 What is going on everybody welcome to market talks here on coin telegraph. I am your host for today. My name is TA Tim I'm from the crypto jeb team and I'm so excited to bring you guys this episode where each and every single week We bring you all of the best information you need from some of the industry leaders and greatest influencers out there And I'm so honored today to be joined by Nicholas Merton and he is just absolutely phenomenal Nicholas is a the founder of data dash some of you guys know him by that name He's one of the largest cryptocurrency YouTube channels with over 500,000 subscribers He's been an international speaker thought leader and crypto analyst in the space over 10 years with experience in traditional markets To understand the potential of crypto currencies, but let's roll a video with a little bit more information about him Boom the last thing that none of that said was he's also a fellow Virginian So those of you don't know I came from Virginia, but Nicholas you're also from Virginia. I understand That's correct. Yeah. Yeah, so where are you born and raised in Virginia? Yeah, where are you located right now? So I'm in Europe at the moment I Traveled I basically made the trip over in about 2020 started looking around and so a couple different cities and finally made a move in 2021 at one of the most unlikely times and absolutely been lumpy up, but I also love getting back to the States as well Man, I that's that's all cool. I was you know, we got to talk a little bit before the show I'd love to go out there and see all all of Europe and definitely go out and see where you guys are doing But you know, I want to go ahead and jump running because we got we could probably do a show for like three or four hours Talking about the crypto space, but we got to keep this to like 40 minutes. So let's dive deep in here I want to start off. Let's just go right on in with Bitcoin I want to hear what your overall thoughts about the market are right now. Let's start You know, we could we'll talk probably a little bit more later on the show But do you think the bottom is in or do you think that we maybe have another bottom to go here in the next little bit? Yeah, I mean my thoughts for Bitcoin right now is that in the near term for the coming weeks We've got more upside to come. I think that we are going to get up to one of those big target ranges Likely there's a chance that we could get 30k I do believe though that we are going through a typical bear market relief rally That's gonna send for the coming weeks and then we are gonna probably come back down to that bottom range and get the double bottom in the market We've seen this in the past many times from the previous bear market After the rally all the way to 14k we came all the way back down to $39,000 Just a couple hundred dollars spread from the previous lows and from the previous bear market before that We also saw a similar pattern where we had nearly a years long sideways Consolidation and a revisit flush back down to the lows And I think that is more likely now than ever that we're gonna be getting that as well as a pretty exacerbated relief rally Due to the fact that this market is driven by credit and leverage So I guess some if you want I can back into the chart so we can kind of kick off that Yeah, yeah, let's go ahead and get that chart because this I mean that's the question on everybody's brain is Is this rally we're going through right now? Is this actually did the bottom come in? Are we rallying back up to all-time highs or is this just a really relief rally? I'd love to see your charts and see what you're seeing on them Absolutely man. Yeah, so to kick things off here I want to go ahead and try to talk about really what's happened over the past month You know before this breakout we saw back here from around 20,000 to 23k So the important thing to understand about markets is there there's a couple different ways you can trade crypto or practically an asset class Most people generally trade spot, you know, they're just buying Bitcoin or selling Bitcoin or trading their favorite all-coin in and out of market and Considering that we also need to consider that there is a market known as derivatives derivatives play a major role They drive a lot of the volume and liquidity and value traded within this market on an active basis Now during the past month, we've been going through a consolidation channel here Price has been going sideways for over a month here up until mid-July here where we finally got a pop out a major Deviation off of the trend here. Where is the past few previous times? We deviated maybe slightly in and out of the channel each time going back down and testing the bottom part of the top part of the Range now during this period of time a lot of people were placing some pretty big bets They're pretty volatile times you had Celsius Voyager block fi whole range of companies really going through this major bankruptcy or Restructuring period a lot of people getting liquidated out of their positions whether they wanted to sell or not Effectively being forced to sell and exacerbate the correction And that's what led us down into this territory in the first place And that's exactly also what happened as well back here in May of 2022 we basically had a month period of consolidation and essentially price Basically screamed on the spot market it once lower and now the sell-off would have come in But it was more exacerbated here because of the liquidation the margin calls and liquidations that came and followed now Yeah, a lot of people think that that can only happen to the downside it can happen to the upside as well and Just like how we can get exacerbated corrections due to this Liquidation metric within the market you can also have not only just long skin in liquidated You can have shorts getting liquidated now It is very probable that if we had a significant enough breakdown below this previous support range that we were consolidating on for a long period of Time price would have sold off down to 1415 K probably very predictable Unless there was buyers who want to come in the market now that we've squeezed up here We're gonna talk a little bit later on about how there is not only a ton of dollar liquidity That probably wants to enter