it, sort of 77, 78,000, all the way back up above 110. That could take a while. But then again, you know how these markets are, they can jump back pretty fast. The stock market is climbing as we speak, climbing quite fast. It's not inconceivable that it could just completely surprise the hell out of everybody by just shooting upwards and making a new all time high. It's not out of the bounds of possibility. If you look at the history of the stock market, that kind of thing does happen from time to time. And of course we got a big sort of flip back in 2020 when we had the COVID crash. And then the market recovered, not, not immediately, but pretty quickly. And we could get that kind of snap back this time, as I say, not out of the realms of possibility.
- [09:42]
Host of Markets Daily
Let's talk about the stock market. You know, ever since those Bitcoin ETFs were approved, and some would argue before, Bitcoin has been very correlated with the stock market. What are you seeing now? How are you watching Bitcoin in comparison to what the stock market's doing?
- [09:57]
Glenn Goodman
I've been kind of quite chirpy lately. I've been quite happy because from a cryptocurrency point of view, or at least from a bitcoin point of view, it held up so well during that stock market crash. And previously I've, you know, when people ask me what I think will happen if a stock market crash were to happen, my general view has been, well, the stock market has been following tech stocks pretty closely these past few years, as you can see on my third chart. And the thing is, when it follows it that closely and there's such a strong correlation when it's going up normally, I would expect to see an even stronger correlation when it starts going back downwards again. Because actually if you look at stock market crashes generally, say like the 2008 crash, which was monumental, pretty much everything goes down at the same time. Not Absolutely every asset in the world, but most assets, assets that had absolutely no correlation to each other whatsoever, they all start plummeting simultaneously. And we actually have seen that with many assets over the past week or so. As the stock market crashed, even gold and silver were falling, copper falling, all kinds of assets. Pretty much everybody's just selling everything. And yet bitcoin, yeah, okay, it's gone down, but as you can see there, not by very much. And that is really impressive. So people have started talking about a possible decoupling from the stock market. I think it's a little bit early to, to start saying, yes, it's decoupled, it's the end, because you know, it'll, it'll just leave everyone with egg on their face when it recouples again in a few days time or whatever. You know, that can easily happen. Let's give it a little bit longer first before we start celebrating the great decoupling. But nonetheless, it is an encouraging sign that hopefully in the future and the not too distant future, and that we could see bitcoin really acting more strongly than the stock market does, that actually there's more underlying confidence, bitcoin amongst investors than there is in the US Stock market. I find that pretty fascinating and pretty exciting for bitcoin. The rest of the crypto market, not so much.
- [12:15]
Host of Markets Daily
Glenn, thank you so much for joining Markets Daily today.
- [12:18]
Glenn Goodman
Thanks for having me.