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The Wolf Of All Streets
Bitcoin Plunges On Shocking CPI Report – Is the Crash Just Beginning?
00:41:13
Bitcoin Plunges On Shocking CPI Report – Is the Crash Just Beginning?
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- [00:01]
Scott Melker
CPI numbers came in hot, proving that inflation is sticky and bitcoin does not like it. Bitcoin dropping down below $95,000 on the news, although bouncing nicely at the moment. We expected a lot of volatility around cpi, but this leaves the Fed in a bit of a bind as to what to do next. We're going to talk about this and everything, crypto with one of my favorites, David Young, head of research at Coinbase. You guys don't want to miss this one. Let's go. Let's dope. Let's do. What is up, everybody? I'm Scott Melker, also known as the Wolf of all streets. Before we get started, please subscribe to the channel and hit that like button. David and I decided right before the show that we're going to wear our bitcoin hats and form a boy band.
- [01:05]
David Young
Yeah, no, that's right. That was always my alternative plan and now we're just going with it.
- [01:09]
Scott Melker
Although I said, Tim, I'm 48. Maybe it's a man band. That's the thing. Can you form a storm?
- [01:17]
David Young
Push ups on Twitter, by the way, I'm sure I've seen that clip that put it post by your wife.
- [01:22]
Scott Melker
Yeah, I'm sure. But maybe a man band is just a former boy band, but you can't start a man band. I don't know.
- [01:28]
David Young
Yeah, I mean, there's going to be far less dancing, that's sure.
- [01:33]
Scott Melker
Far more ankle and hamstring injuries if we do. But all right, anyways, let's talk about cpi, obviously. So we had this somewhat hot CPI print that just came in. Actually, let me just bring it up over here so that we can actually see it. What we got here is that CPI coming in hot 0.5% month over month. The expected was 0.3%. So that's actually a pretty sizable gap versus expectation. Core point four with month over month 0.3, CPI 3.0, expected 2.9. This is for the year over year and core 3.3 with expected 3.1. So usually, you know, obviously where people are trading or markets are reacting to what happens versus expectation, not what happens in a vacuum. Right. So being point two over is a pretty big gap. If you're expecting 0.3 and you get 0.5, that's a much bigger gap than we usually see.
- [02:25]
David Young
Yeah. And the big concern is what does this do to inflation expectations? Because inflation expectations have been creeping higher and it's been a matter of like many, many issues. Right. Tariffs are one of them. But some of these Things represent one offs. So if you look at the underlying data behind the CPI numbers actually you see that egg prices went up by around 1516 and that's massive. But the question we have is what does the Fed do in reaction to this stuff? Does the Fed react to egg prices going higher? Well they would if they were like certain trends around it. But in this case this has been because of people being potentially concerned about infected eggs. For example, hiking rates doesn't necessarily bring infected eggs back so they wouldn't react to that. So the biggest component to this is probably shelter costs. And shelter costs represented around like 40% of the price rises. And that's something I think we can pick apart.
- [03:18]
Scott Melker
Yeah, this is the from Bloomberg Super Core US price gauge is stuck above pre Covid levels and there it's a shelter cost proof sticky. As you said, energy prices stoke gains. What I find interesting is that we have this scenario where the market's all over the place as a result. Right. Yields fly. So you've got the 10 year that's just absolutely pumping gold down, stocks down, bitcoin down. Not all those things seem consistent to me. Right. So it seems like the market's trying to figure it out and probably end the, end the day exactly the opposite of what's happening right now. But yields are flying.
- [03:54]
David Young
Yeah, because there's always this concern that if inflation expectations go higher then if that becomes a self fulfilling prophecy then of course you know, it can just spiral out of control. So the fear is that if the Fed doesn't get this under control right now, then this is going to become a problem. But like I said, I mean the bigger issue right now is what's happening on the shelter side of things. And I think that a lot of that tends to be lagged. I mean all of the CPI as an index is lagged, but shelter in particular because a lot of this had to do with the bottlenecks we've had over the last year even longer to be fair. But it's just been this over demand versus supply. Because mortgage rates have been so high, a lot of that pressure has actually started to be relieved. We won't see that in the CPI data probably until another six months from now. But it is show you that some of the concerns around labor data around the imbalance between like demand, supply, I think you're already seeing that homebuilders for example don't have quite the same kind of issues that they did previously. So I think that we will see that disinflationary trend kind of Kick back in. But probably in the data itself, we won't see it for probably another two.