into the market of these discounts providing a good buy opportunity But even if not much buyers come in if just enough come in to push up prices to 24 25 26 K It's not hard to think that we could come up to 30 K because of the elements of a short squeeze the complete counter opposite Of what we saw back here throughout the month of June as well as here in the month of May that led us into these consolidating zones Yes, so even right there I want to you know stay on your screen and I want to talk about that because a lot of people are kind of almost acting like 30,000 is this this myth like oh, that's that that number right there. You know people are saying we're gonna go that high But we're not actually gonna do that. You know, what are your thoughts? What would you say to someone who's kind of sitting here saying I don't I don't believe that Bitcoin can get back up to 30 Right now, I think it's gonna take a lot more time What would you say to someone like that and what is your reasoning on those charts to say that that? 30,000 is a lot more plausible than some give it credit for I Will be self-critical, you know looking back over the past past couple months You know a lot of people including myself were thinking that man You'd be really hard-pressed for Bitcoin to break that 30k support level back when we were up from 40 to kind of 35k I thought that as we came down into that range and retested the May 2021 lows at around 30,000 that this was like, you know the temporary bottom We've got move upwards are gonna retest the highs and a lot of people thought that that level couldn't be broken And if we look at the chart, I mean we got a clear breakdown in this case That level was completely, you know, basically completely crashed through it and the consolidated range came down here We couldn't hold it We didn't get buyer support coming in and it was enough sell side pressure to put us into yet another Domino effect of liquidation for selling on the market and I think it's the same kind of kind of arrogance to be honest I don't and maybe it's a bit of a harsh term But it's it's that same kind of narrative of please it can't happen the fundamentals We're allowed the macro environment right same kind of arguments that we would have said, ah But before you know, you got ETH the merge you have all these optimistic things that just couldn't let us come down below 30k I think it's it markets are completely irrational Sometimes that's the thing that people don't understand sometimes that I've learned so I've learned honestly the painful way through traditional markets in Crypto is that markets can stay irrational longer than you think and the crazy thing about it Is that when we get up to this 30k range? And I just want to kind of map out what I think is going to happen here. Just going off the chart I think that we've still got the momentum potential to come up here to revisit this $30,000 range chart and the first thing we're going to start to face resistance with and eventually start to face chop With is going to be these these descending lines here. These are moving averages They are the 200 day moving average and the 200 day exponential moving average Which of course moves a bit faster than the simple moving average But these are going to start to come down here And we're going to have to see whether or not price can turn up above them and make them support and Actually justify a higher trend or if they're going to get shot down And I really think that we're going to set up to eventually break down here Don't take my drawings as gospel of course But this is kind of just a framework in mind to kind of visualize it eventually come back down into this consolidated range Probably at a higher low here to see that we had this strength here and buyers coming in this signals that for the past Month there were buyers coming at this range. This is an interesting price range for people to comment And it's at a really solid discount It would make sense that some buyers might come in here and want to formalize an official bottom and a start to the next Rally sometime in 2023, but I think that this is a relief rally It's not one that's just going to be a week long, but it will go into the later part of July and potentially early August into this summer You know, I want to I want to pause you there. You know, my name is T a Tim. That's what I'm go go by By the name, I love technical analysis So I love hearing this, you know, a lot of people will give feedback for technical analysts though They'll they'll be like, all right, what are these lines? You know, I know people say, you know, we have to go to that line and touch it Could you for anyone who is kind of newer to technical analysis or not really sure about technical analysis? Could you go into depth on the importance of those 200 daily lines as moving averages because they are really important But I don't think some people fully understand just how important they are That's so that's a very good point Tim and look like T is a very subjective thing I don't want to say that it's the ultimate indicator to rely on. There is no one single indicator That's absolutely going to tell you when to buy or sell but the 200 moving average Especially on significant time ranges like the four-hour time frame the daily the weekly Has incredibly significant value in financial markets because it is one of the longest standing Utilized indicators in traditional markets and of course and what I found when I came into crypto in 2017 Is that you know all the while over time? I think it's effectiveness is not as valuable Back in 2017 like core technical analysis patterns will really matter But you had to zoom out you really had to like look at the longer-term time frames And if you look time and time again at the 200 week moving average for example And I could I can bring up the chart here if we take a look at the longer-term time frame We can see that for Bitcoin The longer-term all-time history Go ahead and pull up here on the chart if we get here to the weekly time frame This is typically Where we're gonna get some type of accumulation of buying when we come down to this range here anytime we go below that Two under moving average buyers usually find this to be capitulative entry territory And no matter if