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The Wolf Of All Streets
Crypto Dump: The Perfect Time To Buy Bitcoin & Altcoins?
00:40:22
Crypto Dump: The Perfect Time To Buy Bitcoin & Altcoins?
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- [00:02]
Scott Melker
Bitcoin continues its sell off trading now below $92,000. Many pointing to news that the Department of Justice of the United States of America is about to sell off 6 point something or other billion dollars worth of seized Silk Road bitcoin. It's all over. The bear market is here. Influencer saying that we have a 75 to 81.39% chance that the top is in. Pack it in. I don't think so, guys. And I have a feeling that my guest today, I can. Torvich also agrees that maybe it's not quite over yet for this crypto cycle. We're going to talk about all of that and more. And of course we've got Dan from Chart guys on the back half. You guys do not want to miss this one. Let's go, let's go. What is up everybody? I'm Scott Melker, also known as the Wolf of all streets. Before we get started, please subscribe and hit that like button right down below so that you will always know when I'm live. You don't ever have to sleep, you don't ever have to eat. You can just watch my channel all the time. All the time. I tried to tell my wife once to watch my channel and I found out she never watches anything that I do. It was a joke. I was like, hey, did you see my podcast with such. No, no, nothing to do. My kid watched once though and hated it and never watched again. But I have a feeling that I had. You ever watched you never watch it?
- [01:40]
Dan from Chart Guys
I do, I do, but I have the same, I have the same situation with my, I mean my parents still think I work in the bitcoin. So, you know, yeah, the bitcoin, it's been almost 10 years, but it's fine, it's fine. We'll figure it out one day.
- [01:53]
Scott Melker
Do they ask ever tell you to go ask the CEO of the bitcoin to for a raise or like, you know.
- [01:58]
Dan from Chart Guys
Yeah, I've gotten some weird, some weird family questions but you know, as long as we're huddling, it's good. I actually, I have 100k bitcoin hat that I was going to wear. But you know, this, this week, this week, this week's flush has, has not been as positive.
- [02:12]
Scott Melker
So next time you literally could have worn it on Monday, but then people would have clipped us and been like, look at these idiots. I wore a bitcoin hat today. I got this for Christmas for my wife.
- [02:21]
Dan from Chart Guys
It looks great.
- [02:22]
Scott Melker
Thank you. Thank you. It's hard to find a hat. I have A very strange head. So here we are. But speaking of strange things, we had, like I said, kind of this optimism on Monday that everything was good. First day back, $102,000 Bitcoin celebration. Here we are. Sub 92,000, another $10,000 drop. Crazy in a week. Big wipeout obviously of leverage and a whole lot of fud. I mean, maybe I'll just bring this up right now so we can get it out of the way. DOJ cleared to sell 6.5 billion in Bitcoin seas from Silk Road. So basically there was a multi year ownership dispute over these specific bitcoins from a company called Battleborn. And they were basically claiming that it was part of their bankruptcy estate. They should come back. Of course they now lost, which gives the DOJ clearance to sell these bitcoin. Which of course means that people have to panic and freak out and think that it's all over. But not a piece of this is not huge news to me. I don't know, maybe I'm immune, but does this seem like. It seems like noise?
- [03:24]
Dan from Chart Guys
Yeah, I would agree. I think like without question, this has been priced in. To your point, you know, we've been talking about these Silk Road assets for years. You know, it's something that the DOJ has to sell. It has to sell any asset, whether it's bitcoin or cash or you know, real estate, whatever it might be. It has to get that off the book. So, you know, obviously the timing is an ideal. They're going to probably try to push this before the inauguration, which is not surprising. But I think, you know, what was a bigger piece to your point in terms of how fast the markets moved, there was so much leverage coming in on Monday. It was, you know, we, the bounce up. Although we felt really great going into it, I think everyone was like, whoa, that happened too fast. And so, you know, the minute you had macro come in and you had a macro print this week and the macro started to, you know, the good news basically equal bad news. You had strong economic data. People didn't feel as strongly about, you know, a Fed rate cut anymore. You had job openings rise to a six month high. And so all of that didn't look so good. And you know, it caused a lot of that volatility down. So I think that was kind of the larger picture here. To your point, the DOJ piece, it doesn't look good, it doesn't feel good, but it's been priced in. We've been talking about it for years.