- [05:08]
Scott Melker
Quarters because the Fed makes their decisions based on lagging data, largely. Right. But it does kind of put the Fed in a corner here. You would think. Right. They obviously started the cutting cycle. Many questioned that, including myself. If jobs were exceptionally strong, stocks were high, inflation was coming down. Right. I think, why start cutting? And now they're in a position where if inflation's actually rising, you'd think they'd have to raise rates again. Right. So they certainly can't cut right into this. You would think. So now there's this crazy situation where the Fed's just going to sit here and wait and doesn't really have a tool necessarily to control what's happening.
- [05:50]
David Young
No. Then that's the big problem right now. There's so many variables that are going in. So we've got the actual economic data itself, what's going on in the labor market. Then of course we have all the fiscal policy changes that they kind of have to reckon with. And some of those things are probably just one offs. But many of those things could be, you know, go into the future as well if like you think that tariffs can kind of strike at any time. Well, you know, the Fed doesn't know how to react to that because the second derivative of that is what's going to happen to inflation expectations, which is my first point. So I think that what we're seeing right now in terms of like bitcoin prices, gold, which you kind of mentioned, all this kind of stuff, I mean like this is all consistent with what happens if you're expecting that, you know, the, the Fed might deliver hikes, which I still don't think is their next move. I still think the most likely move is going to be cuts than hikes. But certainly those cuts probably won't be delivered until late Q2, maybe early Q3 now, if not even like more delayed trying to figure this stuff out because the initial move is going to be higher yields, stronger dollar Gold tends to get like less of a bid because typically when those bond yields rise. Well, if you're an investor, you can get those higher risk free returns from Treasuries. Right. So gold doesn't look quite as attractive as a safe haven asset. Ditto to Bitcoin, to be honest with you. Bitcoin doesn't pay cash flows, I. E Similar to gold. So I think that the initial re racking when people kind of see something like this inflation print is that they got to reprice the yield and then you're going to reprice all the risk assets and, and macro assets in return.
- [07:26]
Scott Melker
I mean, so you look at bitcoin prices, crypto prices. Right now, bitcoin down, well, it just bounced a little, but you know, roughly a percent in an hour, 2% in 24 hours. Obviously it's been a rough kind of seven days, but more for ETH than Bitcoin. Interesting, because it seems like this is a function of what's happening in the macro and with inflation and tariff news have been the things that have sort of rocked the market. When you kind of look fundamentally at everything happening for the actual industry and it seems to be nothing but tailwinds. Right. I mean, we have everything in place that we could possibly want that we never dreamed of six to 12 months ago. Right. I mean, we can just cook through a few of these things. Right? SEC acknowledges spot Solana ETF filings. I mean, a year and a half ago, the idea of these things getting approved was absolutely insane. You have Bitgo saying to weigh an ipo, right? The IPO market in the United States, period has been dead. Now I think we're going to see a ton of crypto IPOs coming through. SEC purse says agency wants new approach to crypto policy. I mean, we have a favorable FCC that's openly saying they're probably going to stop a lot of these enforcement actions and give us rules of the road. You have the chairs of every meaningful committee coming together and saying we'll get crypto, crypto legislation, even though now they're all arguing about what that will look like. We should be, I mean, in theory, in a vacuum, we should just be skyrocketing.
- [08:54]
David Young
If you had told me a year ago that we'd be at 95,000 on Bitcoin, I'd be like, this is excellent. This is going to be like. This means that we must be in a great environment. And instead you look around, everyone's disappointed because we were bouncing around 100 and didn't stay above that. It's like, let's take some perspective here. But I do think that part of that has to do with kind of the dichotomy we're seeing between institutional investors versus retail investors. Because I think a lot of institutionals tend to be now invested in those blue chip names like Bitcoin, for example, and they're doing fairly well, or at least they're happy where their position. But I think for wealth creation, a lot of retail investors wanted to get into the higher beta exposure, higher beta altcoins in particular, and altcoins just haven't been doing well. One of the hottest sectors of the last couple of months was AI agents, but that market cap dropped from 2025 billion down to like 7 to 8. So I feel like this is kind of where we are. There's just a difference in what people are actually holding here.