it's an absolute bottom or not we hung below this range here for quite some time We weren't rolling back over and buyers are pushing up price They're signaling that hey this is a value range here And if we look back at history any time we dip below here and we come up We usually are gonna come up at least to the 200 week EMA here for taking inspiration from 2018 Or if we go all the way back to the previous cycle here, right? We're at least gonna push up above those moving averages and range sideways for a while So yeah, I think that to that point again like I could go on a lecture for hours But to the point you're talking about Tim, it's a indicator that traditional financial investors Utilize in traditional markets even day traders utilize on shorter time frames to find entries and exits So and to find support resistance essentially You know another question I have for you so it you know in my TA I think there's a couple different things we're looking at but I want to ask for you Is there anything you think right now? Is there a point that you're looking at that's separating us between right now? I believe we're sitting in the lower $23,000 levels and that $30,000 level what are the price points you would advise anyone to look at to say hey Make sure you understand what's happening around these price point levels because these could reject us and not allow us to get to 30,000 Yeah, I think one of the greatest charts we could take a look at here is taking a look at the ETH to BTC ratio So one of the things right now that I have to say we had a target for theorem to come up to this upper green band here This is the ETH to BTC ratio So it's comparing a theorem to performance against Bitcoin and what we saw here was really fascinating We saw kind of like a whipsaw move here where we broke below this ascending channel This spooked a lot of people as it was happening over multiple trading days And it just kept getting worse and worse and when we had the federal excuse me the US Bureau of Labor statistics come out with the CPI numbers and they were really bad in a lot of people's eyes It was really only what about 10% of banks had estimated for really kind of the worst-case scenario lo and behold markets reacted really well to it and pushed us back into the channel and we came of course this was essentially a deviation at this point And the rule is that when you deviate from the channel or consolidation pattern, you're gonna come up and revisit the highs So when we saw that breakout higher we call on the channel We come up here what was crazy and what I didn't even expect is that we completely went up here and deviate on the top part And now it's a question of whether or not the ETH to BTC ratio can hold out on this 200 day or 200 day EMA Which I think it's gonna consolidate against for the next couple days as well as this line of previous resistance to see if it Can become new support if we continue to like kind of chop in this range and build an ascending triangle That's essentially gonna set the stage here for sometime in late July early August to just continue that trend Where if your aim is outpacing Bitcoin and I think in dollar terms all cryptos are gonna continue to move higher here And it's summer relief rally again a lot of people think that it's overbought now And I understand where people are coming from it's made a major move here But if there's enough liquidity in the market if there's enough Liquidations at those price levels up above this range a lot of people loading in short It's just gonna add fuel to the fire and that's just gonna lead the rally even more exacerbate But what do you think about 10 like I'm curious what your thoughts are on this? Yeah, no, I mean so I I would have thought and I was actually I talked about this on the show a little bit ago You want when you go back you look at the last couple of months and when we're looking at the CPI numbers coming out when We're looking at the the FOMC reports, you know We seen you know There are different times where those numbers led to some rallies and there was other times that it led to losses and more recently Even the CPI numbers had some losses So I was one of the ones when I saw that 9.1 I thought we're gonna go down but when I went back and looked at it and I and I was really evaluating What people even need to understand about Bitcoin in commodities is it of course is going to respond in a Opposite direction of the power of the dollar right now. That's that's just how Bitcoin is working So, you know in hindsight the CPI the numbers they only had effect when it was it's so high that we think That the Fed is gonna have to come out with just some outrageously aggressive numbers to raise the interest rate Which would bring power back to the dollar and if the dollar gains power So that one of the charts you would look after that one would be the Dixie the DX Y when it gains power Of course Bitcoin and other commodities because that's how Bitcoin is treated is gonna go down When it is not gonna when they're not gonna raise interest rates very hawkishly when they're gonna be a little more Dovish it actually would bring power back to Bitcoin And so I think that was the confusing is I think myself and others thought them we saw that 9.1 We thought that the Fed was gonna maybe be a little bit more hawkish and we have to wait here a couple You know a couple more days before we actually find out that number But it's looking very much like they're just gonna stay right at 75 whereas in reality when we're looking at these inflation numbers Most economists are saying we really probably should go to the 100 basis point maybe even go 125 But it's looking like Powell is gonna stay at 75 or at least that's what the futures Predictions are saying at this time. So with that being said those 9.1 numbers that doesn't really mean anything that it what really matters is Hey, are we pricing in? What we think the Fed is gonna do with the power of the US dollar and then of course yesterday We had those numbers come out with the euro and then we've also heard about the British pound It looks like those interest rates are actually starting to climb giving those currencies more power Which of course affects the Dixie which of course for those of you trade Bitcoin over the US