- [04:41]
Scott Melker
Yeah, I think you nailed the Real story here, which is that we're just kind of risk off. Right. And the more the ETFs come in, I do believe that Bitcoin itself is largely an uncorrelated asset. But we know that in moments like these, when everything sells off, Bitcoin is just a higher beta asset that sells off even harder, especially after hours and on weekends. I mean, the market's not even open today and look what's happening. We can't blame the stock market today because thanks to Jimmy Carter, we have to blame ourselves. But I do think that this is just a lot of uncertainty ahead of an inauguration and regime change and kind of strange economic data. I'll say we're still in that place where good news is bad news and bad news is good news and nothing seems to make much sense to me. But that said, they may have sold some of this. We don't really know. And we watched the market absorb what, 12, $13 billion worth of GBTC Bitcoin when the ETFs were launched.
- [05:40]
Dan from Chart Guys
Exactly, exactly. Look, we've been here, we've done that. And I think the bigger stories, what you mentioned, right, the ETF inflows are very optimistic. People just aren't talking about that as much. But we saw 1.9 billion already come in, even more this year. So we saw on January 3, January 6, that was for Bitcoin, we saw 2 billion in ETF flows come in in December. I mean, these are big numbers. And if you think about the investment committee of the organizations that are going out and buying these pension funds, think about some of the states in the US that are now using Bitcoin as a reserve asset. It takes months, sometimes years to sit down and say, all right, we're going to make this decision. Here's how much we're going to allocate and then go out and buy it. So the underlying is that momentum flow is still very much happening. But yeah, I would say from the trading perspective, everyone's pretty much long volume at this point through end of Jane. We have a lot of things outside of the inauguration. You also have a bunch of token unlocks happening. You have an ENA unlock in March, you have an Ondo unlock in Jan. The Ondo one is going to be the biggest unlock. And so it's going to be interesting to see some of that altcoin volatility. But historically, I would say just everyone long volume into the inauguration.
- [06:55]
Scott Melker
Yeah, I want to dig deeper into the weeds there. Beyond Bitcoin, obviously. I mean, you're kind of a defi expert, obviously launching defi platforms very deep in the weeds, which we can can talk about, actually. I know upshift is coming soon and talk about what you're doing in August, but we always have unlocks. These are huge unlocks. But the whole fall all I heard was unlocks too. Right. And it's kind of the old bullish unlock meme. We're going to have never ending supply of altcoins into this market at this point. There's never going to be a time, in my opinion, when we don't have that. Especially when half the projects that we're going to launch are still waiting for ideal market conditions.
- [07:35]
Dan from Chart Guys
Yeah, 100%. And I mean now, you know, now the trend is, you know, before was all the meme coin stuff happening on chain. Now it's the AI agents and this, you know, I would say even the AI agents are kind of replacing the meme coins because when you have like AI XBT tweeting automatically in an autonomous manner, that kind of replaces the meme coin. And that token has done tremendously well. And so you, you know, when the market went sideways in December, we were seeing a lot of the AI tokens perform really well. Virtual obviously is another one that's done tremendously well. And so we'll continue to see that volatility. But what's nice about all of this going back to defi is that, you know, there is a direct correlation with stablecoins. And you know, everyone talks about stablecoins. It's a huge theme, very institutionalized. But as more of these things come on chain, as more of these dollars come on chain, they're looking for yield and as rates come down, it's going to be harder and harder, more competitive to earn 10% on a stablecoin and that's going to decrease. And so if, you know, our expectation is that the stablecoin market is going to increase market cap by 3.4x and that all that money is going to be looking for yield and that yield is in defi. And so we can expect that DeFi TVL is going to rise as well. And so it's pretty, you know, it's very optimistic for future of defi. I will say, you know, people in crypto are just impatient. And I totally get it. When you have market swings like we did in the last 24, 48 hours.
- [09:02]
Scott Melker
I just have to laugh because we say, you know, as yields come down and the Fed has cut rates, but yields have gone up. Right? I mean, you know, like, which is Pretty cool.
- [09:11]
Dan from Chart Guys
Yeah.
- [09:11]
Scott Melker
I mean, when you're looking at the 10 year here, I don't know what it's at, but obviously has gone up like over 100 bips since the Fed started cutting rates. I think that, that once again, the story is that people are just confused.
- [09:24]
Dan from Chart Guys
Yeah, yeah, yeah. And they're going to be looking for direction come end of Jan. And I think, I think without question, we're just going to see a lot of volatility until we get some clear idea about what is the administration going to be pushing forward. Obviously, we've heard a lot of really positive headlines around, you know, crypto regulation and crypto, you know, next steps, crypto hires in the administration, but what does that actually look like in practice? And so once we get that clarity, it's going to be a lot easier to be a momentum long trader for some of these specific assets.