- [09:56]
Scott Melker
Our bubbles pop so much faster now. I think at least like in previous cycles, for better or for worse, you had to get a centralized exchange account to participate in all this thing, which sort of caused natur delays as people waited to KYC and sign up. Like, it's no mystery that in the last cycle the bulk of the retail participation was people signing up to exchanges waiting three months so they could buy Doge. Right? I mean, it was Doge, Doge, Doge. And now you can just go pump fun and that three month cycle becomes three hours.
- [10:27]
David Young
Yeah, I mean like oversupply is one of the biggest kind of issues I think affecting the altcoin sector. I mean, this is kind of why I think probably over the next couple months you're going to see some people starting to really distinguish between which are the ones with real fundamentals, which ones are just governance tokens, which ones are both, and, and maybe like D5 might catch a bid if we see fee switches. So there's still a potential here, especially coming from the regulatory side of things, as things really start to gain momentum. But for the time being, I mean, the memetic nature of trading a lot of these altcoins has kind of created a big problem for a lot of investors.
- [11:10]
Scott Melker
Yeah, I don't have it in front of me. I shared a tweet the other day, the last two days from Matt Hogan that basically said what you did, which is that we have this incredible institutional interest in bitcoin and crypto in general and retail is just depressed and wrecked. To me, that's the recipe for a massive bull market. Right. You have smart money or big money that's actually buying and interested retail will probably FOMO in at higher prices. I mean, we keep seeing headlines like this. Goldman Sachs doubles down on Bitcoin ETFs, boosting holdings to 1.5 billion in Q4. 2024. Listen, I mean, that's a drop in the bucket for Goldman Sachs, but it's meaningful that Goldman Sachs is adding to their Bitcoin ETF holdings. I believe it's IBIT and Fidelity. And this is based on their 13F which they filed on Tuesday. As we kind of discussed this before, you said we might see a lot more activity like this as the rest of these 13F filings come in by the end of the week. But institutions are buying this stuff, and not just any institutions.
- [12:08]
David Young
Yeah, we are reinforcing new sources of demand on the bitcoin side of things in a way that we're not necessarily doing for all the other tokens out there in the crypto space. With bitcoin. You have the 13F filings showing more institutions, RIAs, registered investment advisors, actually buying this stuff. You have headlines from corporate treasuries buying this stuff. You have actually, like, states. And, you know, this is something that I think a lot of people miss because we are talking about the strategic bitcoin reserve, our digital asset stockpile from the federal level. But you have like, at least 19 states for researching, like, whether they should actually have a strategic bitcoin reserve or allow their pension funds to buy this stuff. I mean, that is a massive demand sync. I mean, if you, like, took like 50 states, for example, and all of them put like, 1% of their, like, pension funds into it, that rivals what we just saw with the ETFs. So I think that this is something that a lot of people are missing as far as potential catalysts that are out there. Like, it's. It's a lot lower hanging fruit for the states to do this than the federal, like, for the government to do this, because states have a lot more autonomy. They're like legislative cycles a lot shorter. So we could actually see a lot getting done at the state level before we even see something happen at the national level.
- [13:26]
Scott Melker
How meaningful do you think one of these states finally jumping in and making the move to a strategic bitcoin reserve would be? Right. We have this idea that 22 states have proposed it, but as Alex Miller pointed out here, it's really 22 guys in 22 states have proposed it to some degree. Right. You have a politician who's willing to take the jump and put it on the books, but that doesn't mean it's going to happen. But some of these have advanced beyond committee, I guess, just generally, how big would the news of one of these actually passing and becoming law? And one of these states having a strategic bitcoin reserve, how big would that be?
- [13:59]
David Young
Yeah, I mean, like, you got to take it with a grain of salt, right? Because is Massachusetts necessarily comparable to Texas, for example? Probably not, because, you know, we. We know that it was just like, one lone Republican in Massachusetts who put out that bill. How.
- [14:15]
Scott Melker
How do we.
- [14:15]
David Young
Wait that. So I Do think that, you know, taken together like this is still going to be massive. So it doesn't need that. It doesn't need to be like all 19 to 22 states actually need to kind of hop in there. But if the majority do, I think that's what really kind of matters. Because already we're seeing that this is the game theory behind why internationally, lot of countries are looking at it as well, why people are thinking about it from the sovereign wealth fund perspective. So I think that it's really a question of like everyone trying to jump in ahead of, you know, the, the next person, for example. And I think states already are looking at the idea of maybe they need to start accumulating before we see like the, the national like strategic Bitcoin reserve or digital asset stockpile. So hard for me to get through that entire phrase so long. But like it's. I think that that's really the question now of what's going to happen.