dollar It will affect us. So I think the rally it was a surprise to me But in hindsight is very easy to say all right, let's go back and let's read let's rewire our brain Let's not focus on inflation Let's focus on power of US dollar and every time the power of the dollar goes up The authority and the power of Bitcoin will decrease because they're very much inverse right now Vice versa, of course, you know when the power of the dollar goes down I think Bitcoin will climb and that's what I think what we're gonna see happen here If nothing changes is the power of the dollar is gonna continue to decrease and that'll cause Bitcoin to climb Yeah, exactly to your point Sam. There's a chart you just reminded me of I just got it pulled up here And this is something that people need to learn about the Federal Reserve that I think again people think they take the Fed at their word And all the while they have been very good about raising interest rates over the past couple of months This is a chart. It's a little bit outdated now, but it showcases a similarity of the inflation wave We're going to starting from January 2020 You know with the implementation a lot of the stimulus that's then started really have inflationary pressure in 2021 It's mapped back from the wave of 1972 into the 1980s So each of these I think we go from the 50 interval 100 This is months of of time moving throughout here and you can see then in the previous wave here We got to very similar territory to what we've gotten to recent We got those numbers. I think at 9.1 percent if I'm not mistaken and Back in the past we went to around 10 to around 12 percent and then after that inflation cooled down here We got all the way down to five percent year-over-year and people thought this is where wages capture up This is where the Federal Reserve can start to ease and they started to ease because the federal always chase some Temporary relief essentially to cool down the fear and equity markets and push asset prices up in order to hopefully Stimulate the economy to get an avoided recession But then just like we saw here back in the late 70s going into 80s We see it yet again start to spike that up and go all the way to 14.8 percent And this is where the Fed had to pull was known as the Paul Volcker rule where like it's like we're gonna lay down the law We're gonna jack up interest rates to astronomical levels. It's gonna kill housing demand. It's going to slow the economy It's gonna stop credit creation and then eventually. Yeah, we know we're putting the economy to recession We've got to and the feds kind of playing on a thin line trying to hint towards that They don't say it outright. They need to put the economy in recession and once we get that it's gonna drag inflation down low enough Well, we can start to see how surprises go up and I think you know like again like right now We can see if we take a look. This is the current federal funds rate at the moment We're at 1.2 basis points, you know and next and Yeah, for sure. Absolutely. Yeah, can you see that good or maybe I can zoom in a bit more. There we go so this is the federal funds rate at the moment at 1.2 and The effective thing that I want to emphasize here is that as exactly as you mentioned him We've got the 75 basis point height coming up here that that is where we're going I think the markets are seeing a leaf because the Fed is very stern I mean there was tons of hints after the CPI report where Fed officials kind of leaked unknowingly that oh, yeah No, we're not doing 100 basis points. So if you had the 75 basis point hike I think over the next two preceding F1C meetings We're gonna add a 50 basis point at 25 basis point The Fed is gonna start to go down and and that they're gonna basically take it to about 2.7 here Roughly speaking around this range a little bit higher than where we were back in March 2019 The reason I think they're gonna do that is exactly the points you talked about Tim You've got oil which is cooling down I think we're gonna probably see even again if it's temporary a breakdown below the 200 day Which has been generally acting as support for oil I think natural gas start to cool down a bit and on top of that as well This is the chart that is like the most damning of all This is the 30 year fixed rate mortgage average in the United States We've been four decades of and basically a four decade long trend of declining mortgage rates And it's not to say that long term this might not tick back up But we need to understand how fast the Fed has been accelerating rates and how that affects essentially other rates in the market Like the rate to borrow capital in order to buy a home which is a mortgage and take a look at this acceleration here in about 18 months The cost to borrow money to buy home has gone up effectively a hundred eight percent Right in real terms. We've gone from around two point six percent to five point five percent like to put this in perspective I don't know the exact numbers Like if you wanted to buy like a certain property whatever value and that property required You had an income like a dual income of like two hundred thousand dollars You'd effectively need I think something along the lines of like an income of three hundred thousand dollars like some huge astronomical increase in salaries which just isn't gonna happen for people So less people are gonna be taking mortgages and this is how the Fed Yeah is trying to cool down demand because there's such a supply shortage in the housing market and a lot of demand still to buy those homes You know, it's interesting. I I feel like Nick in in the last three minutes You just opened up so many top when I said we could talk for three hours You just talked about right there is why we could talk for three hours But I'm gonna try to pick it in your little ones. First of all, you talk about the interest rates going up and and oh my gosh You know, I know Kevin O'Leary for example, who I think is coming on this this show sometime soon You know, he's been on record is saying, you know here in the future You're not gonna own anything and you're gonna love it and I think specifically talking about housing Like it's gonna get to a place where if you cannot put cash down and buy that house in cash You're not gonna buy a house. That's