- [10:00]
Scott Melker
Yeah. I think the thing is that we all know that every appointment is more bullish than the next ever. All the rhetoric is more bullish. But once you have all those things happen, that part of it is priced in. I'm not saying it's not fundamentally bullish or that there's, we have nothing but tailwinds. I think that the market goes exceptionally up. But as a trader, you know, I think now you have to actually see it in action because, you know, we know Paul Atkins, we know all these guys. Right. And you still have, I don't know if you saw this story, it's hilarious. But Gensler is still crying like literally on the way out the door, still saying, crypto is right, give me it. Get out of here. Right. But we know that we know what's coming to some degree. But now it has to become a priority in that first hundred days to keep the momentum, in my opinion, 100%, 100%.
- [10:49]
Dan from Chart Guys
And I think look like, you know, it was only a few weeks back in December when Donald Trump and folks in the administration were saying, I want 150k Bitcoin, and I want it, you know, in the first few months of my administration, we know this administration moves quickly and so that's optimistic. And we know that the people that he's brought into the administration also tend to operate very quickly. If you think about the Elon Musk of the world, the David Sacks of the world. And so I 100% agree with you. I think all eyes are going to be focused on, you know, what's going to happen. And in the interim, you just get that volatility because, you know, it's not Necessarily clear. Even if you think about some of these agents, it's not yet clear with that specific theme as an example, how that, you know, how that gets monetized, you know, who, who makes money in that, you know, flow of funds and things of that nature where, you know, for folks following trends, it's hard to keep track of until we get clear direction.
- [11:50]
Scott Melker
Yeah, I also think that we've had basically a June, a January sell off, like after every single having at least in the middle of, in this exact kind of phase right after. And we're still, I hate to say this because it's probably a harbinger of bad things to come. We're still only like a 15 or 16% drop from the all time high here. Our classic retraces are like we should go back to 75, right? Like go back to that previous all time high, hit 75, all coins go down 80%. That's when people really capitulate and give up and way up. I mean this is still, I hate to say it because it might mean more pain to come, but like $92,000 bitcoin and we're crying is just absurd in my mind.
- [12:27]
Dan from Chart Guys
It's a good place to be. You mentioned it. With gbtc, there's so much more liquidity right now in the space that we can absorb all of the cells without. I mean it was still a move for, I mean it happened, you know, within an hour, but it was, it was still a very large liquidation that got flushed out. But it, to your point, it's not like we went, you know, down to 60k or 75k. And so there's still so much momentum from all of the ETF purchases coming in. It just, you know, feels like, I will say it feels like everyone's a little bit tired. We came back from really strong Q4. You know, we've, we've been dealing with the volatility in the space for so long and you know, folks kind of want the up only narrative and that's just not, that's just not the reality of the market. And so I think folks are tired, we're coming back from vacation, everyone's a little bit groggy. But that doesn't mean that, you know, come end of Jan, things aren't going to be a lot more optimistic, which we expect.
- [13:29]
Scott Melker
So I totally agree with your take on stablecoins and the hunt for yield. And I'm assuming that what you're building is geared towards institutions, ability to earn that yield. So can you talk about, I guess What DEFI is going to look like now as institutions start to actually go deeper in the weeds. I think we've seen the first iteration of institutions coming in which is ETFs and buying Bitcoin. Right. Adding to the balance sheet nation states. This year we've seen all the headlines, what's going to happen? But what's going to happen in DEFI this year? Because I agree, I think the ETFs been a little underwhelming because it doesn't have the staking or any yield in it. Maybe that will come. But how are people going to safely, you know, from an institutional perspective, with a fiduciary duty to shareholders, how are they going to do DEFI safely, so to speak?
- [14:17]
Dan from Chart Guys
Yeah, yeah. So we've, we've seen a couple very interesting takes on August. August is a universal wallet that we've built, very similar to a noses safe and it supports prime services. So as you mentioned, you know, anything OTC options, drives, lending, borrowing, trading, execution and the clients that we have there, what we've seen change is the amount of small businesses we now support. So small businesses that are realizing, hey, instead of using stripe and paying 3%, I can use stable coins. And the cost for me to transfer these assets, it's close to zero. And so, you know, we've seen a lot of that happen. And then you know, of course as you mentioned, you're looking for yield on those stable coins. So we start to get people interested in things like the basis trade, obviously Enos and well, with Athena and other structured products. Now what we've seen happen is, you know, for those clients who want access to Defi, maybe we structure things in an SPV and then we have someone who's actually executing those trades. We can structure things in a, you know, swap or a derivative for offshore institutions so they get access to the underlying yield, but not necessarily touching DEFI directly, but someone is trading on, you know, structuring that on their behalf, some market maker. So that there's a lot of optimism there. Now on the upshift side, that's a retail product. It's basically a yield layer for defy. And what we've seen happen, there is a lot of protocol engagement. So protocols are realizing, hey, I've lost, I'll launch this token. But now I want to launch looping strategies, I want to launch market neutral strategies, I want to launch, you know, ecosystem strategies. And so what we've done is we've helped them build vaults that have really consistent organic yield because our institutions on the other side are the ones that are accessing it. So like you'll see 20% yield with very little volatility because the strategies are pretty organic in terms of just the on chain trading fees in terms of the, you know, rates on chain and it's better than what we're seeing in cefi. And so it's been pretty attractive on both sides and we're definitely expecting that to grow.