- [15:11]
Scott Melker
And I want to just kind of talk generally about meme coins in that regard. Obviously, like, I've got to imagine this is a major challenge for you as the head of research at Coinbase, because you have to dig into this and explain it, right? I mean, good news is that purse is saying many meme coins likely fall outside SEC jurisdiction, which is kind of why meme coins have existed for all this time. Was the theory that you could just launch something called a collectible, say it has no utility, therefore it's not a security. But it does seem that they have captured the mind share of the crypto audience, which probably a major reason why the other altcoins haven't moved. But when you're talking to institutions and such, are they asking about meme coins and how do you explain this phenomenon to them?
- [15:56]
David Young
They're asking about meme coins not from the perspective of them themselves wanting to actually invest in it. They just want to get a handle on what it actually represents. And some of that is, you know, how does it translate into broader fundamentals? For example, like if you see activity, start spike on Solana, you know, like, how do you. How do we think about meme coins in relation to that? But really they, they do understand that this is the tension economy inside of crypto, right? Like this is still meaningful. It's not as if like meme coins are just kind of like silly nonsense and they're kind of just like, oh, we can just ignore it completely. They do know that there's real money behind it. People are investing in it. There are cycles surrounding meme coins, and it really does affect the underlying infrastructure behind like, you know, the growth of these L1s and other applications. So I think that that's kind of the perspective that institutions take with respect to mean coins.
- [16:56]
Scott Melker
Yeah, I mean, it's not like they're going to start buying them, so I guess it's a sideshow probably to some degree. But that does seem to imply that they're mostly bitcoin focused still. I mean, interestingly, even on this downside move of eth, which has been aggressive and I think we've all unpacked the fact that it's primarily liquidations and just market mechanics, there is buying of ETH ETFs by institutions and it's inflows, while Ethereum goes down by many multiples.
- [17:28]
David Young
I don't think a lot of people realize that. By the way, if you look at the numbers, I think it's something like $3.7 billion worth of net inflows. I mean, if we roll back to like the, the Spider Gold ETF back from 2004, for example, like the, the total amount was something like $3.8 billion. And you know, in, in $2025 at somewhere closer to 5 billion. But like, that is not a small number to sneeze at. You know, like it's, it's actually fairly decent. Now, some of that has been driven by institutions who have been playing the basis trade. And you can kind of see that you can go to CFTC Data, for example, and look at leverage short positions, and they're pretty massive right now, like as of like last. Yeah, last Tuesday, for example, they were somewhere on the order of like $1.8 billion. So, you know, like, I would say a good amount of this stuff has been, you know, like the fact that the basis has been more attractive in ETH versus Bitcoin, for example, by around 1 to 2 percentage points. But still there is demand coming from people beyond just those shorts into the E side of things. And it has a lot to do with some of the headlines you point out on the show, right? Like Eric Trump making comments about eth or we're a Liberty Financial project buying youth. So I do think that that's kind of what we're seeing at the moment.
- [18:48]
Scott Melker
Yeah, there's this narrative that there's a huge short squeeze coming because of those shorts being piled on. But that basis trade you're just discussing could actually explain why we're seeing inflows with heavy shorts. Right. Basically buying the spot underlying and shorting the future and Capturing the yield in between. So it doesn't necessarily mean that those shorts are going to get wrecked by price going up.
- [19:09]
David Young
Yeah, and I mean the basis is paying better. And I, I think that like, that, that the spread between like the basis between like CME on Bitcoin versus ETH has narrowed a little bit, but at times that was as wide as like 5 percentage points, for example, and quite attractive. Now what, what, what accounts for that difference? Liquidity, Other things. So it's not necessarily entirely a free lunch, but certainly if you're an institutional investor playing the basis trade and you know, you play the basis on a number of different assets, this looks pretty attractive to you. So I think that's why people gravitated towards ETH a little bit away from like Bitcoin in order to play that like cash and carry.