like that's what we're seeing happen here in Florida to where a lot of people are just coming from northern states And they're just buying every single house comes on the market with cash because they realize if we can get this now There's some scary things ahead and people just will get be in a spot where they cannot buy house They'll have to rent and we can capitalize on that with the with the Real estate market and it's kind of scary I don't know if Kevin was saying that in a good way or a bad way what he was kind of playing on is hey It's gonna be a place where You won't own anything and everybody else own it You'll just rent it from them But they're gonna make it in a way that they're deceiving you into being happy about it But I think what you're talking about right there That's that's exactly what we're seeing play out with these with these interest rates And here's what you know, take that a little bit farther I'm gonna ask you to go back to the other point you're talking about how you think potentially we'll see a 75 basis point hike here The next time the next time we get to see an interest rate hike is gonna be actually in September So they'll take August off. We'll still see CPI come out We'll still see is inflation actually curbing is it going up But then we'll see another number in September and October and I believe November's taken off and then we see December again I'll have to fact-check that but you're saying that you think 75 here in July September maybe 50 and then October a 25 basis point. Is that correct? Yeah, I think the Fed is is basically under the assumption that and basically the CPI has really been driven by one thing now And that's commodity prices around energy. So oil and natural gas I simply think that the Federal Reserve thinks it has it in the bag as it typically does it over it eases too soon And as you mentioned, that's over the course of a couple months going into the fall that we're really gonna start to see that Because I think essentially that the Fed like they want to play tango. They always do this They essentially try to just ease enough, but they understand that they need to tame inflation long term The unfortunate thing is that instead of going hard and possibly even doing that 100 basis point hike Which honestly seems like a very much like a Paul Volcker move like, you know Consecutive 1 1% hikes in this case to essentially put the economy in a forced recession That would probably be the right thing to do the painfully right thing to do But actually I got here up on the chart exactly to your point earlier Tim I think this is the setup here. You've got other foreign central banks raising their interest rates And you've got the United States starting to Eventually cool down and I'll point to this not only is this what I think generally is gonna happen here We're gonna come back in this consolidated pattern for the dollar for the dollar index Which means we've got about a 2% decline here in the dollar a lot of people thinking this will be the top here But again, I think eventually we're gonna spike back up. I'll turn on my drawings here I think what we've got here for the dollar is a revisit back up to a long-term line of resistance We've written about this in our newsletter a lot coming up to this range here over some time in 2022 2023 And that secondary wave of inflation where the dollar is gaining dominance against other currencies But it takes time to play out and I think a lot of people are gonna look at this monthly candle here and go Oh my gosh, it's a clear top like it's an exhaustive candle has a very tall wick at the top and then we think the dollar is in But if we take a look at the 30 year yields here, this solidifies it even more This is the again are those moving averages. This is on the monthly time frame So we're talking about significant moving averages and the 30 year yield is what you get Yeah, it's what you get on a 30 year Treasury note from the Fed Excuse me from from the government essentially Now when we take a look at this chart here We got a clear rejection here in the short term and what I think is gonna happen here on like a pure TA perspective But it also plays out with our assumption what the Fed's gonna do It's gonna come down to this range here when the Fed is starting to lower tightening where it will come back here to 2.5% we're already seeing that start to play out here The bond market is smarter than anyone at predicting what the Fed is gonna do is hyper efficient because it's such a big market And essentially they're gonna drag it back down here to 2.7 hitting more towards that target We were talking about on the Fed funds rate and guess what's gonna likely happen after that I don't want to speak in absolutes But I think what you've got is the potential opportunity here for us to whipsaw come down here and start to build back up And start expanding rapidly and that's again if you look back at the chart here We don't have all the history here But the 30-year yield got up to 10% back here back in 87 and even higher I think prior to that because of the Fed hiking interest rates to the bond yield Charters where it anticipates that the Fed is gonna go with interest rates That's what I think is like really the big news story if that happens I mean you can just see here. This is a Generational type event for financial markets who think about it if we take it here And this is the quarterly chart here so each of these candles represents three months I mean this is already a significant break out here. It signals that we're about to reverse on interest rates And what the Fed is gonna have to do eventually they're eventually gonna have to expand it quite high I don't know if we'll get the same double digits that we got in the past But it's gonna be high and it's gonna be painful for the economy in the short while So that's like kind of the six-month year-long look out in the short term I think we get relief off of the Fed's obvious move towards Short-term softening in the economy and pulling back its commitments to quantitative tightening Well, that's I think it's really interesting and so just to kind of You know set the background for anyone who's listening as we you know move here The Fed's kind of stuck in a rock and a hard place right now We