- [16:20]
Scott Melker
So when we talk about institutions right now we're still talking about crypto native hedge funds.
- [16:25]
Dan from Chart Guys
So it depends. It depends. I will say no, there are large banks, global banks that are getting very involved in the basis trade. And that, you know, is whether you look at the basis trade on chain, whether you're looking at the basis trade with the CME and ibit. That's an area where there's a lot of growth happening. And even if you're looking at just options, there's a lot of crypto options happening right now on majors. So I will say, you know, the global banks are very much moving. They're very active, they're trading desks are very active. Which is why to your point, sometimes you'll see that macro correlation because you have these macro oriented institutions who are still trading these assets and because they.
- [17:09]
Scott Melker
Shut their computers off at 4:30 and turn them back on in the morning.
- [17:13]
Dan from Chart Guys
Right.
- [17:15]
Scott Melker
You definitely see a lot of movement these days when markets open and close and depending on obviously when Asian markets open. And I'm sure something happens at 9, well not today because there is no market, but 9:30 on most days.
- [17:28]
Dan from Chart Guys
Right.
- [17:29]
Scott Melker
He's Jimmy Carter. You know, listen, maybe this is controversial but like I feel like canceling capitalism for a day to celebrate a president is like the antithesis of what you should be doing. We should keep markets open for 24 hours on the day to celebrate a president.
- [17:43]
Dan from Chart Guys
Steph or look, I've been thinking about this as well. We're always here for controversial takes. I don't know if it was in his will, but I cannot imagine that, you know, given who Jimmy Carter was and his commitment to the country, that this was his dying wish. But of course, rest in peace. He was an incredible president, as you know, wanting the markets open constantly, you know, very grateful that crypto is open and it just means that it's more bullish again for crypto markets. I mean businesses had a two weeks notice that Thursday suddenly all banks were going to be closed. So if you think about like running your operations. Yeah, it's just, it's you know, very archaic and I'm glad we're moving away from it.
- [18:30]
Scott Melker
I want to talk just maybe for people who don't understand a little bit more about the basis trade which keeps coming up. It's been exceptionally popular through multiple cycles. I would say that that trade on GBTC maybe wasn't so good for the market in the end, but that was different because people were locked. But how are these institutions right now taking advantage of the basis trade? I haven't even checked futures. I don't know if they're a month out, two months out, six months out. But clearly there's some contango to be taken advantage of here if they're taking that bet. Right?
- [18:58]
Dan from Chart Guys
Yeah, I would say, you know, for majors the basis trade was fantastic.
- [19:04]
Jimmy Carter
Right.
- [19:04]
Dan from Chart Guys
So you're, you're buying spot, you're selling future and so you are taking that spread in terms of what that looks like right now. Obviously with the market flushing this week, not so hot for the majors. But this is going to your point about always having these token unlocks that gives you the opportunity to trade basis because funding rates are going to be really attractive going into unlock. So you know, one of that that people are eyeing is ena. You have an INA March unlock and so you know someone could technically buy, let's say INA for a march expiry and then sell or buy the put sell the call and then basically take advantage of the funding rate. So that's an option out there. I would say for some of these alts especially you know, let's say ondo but for the majors a lot more activity on the basis is likely going to happen closer to inauguration options and.
- [20:01]
Scott Melker
Leverage options less and on relatively illiquid altcoins just terrifies me.
- [20:08]
Dan from Chart Guys
You are very much taking a position in the market without question. Without question.
- [20:12]
Scott Melker
Yeah. When I see people posting charge like 50x on shitcoin, whatever new meme coin launched on on such and such exchange. How do you take that bet? This thing moves 2% every three minutes.
- [20:29]
Dan from Chart Guys
100%. I mean you need to look if you feel confident. Luckily something like ENA has significant liquidity so it's deeper order book. But I agree if you're taking that kind of bet on a top 500 token, you are really living life on the edge with volatility. So I can imagine that that must be very stressful. But I think the space lives on on leverage. There's been a lot of leverage looping on stable assets in order to collect fees. That's been really attractive for things like you know, RS eth, some of these restaking tokens. So we've seen a lot of that. But yeah, in terms of basis, I mean right now it's, it's down to call it 9, 10% which is kind of the steady state. But we did see it pop up to, you know, call it over 40, 50% in Q4. So it is also volatile to your point. But at least with basis you're just collecting funding rate, you have to keep an eye on it so that you're hedged.