- [19:50]
Scott Melker
So I brought this up earlier. I'll just show it one more time. Crypto custody firm Bitcoin. Bitcoin said to weigh IPO as soon as this year. I think, you know, Kraken announcing that they're likely going to do the same. We just saw Exodus Wallet go public. I mean, how meaningful is it if we see finally a lot more crypto companies, you know, IPOing or direct listing as Coinbase did and being publicly tradable?
- [20:14]
David Young
I mean, I think that this is a good direction for our industry. I'm sure. I don't want to put words in your mouth, but I'm, we've talked before and I know you have your own like, feelings about this because I mean it isn't just like legitimizing things from the headline perspective. Right. It is legitimately. Like in order to ipo you need to put forward a statement to the sec. You need to kind of report quarterly. Like you need to be transparent about things. And I think that's actually a great way, like if we're an industry that cares about trustlessness, for example, like, well, we gotta build that trust with the people that we're trying to encourage to be involved in this space. And that involves being transparent upfront about like what's sitting on our balance sheets, for example. So I think this could be a very good direction for crypto.
- [21:01]
Scott Melker
Yeah, I agree. So has anything fundamentally changed for you as to your views on what the market will do this year? You know, obviously we kind of talk about what will happen next quarter, what will happen next, six months, four year cycles. Having. What's your base case at this point based on what you're seeing? Having a little bit of time with obviously the Trump administration coming in and seeing what they're actually doing.
- [21:27]
David Young
Yeah, I mean I've had every opportunity to kind of reevaluate my, my view. And for anyone who doesn't know, my view was coming into the year was I was going to be constructive on Q1. And I have basically reaffirmed that. Actually I put out a report just this morning saying that I still believe that that constructive outlook still stands. And so I think that at least through Q1 we should still be like pretty optimistic, maybe cautiously optimistic. But the challenge is that a lot of that's going to be anchored on bitcoin over altcoins. And I think bitcoin, as I've already kind of said, still has a number of sources of demand that are going to be there. They're still gaining momentum. So I'm pretty optimistic on that side of things. But for the next couple of weeks I do think that it might be a little bit rough for altcoins who have because we are in this kind of nebulous period where we're not sure what the next big regulatory catalyst might be. For example, that it's going to trade alongside risk assets for the time being. And you know, we've already tackled the supply concerns that kind of sit on many of the altcoin side as well. But I think that that will get resolved as we get through like 2025. I'm not ultimately bearish on the macro setup. I think that we actually have a lot of secular trends that work in our favor. People have already forgotten about what happened with Deep Seagar one for example. But Deep Sea GAR one was a major game changer as far as actually the multi year productivity cycle that we have in this country. Because in the US we've had this kind of 15 year down period I think starting from around 2005, 2006, right around the time the subprime mortgage crisis for example, where there's a lot of deleveraging which lasted up through 2020 and really now I represents an opportunity to kind of recapture some of that. So I do think that as we become a more productive country, as we actually gain on that side, that's a lot more meaningful to me than some of the one offs on what's happening with tariffs, on whether importers are going to pass or costs on to consumers, that kind of thing. I mean it's relevant, but I think the secular trend matters a lot more to me and that's positive for risk assets on a multi year cycle.
- [23:38]
Scott Melker
So what does it take knowing how much supply there is, how much mind share meme coins are taking, how divided we are between all coins and Bitcoin. What does it take to see a real significant move across the board at all points?
- [23:51]
David Young
I think we're going to need some kind of exogenous shock or some kind of headline that really kind of pops things. And you know, like, some of that could be utility based. If, for example, like over the next two or three quarters we see that some AI agent actually has developed something of real utility, real value with a financial layer built on top, and, you know, crypto is the way forward for it, then that can be massive, for example, or something in Deepin or something in one of these, like these sectors. But still, I think it takes time to actually build out. And you know, we've seen this before in other hype cycles that sometimes the expectations kind of get ahead of the actual development and technology, but the technology is still working, people are still building out there. So I think that, you know, like, it's. It's not unsurprising to me to see it kind of deflated a little bit, but it'll come back when people start building real things.
- [24:47]
Scott Melker
It's funny though, I feel like we had the same conversation three or four, two or three years ago, I'll call it two or three years ago, where we said like, the things of that cycle were too early, but we'd see them in the next cycle. And right now, and I've kind of made this point, we have this Goldilocks zone with regulation and legislation and Trump coming in and everything in our favor. We can do whatever we want now. We have to actually do something. Yeah. And it still doesn't feel like we're doing anything besides stable coins and Bitcoin and meme coins.