both have ridiculously high inflation We also are in impending recession and of course with the Fed when you see recession the Fed's number one move is to Go ahead and lower interest rates makes it easier to borrow money makes it easier for people to spend and continue to live their lives And so for that reason the Fed would want to be very dovish to Cancel recession we've seen the White House come out trying to you know saying it's not over yet There we have a chance we could avoid recession and I think Jerome Powell's even kind of try to say hey We're still trying to avoid recession so those of them the mo the momentum saying hey lower the interest rate And then the other side is when you have high inflation what you do you raise interest rate And so that's he's sitting in both of them. We have high inflation and recession coming. What do you do? So it sounds like Nicholas you're saying that you're expecting them to go after keeping us out of a recession rather than actually fixing the dollar Yeah, I think there's political pressure for it again Like it's not even like an opinionated thing the Biden administration just like any other presidential administration is Knocking at the door of the Fed saying like essentially like we're already having high inflation here Don't put us into right session right now. It's the last thing I need and it's again It's a rock-and-hard place. Do you like continue propagating inflation in the economy or do you put us into a temporary recession? I mean no answer is good unfortunately and this was not due to anything other than the monetary stimulus and The complete like whack job we did to the supply chain system following the restrictions during COVID Those two things have completely stunted the economy and put us in this position where supply chains are messed up You have a huge intense labor shortage in the market This is something if you look at like the labor force participation rate and the number of job openings They're completely inverse. There is less people participating in the economy Before pre-covid and you've also got a record number of job openings But you're not seeing salaries go up fast enough to cater into inflation And you're also not getting those job vacancies filled and this will eventually Start to put us in I think likely and to the inevitable seat where the Fed has to jack up his interest rates take upon the opportunity Put the economy in a recession Cool down inflation. Let supply chains catch up and boom We'll be able to like return to normal to some degree But the Federal Reserve of course will push push it off into the last minute because they have a lot of global pressures They've got governments. They've got other central banks. They've got financial markets. They don't want to see it We've got you know, congressional members trading stocks And I mean there's a lot of people who don't want the Fed to have to do this hard decision, unfortunately Yeah, well, let's go back to your Bitcoin chart real quick I'm gonna ask you some questions about what this then means potentially for some price moving here Okay, so we're gonna get a 75 basis point height, you know rate hike this next week, right? So we kind of feel like the price has been baked in on that We're gonna move a little sideways and go up and then we have two months off And then we come back with a 50 basis point and then we have a 25 after that So do you believe that we could potentially move up and sideways throughout that would put us through October That we're still hovering up around 25 to 30 thousand dollars by October or maybe even higher You know, I'll be honest. I haven't thought about it that long out But if we're taking a look at the weekly chart here I think the one important thing for the bulls to understand is that it's gonna take a couple of weeks to get up in this range And I think if the Fed moves forward with just doing a 75 basis point I think you believe this as well Tim if I remember correctly from your content Like I think it's generally speaking that if the Fed does 75 basis points It's already kind of I think starting to get priced in But I think it's going to lead us up here into testing this consolidated range And like you said, we can trade sideways for a while We might even test below the range here's the 200 EMA is around here I think it'll float around this range here going forward as price starts to come back up And essentially try to make this range support And again, maybe even with lower like rate hikes and stuff like as we progress further and further That will give us more confidence here that we can hold up in this range But I think eventually we were going to have we're going to have this eventual turnover event where the Fed Is going to have to tighten again that the cpi numbers are going to surprise Now we're going to go. Oh my gosh, it's getting bad again And that will even if the Fed doesn't react immediately. It's going to spook asset markets like big time Because they're going to realize that just like back in the past. We've got that secondary wave here of inflation So again, I say learn from the 80s learn from history There's a lot to be learned there and it's uh, basically a battle isn't one overnight essentially We've got the short-term relief rally take advantage of it But at the same time like if you're just going all in trying to predict the bottom It's going to be very difficult in this macro environment Yeah, and that's it's so yeah, so hard to predict I'm just I'm following because this is actually really cool. I think you were the first person I've ever I've ever heard think that uh, not think that I mean, I haven't heard a lot of people Give their takes but to give the take that they potentially will stay dovish going to 50 than 25 Which I think is a really interesting take I actually think that you're you're just trying to follow the way the Fed's been acting and what they're trying to fight Choosing hey, we're gonna fight the recession word. We're not gonna fight inflation But you know tell me if I'm wrong that actually I I think if that happens I think we potentially could even break through 30 and head back up towards 40 Because as this happens the dollar the value of the dollar is going to go down because inflation is still going high We're