- [21:29]
Scott Melker
I haven't messed with, you know, much, Athena. Obviously I've, I know guy and I've interviewed Arthur about it and everything. But they had like curiously high yields that were when they, when they launched or talked about them, that had people scared. I haven't looked in a while. I mean I know they have their, they won't call it a stablecoin, but USD, right. It's their synthetic dollar. Is that, is that the term to trigger people less. But it was still, last I checked, maybe it was November was 13 or 14% yield or something. Right. I mean that's pretty attractive if it's relatively safe.
- [22:03]
Dan from Chart Guys
Yeah, yeah. I mean now, now it's, it's around the 9, 10%. But you're, you're spot on. Right. You're taking BTC and ETH basis exposure, you're taking exposure to these crypto exchanges. And for a lot of people that feels that's great. And having it, what they've done a tremendous job of is you can take this one asset and rehypothecate it as collateral. You can use it, you know, as cross collateral for different asset trading. It's integrated into so many different protocols. So the interoperability of it cross chain, cross centralized exchanges with OTC desks is really tremendous. And they've created so much capital efficiency with that. So you have, you know, this 10 to 13 yielding asset that you can use as collateral, which is tremendous. Again, capital efficiency in defy is really, really bad. So the more that you can do with less is really important. And so that's been, you know, really attractive. Lending rates have also come down too. So I would say you tend to see those kind of coincide, you know, at some, at one point, you know, in December, lending rates for dollars were around 20, 25%. That's come down now to, you know, under 10% against certain collateral. So you've seen the market, correct? Across the board. But that's not to say, I mean we've seen what you know, and I don't think that was the top but we've seen what higher looks like and it's not far from where we are right now and so we can get there easily.
- [23:26]
Scott Melker
Well, I really like bottom signals. I'm just happy to be reading the comments as you're, as you're talking. And this one just, I just had to laugh on the inside for sake. Why Eth dumping his hadith feels like that makes me want to buy Ethereum.
- [23:41]
Dan from Chart Guys
I was going to say it's a good buying opportunity. You know, we always talk about like when it jumps to 102, we're like, you know, oh man, I wish I would have bought more. And now's the opportunity, you know, now with this kind of volatility, with these kind of swings, with leverage getting wiped out, with people making those kinds of comments, you know, that's, that's the opportunity for you to. And look, I, like I said, 2 billion ETH ETF inflows in December. There's clearly that momentum on the macro side of things. Yeah, ETH in general has been a slower one to come to market. That's been a painful crawl up. So I can totally understand where they're coming from.
- [24:18]
Scott Melker
I mean, Baron Rothschild, right? Buy blood, even if it's your own. You're supposed to buy when things are really depressing and sad, even if you think it can go down. It's supposed to be really, really painful. When you buy things, guys, that's supposed to hurt. It's not supposed to feel like you are so excited because it's already up 400% and you're going to get 450%. It just doesn't make sense. But anyways, so 2025, obviously this is all noise, the price action. I mean, what are your sort of predictions? We have a lot of predictions on what will happen with Bitcoin. As I said before, multiple nation states, companies, all of this. But what are your sort of predictions since you're deep in the weeds, on what's going to happen on the defi side? I mean, is it just we're going to see more innovative products, we're going to see more institutions actually finding exposure? Are they going to be coming through eth? Are they going to go into Aptos and SUI and a bunch of others? You know, how are they going to sort of start to really engage? And will this be the year that they really start to engage?
- [25:11]
Dan from Chart Guys
Yeah, yeah. I mean, look, we've been hearing it for so long this term, adoption and institutional adoption, but I think we're finally there, right? And for us, our Our we have two main themes. The first on the institutional side is institutions are going to continue to come in via stable coins. And so we've seen that stablecoin adoption. You know, it's not the necessarily attractive narrative that everyone wants to hear. You know, stable coins again pegged to the US dollar. But what that means is once you access stable coins then where do you go from there defy. And so for us in our perspective, we think again that stablecoin market cap is going to grow through forex and then those assets are going to be looking for yield. We're going to have that yield ready on chain. And so that's where we see institutions getting more involved now on the retail side of things. We've been talking about this for, I mean, God knows how long and it's really how do you make DeFi one click? Right? How do you get DeFi to a one click trade? So that's where I get really excited about the AI agents, the agentic wave. And you know, I don't think we're going to see AI driven hedge funds. I think people get really excited. They're like oh wow, like you know.
- [26:14]
Scott Melker
To your point, I don't need an AI exchange. I was yesterday. So it's coming.