- [25:19]
David Young
Well, you remember though, you joke, but there was a once upon a time when stable coins and tokenization were the big themes and we were all excited about that and that bubble kind of got deflated a little bit and they're back and they actually absolutely are finding product market fit in this cycle. So this is kind of what we did predict, Scott. I mean, we did.
- [25:39]
Scott Melker
There's. There's real games now, you know, like, I mean, there's things that are really happening. I'm just kind of playing devil's advocate. I obviously wouldn't be here if I didn't deeply believe in the technology. And listen, I mean, as beaten down even as Ethereum is, when you have Larry Fink talking about it and others, you know, there's Real things being built, it may be early. It just seems like we need a narrative. Like one of those things has to.
- [26:01]
David Young
Catch fire at this point. Yeah, I mean it's just I, I do think that like stable coins for example, are going to be massive in the cycle and you know, payments and its usage and remittances. The only thing is within like our communities, it's probably not as exciting because a lot of it feels somewhat institutional and you know, you see the headlines of like Stripe Accumul acquiring bridge for a billion dollars and like these, these you know, are like Chris Waller from the, from the Fed actually saying that like defi is complimentary to traditional finance and we all nod, we're like, oh that that's great. But like we want to talk about AI agents and we want to talk about hey, what's the next big like AAA game? Because I mean it is exciting and like we were looking for that 0-100x kind of payout. So you know, maybe like investing in the stablecoin sector or tokenization sector. It's more of a grind at this point because it's getting people involved, figuring out like the nuances of jurisdictional issues. For example, moving away from building private networks with CORDA or Quorum and kind of putting it on public blockchains. But that stuff is happening and like it is actually exciting. But this kind of speaks to that dichotomy between what's happening with institutional investors and what they're seeing versus what retail traders are seeing.
- [27:20]
Scott Melker
Yeah, I mean, I guess you can't kind of have it both ways. You can't have every single altcoin pulling you know, 50 to 100x every five minutes while also having institutional adoption which sort of dampens volatility but gives you a much more long term strong thesis.
- [27:36]
David Young
Yeah, I mean we want to move fast. You know, like I think within crypto they're still kind of inherited that ethos from technology development side of things of like move fast and break things. But the reality is, especially when we're dealing with things involved in the financial sector, they move slow. These are big organizations that are conservative. The, their biggest concern is protecting their clients wealth. And in order to do that they can't just rush into things. They got to make sure that incrementally they won't be subject to smart contract risk or you know, like the potential for exploits, things like that. So this is how fast they're going to move. So I don't think that's a bad thing. It's just you know, we got to accept that that's there's going to be this two tiered kind of speed between these two different entities.
- [28:23]
Scott Melker
Yeah, well, thank you for letting me keep you over by a couple minutes. Boy band practice starts tonight if you are ready. We might have to do it via Zoom since we're not in the same place, but I'm ready to do it if you are.
- [28:35]
David Young
Oh yeah, No, I mean, my lower back will be thrown out immediately, but yeah, I'm all in. Let's do it.
- [28:41]
Scott Melker
Maybe we'll get Chris who's coming on next to join us as well. Guys, give David a follow, obviously. Great insight as always and look forward to having another chat in the very near future.
- [28:53]
David Young
Thanks, Scott.
- [28:54]
Scott Melker
Thanks, man. All right guys, before we move on to Chris, who is sick and luckily showed up to, to, to. To to talk to you guys anyways, even in his sickness, it's Wednesday, which means we talk about Aptos and they had a absolutely massive breakthrough. It's so funny, man. I am just not a tech guy. I do not know what any of these words mean when I re read into these things, but they had a huge breakthrough. The name I love is Chardines. Do you guys know about Chardines? Chardies? I knew the Anthony Hamilton song called Charlene and I know what sardines are, but they got sharding with sardines. Shardines. But as I read about it and all the tech that it means, the point they caught my attention and should catch yours is that they can now do a million tps. A million transactions per second. Tested now on aptos. So when we have a conversation like I just did with David about adoption and what's going to be the next thing, well, I can tell you that blockchains now, especially Aptos here, are ready to take on whatever is coming. A million transactions per second is many multiples what Visa networks and centralized networks do. And it was always that decentralized networks were much slower. So people said, why do you need them? Well now they're faster, decentralized, absolutely incredible leap year. So as they say, as the demands of web3 grow, so must the foundational technology. Today we're proud to unveil Shardian's aptos sharded execution engine designed for infinite horizontal scalability. So now as we build things, people actually want to use the infrastructure, the plumbing, the tech is ready. So check out Aptos, our amazing sponsor. Now I'm gonna bring on. Sorry, man, I know you've been away. This is your first day Back, but me and David are starting a boy band and we needed a third man.