just not curbing the interest rate, you know not raising interest rates bitcoin commodities gold everything else is going up But then like you said dragging it down the road is when they're going to kind of get more aggressive and say All right, let's fix the u.s. Dollar What do you think and I know you said we can't make this prediction perfectly But I think there's a there's a a wide held belief that October November could be a good time for a bitcoin bottom, but if what you're saying is true I think that gets pushed off even further maybe even all the way into mid 2023 Which I don't think any of us really want but if that happens the way you're saying What do you think a more reasonable time frame for a bottom of the bear market would be? Yeah, I mean to be honest it really depends in that fed direction But to the point you brought up Tim like again I don't want to stand a hundred percent in conviction of it But I think you know when we zoom out here to the long-term chart for bitcoin if we take it back again I'm zoomed out here on like the monthly time frame I think the thing that people forget sometimes is that bear markets are periods of stagnation where We really don't come back to the previous all-time highs and kick off a new cycle It can last for a really long time You know for example back here in the past We started off the bear market in the first the significant one back here in June of 2011 We came down to lows in November But we pushed sideways really for a long period of time here going into 2012 And it was a long time before we came back to those previous all-time highs And if you take a look here in 2013 and we expand it further and the big thing here that we need to understand As a lot of people rightfully pointed out That again, it took me a while really like pay attention to is that bitcoin Is never really gone through one of the 40 50 plus bear markets And I think that it's a very important thing to understand like when we talk about equity market bear markets like in the stock market essentially The definition is typically 20% or more down people have some variations of that But you generally we're already in a bear market in equities clearly The question remains though Do we get the typical 20 30 correction that has happened many times over the last decade during this really like decade long bull run of credit expansion and equities and crypto and everything Or are we going to get like a 2008 dot com era Like bubble pop where we go down essentially 40 50 even potentially worse and equities and if that happens And crypto doesn't start to decouple And really start getting investors excited into being an alternative head rather than a speculative asset Which is what people see it as now That's going to crush crypto markets big time And all the fuel will be there for it to happen because if everyone starts longing that 30k range If we push sideways we consolidate sideways for a while people are thinking oh my god the merge is happening You know we're either scaling now The new market cycle is about to start and they're starting to put their leverage long They want to start revenge trading and getting back for the losses they made months ago It is going to give all of the perfect setup for things to go right back down And it's going to be painful yet again for those people like and that's the big thing on my channel It's not that like you can't leverage trader use leverage as a tool I think if people educate you properly on how to use it it can be fine But leverage is something we don't talk about on the channel. We don't promote it and And the reason why is because it can it can really like rob you of your entire exposure long term And who knows in a year or two even if you just dollar cost average now, you could be doing great No matter how bad the macro is now, but I just again, I recommend people stay away from leverage It's going to cause more pain than good No, do you want to hear something really sad nick list that my team and I were doing some numbers on So i'm not even showing on the chart but back on uh on july 18th, right? Bitcoin was rallying and it pulled back down 4% okay 4% I think I think maybe if you did wicks 5% let's if you bought right at the peak on july 18th The rest of the day it came back down. Let's say 5% There were millions of lick of long liquidations on that day And I'm sitting here saying how in the world did people It's leverage these people were were putting up 25 or greater x leverage and getting lick and it's just like oh my goodness like I mean, I'm really big. I'm really really big. I tell people all the time like Hey, you got to play very very careful with leverage and I am I'm of the personal opinion everyone else You got to decide your own risk to reward ratio, but I'm interested to hear what your number is for me It's five five x if I ever entered a trade with five x I I feel I'm I'm really bold that day. I I just have a lot of confidence There's just so many things pointing But even to me like I I would enter a five x and be like oh, okay This is really shaky ground right here to me even two x you're starting to be like, okay This is playing with fire here. What is your thought? What's your number? I think in crypto it doesn't make sense to use any more than two or three if if you're gonna use it Like I mean like again five again five if you're doing like a short-term trade I think that that's fine. You have proper risk management The only thing I would say though is that the people I really don't think understand like about leverage trading That I always try to get across because it makes it really like you really realize how personal it is These platforms that promote leverage As their core product line through perpetuals or whatever their casinos in my eyes They know that 95 percent of the customers who come through Are gonna lose money and again and you can take a look at a more mild version of this If you go to like traditional trading platforms in europe They make them promote the number of how many traders either lose money or lose like their entire funds And you'll see numbers like 60 70 percent when you add leverage into the equation Those exchanges essentially know when you make a deposit they're like, oh cool. That's revenue for us We just made money