- [26:20]
Dan from Chart Guys
Yeah, I mean we're not there yet. I would say that's, that's pretty far off. And from a security perspective a lot of concerns there. But I think where you fall in the in between is where you get caught with defi is the operational overhead. It is so painful to trade, it is so painful to bridge, it is so painful sometimes with gas fees. And so you know, if we can basically get more realistic applications on AI execution, AI risk management, DeFi one click. That's the adoption mechanism. Right? That's how you get the institutions from. Okay, now I have stablecoins. What do I do? Oh, I click here once and I get 15% yield. You know, that's how we get there. And I think these AI agents are going to get us there, but they're not going to be building the sexy tech that we all are expecting. They're going to be building back and off. So we have integrated a bunch of AI into our back end operations and it's tremendous. It's enabled our engineers to do, you know, almost 2x the amount of work that they were doing beforehand because they don't have to get dragged down. I mean it's just unbelievable. But that's, I think what people don't realize. There's a lot of ops behind all of this stuff. And so we're really, really close and we're just scratching the tip of the iceberg here.
- [27:33]
Scott Melker
Yeah. To me, if it's going to be like AI agent versus AI agent and mine is trading against yours in a fully AI order book, which I think will eventually happen, it still then comes back to like, who program the better AI agent and it's just another player versus player superiority. There's still going to be a skill involved. It's still going to be zero sum. So somebody's agent has to lose to somebody else's. In that case, it's going to happen. But it's just the way I was being pitched is like, oh, you just. You're going to have an agent. It's going to be amazing because it's AI. I'm like, somebody's got to be on the other side of that train, human or otherwise.
- [28:07]
Dan from Chart Guys
100%.
- [28:08]
Scott Melker
There was a. One of my favorite comments ever was this one. Are those a big pair of jeans behind her?
- [28:14]
Dan from Chart Guys
No, it's actually. That's a good question.
- [28:16]
Scott Melker
Wow.
- [28:17]
Dan from Chart Guys
I've never thought about it that way either.
- [28:18]
Scott Melker
I didn't think about it at all.
- [28:20]
Dan from Chart Guys
Photo of a diving board.
- [28:22]
Scott Melker
But it is.
- [28:24]
Dan from Chart Guys
This has completely changed my perspective. I appreciate that. So, yeah, you know, huge pair of jeans.
- [28:30]
Scott Melker
Well, I. I wish we had more time. Thank you so much for joining.
- [28:33]
Dan from Chart Guys
Thank you for having me.
- [28:34]
Scott Melker
Her ex is right down in the comments or the description there. I highly suggest that you got to come back more often. I don't even know. When did I see you last? It must have been over a year ago now.
- [28:44]
Dan from Chart Guys
We don't need to date it, but it's been a while. It's been a while.
- [28:47]
Scott Melker
So many conferences. I can't remember. Maybe it was like Austin 23 or something. I don't even know. Crazy. Well, I look forward to seeing Upshift, obviously, launch and what you guys do and I think this is going to be a huge year for Institutional Defi. So I think it's going to be a huge year for you.
- [29:01]
Dan from Chart Guys
Thanks, Scott. Really excited. Thanks for having me.
- [29:04]
Scott Melker
Have a good one.
- [29:05]
Dan from Chart Guys
You too, man.
- [29:07]
Scott Melker
You guys are amazing in the comments. Really amazing. I still like, I'm going to. I got to go back to the other one. Where is it? Oh, God. I'm going to bring Dan on because I want Spy signal for you, man.
- [29:18]
Jimmy Carter
If I had two more minutes, I would have run and hung some pants up behind me and it would have been great.
- [29:23]
Scott Melker
Do you have huge jeans just laying around?
- [29:26]
Jimmy Carter
Big enough. Big enough for the comedic purpose.
- [29:29]
Scott Melker
So just in case huge pants. Everybody needs just in case huge pants. I don't have any though. So. Okay, so, dude, the market's market's dead. It's over. We're finished. What's going on?
- [29:38]
Jimmy Carter
It was.
- [29:38]
Scott Melker
Those are some ugly. I will say those are some ugly monthly candles right now.