- [30:56]
Chris
I'll tell you what, I wasn't into boy bands when I was a kid.
- [30:59]
Scott Melker
And it was starting, y'all.
- [31:02]
Chris
I'll, I'll root you on. I'll, you know, I'll cheer you on.
- [31:05]
Scott Melker
But you'll be our more cowbell guy. All right, let's look at the charts. I know you're not feeling great. Obviously we have CPI coming in hot today. Markets at least having a little volatility, although to be honest, not that volatile. I mean, what did today, today it opened at 95-859. We're at 95 180. I guess my type, my title, Bitcoin plunges on. Shocking CPI report is the crash just.
- [31:29]
Chris
Plunged on the, you know, gotta get.
- [31:30]
David Young
You guys to show up.
- [31:32]
Chris
It's the one minute chart, right? I mean, isn't that what everybody does online? They show these, these charts and they go, oh my God, it's such a red day. And you look and you really look and go, well hell, it's only the one minute candle. I mean, you know, what the hell. But you know, I think the thing that, that your viewers need to understand is that, you know, the reaction to, to news events is usually just knee jerk. News events do not determine the trend. The trend is already established. And, and we can see knee jerk reactions. If we think about Friday with the jobs report, you know, there was the initial pop, everything kind of went up and then it went down. Right. You know, it's always the knee jerk reaction. But people, you know, again, we talked about this when we were going sideways for seven or eight months last, I think it was last year or the year before, I don't remember anymore when we went sideways for about seven or eight months there, you know, and, and I told you that, you know, at the time that people just get nervous, you know, the longer it holds sideways. Because let's face it, most of retail are either brand new or they're used to losing money, right? And it's, and it's the way it is. And so if price doesn't go up and give you a cushion above your buy in, immediately you're nervous. And even if it does, you're not really sure what you're doing. So when do I get out again? Then you got social media squawking in your ear about how the top is in, the cycle, top is in. And you're like, well, I don't want to believe that, but I don't know what I'm doing. And you know, so the longer it goes sideways, the more retail has time to convince itself that it's screwed up and it's, you know, and it's going down and things are all hell in a hand bask and whatever. But the reality is here we are and you know, here we are back up to 95, 6, almost 6:30 now. So almost up to you know, what it was prior to it. You know, here on the four hour, this is the, the four hour chart here. And we've got this bullish divergence off these recent two lows right here we've got what appears to be a descending wedge, we've got the hourly pivot here. So my, you know, my thought is again, try and keep it simple guys. Look for a one hour or a four hour candle that breaks out impulsively and closes and closes above the, the hourly pivot here right around whatever charts you're on. It's probably right around the 9, 96, 800 area, maybe 750 right around that area. If you can get that that's a good signal that that low is, is, you know, quite likely. In a bigger key would be a daily candle impulsive breakout and close the daily candle close above this daily pivot which is right there on a hundred thousand, three fifty. If we do those things, it's a really good sign that that low is likely in breaking out above this swing high here. So whatever chart you're using February 3rd, based on my Central Standard Time, that it's around 102, 102,512 here on my chart, breakout above that should indicate that three waves have been completed and that's corrective which again signals then we should be looking a new all time high. Now I'm going to say that you're probably already getting comments about how stupid I am and you know, how the top is in and I'm so blind I can't see it. But you know, this is the kind of stuff that we expect, right? People get very emotional and emotions are difficult, you know, in trading. And you know, again, the toughest thing about it and people don't want to admit it is they're new and they don't know what they're doing. They come in. The one thing I like to tell people is listen, when you're coming into the market, basically everything you think about markets and what should happen and what's going to happen is 180 degrees from reality. So you know, and this is, you know, based on my own experience 30 years ago when I first got in. And I've seen it repeated over and over again, you know, tens of thousands of traders over 30 years, you know, and we tend to come in with the same ideas and the same reasons and the same thinking, you know, of why we're getting into the markets and everything. And, and it doesn't matter if it's stocks or if it's crypto or if it's forex or if it's futures. It's always along the same kind of line of thinking. In that line of thinking is why we end up losing so much. But I mean, right now, you know, it's pulled back and so if we can just keep it simple and look for those breakouts I was talking about, we'll be all right. If we're coming down further. I'm look, I'm interested in this 93, 140 kind of area. If we lose that, there's a good chance we sweep this, this Sunday low and kind of hit this hourly S1 pivot around 91.1, you know, and that gets us pretty close to, you know, to the, that Monday, January 13th low. So, you know, if we get that low, there's a good chance we could go under here. But the volume drop off has been pretty significant coming down. We've got a lot of volume picking up right in this area showing us that demand is showing up again the same kind of where we have this previous. You know, look left, all this resistance becomes support. So I like the area right now we got the four hour bullish divergence we've got. We can't really see it here, but this volume candle on this current candle is a nice spike of volume there and leaving a large lower wick telling us that demand is really showing up. And so we just want to see some follow through on that.