- [29:42]
Jimmy Carter
It is. It's a. It's a bear. We're going to start zoomed out. It's a bearish monthly candle and we're about to confirm it again. That just means we pull back on the monthly and we look for a higher low because we know where we came from. Anything above 49,000 is a monthly higher low. And I want to talk about Fibonacci retracements a good bit in this segment just as a tool for helping to determine most likely scenarios. And so you got to watch the retracements because that gives us a lot of information. So the key will be, you know, a monthly higher low is the most likely scenario. How much do we pull back before we find it? 85, 000 or less. It's a monthly bull flag. 78, 000 or more. We start looking for a tightening range to be most likely. And that's what many altcoins have just given us on the weekly time frames. So the weekly lower highs that all coins are giving us, just using ADA as an example, they're not surprising. You know, you. You see a 60 or a 55 retracement, you create the space for that lower high to potentially take shape. And so now that's what's happening. You know, bitcoin didn't have that retracement on the weekly, so it's a bit more surprising. Bulls were hoping this was a bull flag, but the altcoin space right now, you know, there's nothing unusual happening. We had a very wide range of both directions and now we're tightening up and it's just a question of are we going to see monthly consolidation? And if we do, it just means you got to be patient because it's going to be potentially months of consolidation again. And that's the way markets work. They have periods of euphoria and then periods of boring consolidation. And we might be entering another period of some boring consolidation for a few months.
- [31:10]
Scott Melker
How do you put that in context of what you're seeing with SPX and QS and stock market in general? Because definitely, I mean, this did feel like an everything sell off this week.
- [31:20]
Jimmy Carter
Yeah. And there was, and you know, you mentioned uncorrelated asset. And if you're zoomed out, I can give you that to a certain degree. But when the bell rings, the bots and the algos spring to life. And the last two days it's tick for tick, the NASDAQ and bitcoin on this sell off. And you need to be viewing it almost as like, how correlated are we from 9:30am to 4:00pm and then outside of that because they're two very different things. And right now this is the Nasdaq. I mean volatility is coming here.
- [31:51]
Scott Melker
Right.
- [31:51]
Jimmy Carter
We're tightening up from the FOMC reaction. And again, same thing. Fibonacci's, you know, the size of this bounce told us that a tightening range is Most likely big drop, 50% plus bounce retracement. You scout the tightening range. So we're going to be looking for something like this in the next week. And the next week this is going to break and obviously direction is going to have significant implications. We're either going to see monthly consolidation. If it's a bear break, you know, the Nasdaq and The S&P 500 will be seeing monthly consolidation with bitcoin. And if it's a bull break, we're looking right back at all time highs. So it's a pretty important short term fork in the road as far as what we're going to be expecting into February with how this pattern breaks.
- [32:32]
Scott Melker
Yeah, I mean I love the perspective though. I keep trying to tell people like bitcoin goes to 75, it's not a bear market even. Right. I mean that would just be a retest of the all time high from a few months ago. Like you get back to 74 or something. Yeah, exactly. Like right there. Listen, it would be terrible. Your altcoins will be down 85%, I get it. But you can't be panicked at $93,000.
- [32:54]
Jimmy Carter
Yeah, I mean if you, if you're panicked at 93, 000, it just means you're, you're either overexposed, you don't have a game plan. Use that. You know, observe yourself, zoom out in your brain and observe your emotions and everything and it gives you information and that tells you, you know, you should be in a position right now where you're willing to sit through a pullback to 80,000 and that would be no big deal. And again, if you want to be more active, you take some partial profit into euphoria, which we Definitely were in 90, 100,000 plus. Even if it's 20%, you take off 20%. Position, you now got 20% cash. If it keeps going up, great. Your 80% position is benefiting. If it drops, you got 20% cash to deploy during some fear. And that's in my opinion is the way to just be doing partial positions when you're feeling the extremes of the emotional market cycles.
- [33:44]
Scott Melker
So right now do you feel like this is a time to be actively trading or sort of on the sidelines waiting in any market, not even Bitcoin specific.
- [33:53]
Jimmy Carter
I'm watching this potential 12 hour megaphone on Bitcoin where because we're coming from a straight drop of 102 if we do break, you know, 91 from here, I wouldn't expect a significant amount of follow through, at least initially. And again that break, we, we were looking for that break at 92, 000 last time. If there's no follow through there, that's a potential entry point. And so we'll see if that's the same. What, what bulls want to see is a lack of acceptance under 92, 000, meaning you get under 92, 000 and you don't stay there long. And that shows us that bulls are buying that, that zone. And so obviously bulls want to see that continue. For me, the, the NASDAQ and the broader market, again, it's so tight at this point. A break's going to be coming within four to five trading days at most. It's definitely wait and see mode. You know, you can be positioning within that equilibrium. Just as an example, you know, I grab some hedge position on the bounce just because we're testing the all time high, we're extended on the way up. So I grab a little bearish position to protect my long term portfolio. Yesterday I grabbed a little bull semiconductors just because I got a great entry. If we form a daily higher low, I'll have a nice position. But at this point, I love positioning within the equilibrium. But it gets tight enough to a certain point where it's all right. Now we're just waiting for it to break and then we look for the reaction to that break.
- [35:11]
Scott Melker
Yeah, makes total sense. Anything else you're watching at the moment specifically?
- [35:15]
Jimmy Carter
Man, I've been trading these quantum stocks like a madman. But just the, the volatility, I mean they're, they're putting the, the crypto space to shame. This is RGTI and in, you know, five weeks here, six weeks or whatever, we're up a thousand six hundred percent. And then we have the Nvidia CEO coming out and saying I think quantum computing's 15, 30 years away and you know, two days from the all time high, we're down 58%. It's, it's 2017 crypto right here and I'm loving it because there's so much liquidity and dollar volume in these things and just, you know, 10% both directions every day. Friday was 35, 45% in both directions every day. Not Friday, yesterday. So if you're an active trader with experience, Quantum stocks is where it's at. But expecting again, retracement. Right. Fibonacci retracement. How much did we pull back? All right, over 50%. Now we expect a tightening range and volume and volatility to drop off as this fervor of activity and volatility settles down. And it's going to be boring. You know, this sector which is, you're.
- [36:21]
Scott Melker
Going to have to find, you have to go to meme coins now, buddy.
- [36:23]
Jimmy Carter
Sorry. And that's the beauty of being a trader where you're not focused on one sector. It's just follow the opportunity. And you know, I didn't know anything about these stocks six weeks ago and now they're my most actively traded thing by far. And then when we tighten up and the volatility and volume drops off, I'm going elsewhere and I'll find something else. And that's why when you have confidence in technical analysis, it's just beautiful for opening up a world of opportunities in whatever market is volatile.
- [36:51]
Scott Melker
Yeah. Ben Cowen says it's related to bonds. One of the comments. I do tend to agree that the bond market and yields going up when the Fed is cutting, it's causing a lot of confusion and hesitation in the market. So I don't think that that's a bad take.
- [37:07]
Jimmy Carter
Yeah, I mean you saw when the NASDAQ topped out with that most recent daily lower high, it was economic data that, that pushed this, this big red day back on Tuesday. What was it, manufacturing numbers or something? You know, for me as a technical analyst, I'm aware of those, those fundamental things to tell me volatility is coming when this number comes out. But the number itself doesn't mean anything to me. It's always the price action. But yes, there is macro concerns. The 10 year up at highs definitely having an impact. So definitely, you know, a factor to keep an eye on. That's why I always say, you know, technical and fundamental spectrum. The only wrong spots to be here is at the extreme of either you have to have the window open of at least a little bit of one or the other.
- [37:53]
Scott Melker
Yeah, perfect. Well, guys, you can follow Dan, of course, at Chart Guys on X and check out his YouTube channel and his constant content. I just love. You're just always. And that's. We. That's what we do here. But you're just always calm. You know, you've got a plan and you're ready to go and unfazed. And I know that, like, when people watch YouTube, they want to see somebody, like, freaking out with the big face and doing an emergency video and telling you what you have to do. You never have to do anything. Like, you don't.
- [38:21]
Jimmy Carter
Yeah.
- [38:21]
Scott Melker
I mean, no, there's no. If you believe that you're in the market and there's an emergency that you have to deal with that you have not planned for, just get out already and don't buy into any of that shit. I'm sorry. It's like, you know, I just see the people panicking right now and you can just. You can feel it, you know, like when you. When you interact with community, just have a plan. It's going to be fine, or do this.
- [38:45]
Jimmy Carter
It's. It's hard when you're an empathetic person because I literally feel people's stress and things like that.
- [38:51]
Scott Melker
So it's. It's. It's obvious. And then they throw it at you.
- [38:56]
Jimmy Carter
It's your fault.
- [38:57]
Scott Melker
It's definitely my fault. There's a guy in the comments who thinks it's my fault, and he thinks it's my fault on Twitter. Where is he? This guy. Crypto shark data. This is why you don't. I'm gonna find it. Oh, I realize it's the same guy. One second. This is why you don't shout one. See, every time price goes up, I say like 102k all day or 105k all day. I've been doing it since, like, 3000. So, like, I'm sorry that I did 100. It's just my way of announcing price. I found it. Here it is on X. He called me a scammer for that. This is why posting that 102k all day was called out. Scammer. It's a scam. Me telling you the price of bitcoin is a scam. Maybe you shouldn't be in the market. Good times. I appreciate you showing up to YouTube, though, to follow along and retrol. It's always good to know that you're loved, Dan. Really, though, it's amazing. You're always calm, collected. Your perspective is great. And we are going to be back next Thursday with you, I hope. And of course I'll be back tomorrow with the Friday 5 at 9:00am Eastern Standard Time. And thank you as always, been a pleasure, all of you. Thank you. See you tomorrow. Bye.
- [40:20]
Dan from Chart Guys
That's dope.