- [37:10]
Scott Melker
What else are you looking at while, while looking at that?
- [37:13]
Chris
Yeah, yeah, real quick here. Just a couple of charts on alts, honey. Got my interest here. This is the daily chart. You can see we're pulled back to the S1 pivot. We're oversold on the RSI, stochastic RSI. So I'm really interested in seeing if we can get a reaction off this area, which usually we should. And if we can, if we can get an impulsive breakout and close above this, you can just draw a descending resistance here. It's got one, two, three touches. So this is an actual trend line because it's got three, three or more touches to it. So impulsive breakout and close above that is a good clue that this low is probably in. Again, breaking out above the daily pivot there at 0.0735 should indicate that we're going to break out above $0.15 here and continue higher. Aleph, I think we talked about last week. You were telling me as a first letter in the Hebrew Alphabet. I do pay attention. Yeah. Every day there's a possibility this is an ABC, but it's also potentially a 1212 here. So we're looking for a reaction right around where we're at. Breakout above 11.0.8.1108 should indicate that the low is in wave 3 minimum expected target at 0.1692. So that's kind of what I'm looking at there. But you know, secondary, you could wait for a breakout above the swing higher just to make sure. But if you get that, you should be looking at least at 0.1692, maybe even 0.1954. Is that secondary? Wave three target. Let me see here. And then spa is another one I've been kind of watching potentially. Let me zoom this out here. And this will be the last one I've got here. But potentially We've got a. A 1 and a 2 here. It's. It's about a 618 pullback finding support right around that daily pivot. So what we want to see is a breakout above this R1 pivot area here, right around 0.0312223 area. If we can get a breakout above that, that should indicate that low is in and that'll give us minimum expected wave three target up there, just over 15 cents. So, you know, as with always, it's about, you know, looking for those confirmations, not trying to catch falling knives, not going all in. It's proper risk management. It's all the things that we don't want to do when we first come into markets. But if you do them, if you do them, you've got a lot stronger chance of actually making it where you actually are in long enough to learn enough to continue to make money.
- [39:49]
Scott Melker
So, yeah, yeah, I mean, just waiting indefinitely for the alt season, you know, that's what everybody is thinking, like, when is it going to happen? I really still think it will.
- [40:01]
Chris
But I'll tell you what, let me real quick here before we go. Listen, guys, if you're out there waiting for all season and you're ignoring what is going on already and the money that's been made and the opportunity, I mean, look at this rally here. This is over a few days. I mean, geez, always, you know, 15 to 40 cents on this one, right? We have so many of them that are pumping really good. You just need to learn how to trade them. Don't. Don't just sit there and blindly wait for alt season. You could have made so much money already. All right, all season may or may not come, but that doesn't matter. A ton of money to be made in alts has already been made. A lot more still to come.
- [40:38]
Scott Melker
Totally agree guys. Give Chris a follow TX West Capital. Everything he's doing. I know I said last week you'd have an announcement, but next week maybe we'll have announcement. We're working on some stuff. That's all I'm gonna say. We're just. I'm slow. That's all I got for you. Well, thank you guys. I gotta run. Chris, thank you so much. We will talk to you soon. Bye everyone. Let's do. Let's go.