You know like because they know that on paper and that's why they give on like the big sign-on bonuses and stuff It's because they know you're gonna lose money and what I would hate to see right now There's a time where inflation is so bad where it's it's crippling people financially To lose what little remaining disposable income you have Into investing or trading on leverage and you just give it to an exchange or a smarter trader in the market Who's gonna hunt your stops hunt your liquidations and get you forced out of your position Whether you like it or not because you got a bit greedy or took on too much leverage I would hate to see people fall into that trap. So, uh, yeah, I mean again I'm sorry if I get like a bit opinionated and like emotional about but it's like I know some people who have gotten who have lost generational wealth off of leverage trading and I see it like going to Go into a casino and betting an all-in-game poker essentially Yeah, you know, it's funny because we all know somebody I think anyone watching here has heard of somebody getting Massively hit hard with liquidations. What's he worse? I know someone I know someone who is the taker and I was I was actually having a conversation with him Uh, you know, those you don't even know who is his name is magic internet money And I would I would love to get him You know, maybe even on this show at some point to talk because he uses this tool where he's looking at volume Down to like within like the seconds and he was walking me through and he was literally like Yes, so if you see right here, you can you can watch the longs being entered But you can see when it starts to trickle out and I can I can pinpoint the moment that those longs are vulnerable And I can short them and I can and he said unfortunately He's like you kind of sometimes to make money doing it this way. You got to realize I'm making money because I'm taking this from somebody else And so the thing is like there are there are people out there that are so good at trading and their tools are so So detailed They know they they literally know how to take your money when you're entering these leverage longs and shorts So it's definitely something you got to be so careful with Uh, you know, we have a couple minutes left here. Oh, yeah, did you have a response to that? Sorry? No, no, I think you hit on a perfect time I would say like again if there's people out there who are going to do it either way and they're like I don't care. I want to go leverage trade keep your margin like keep your leverage levels Like low single digits I think again as you mentioned max five really like two to three acts I think is more more sensible like for like larger positions of your capital I think the secondary thing as well is to always have additional margin on standby Make sure that you can deposit funds into your account and protect yourself And make sure that you lower your liquidation price never go all in That is the biggest mistake and ironically enough That's what leverage as a tool is helpful for is that it helps you to have a smaller position size And you can still have the same kind of market exposure So anyways, yeah, no, anyway, we can get something else, but I just wanted to You know, we gotta we're not to wrap it out here soon It's been a great like I told you we could we could be here for three hours Unfortunately, we had 45 minutes But I wanted to give your you know last question I wanted to get your quick take on what your thoughts were of elan and the tesla news that came out here the other day With them selling about 75 percent of their bitcoin Do you think that I actually could have been potentially A bullish move for the price of bitcoin or do you think that they were going to see some bearish ripples that come from it? Yeah, I think on like I've got it like the tesla chart up here to kind of talk a bit about that like in the sense of what it means for crypto I think it's it's phenomenal news to see how bitcoin performed with that kind of sell side pressure Plus all the liquidation. I think it's an incredibly bullish sign For price to have that kind of visit to 30k I think the reason tesla did this is because if you really look at it on like the long term charts So we're looking all the way back since 2017. I mean throughout this entire period of time This is when tesla proved the world wrong You know, they they got to profit They kept launching new product lines like the side which are things that like again Just kept making people more optimistic with tesla and right up here interestingly enough in january 2021 This is where crypto really started to take off and throughout this period of time Elon really started to divest and focus on other things dogecoin Um tesla buying bitcoin all this stuff and it's incredible to see like the change in momentum here I mean eventually things have got to cool down for sure But you can see that we've been generally neutral here for more than a year now So I think the tesla is selling bitcoin It's de-exposing itself because it wants to prove that it's going back to its business model of innovation and technology That it's not going to focus so much on it. I don't mean to say crypto is frivolous or anything. I love crypto But for tesla, it's not a part of its business model. So I think that's where they're going with it and stuff and They they even made a pretty big loss on a couple hundred million dollars. So probably not an easy decision Well last question we have here and this is going to be a chat question and then we'll wrap this one out Nathan alvarado asked what does nick think of the beto etf that shorts bitcoin? That's a great point Um, so yeah, I think that ironically enough that came out at a time when it's probably one of the worst areas to short bitcoin Just like how the some of the the bitcoin etf came out earlier. I think last year I I honestly think that with the important thing to understand about these are that these are based off futures contracts They're they're like etf like etf derivatives products Etf's built on top of derivatives essentially I would not hold these because over time my understanding is that they're going to have time decay Which is what happens on any kind of derivatives based etf as they have to rotate the contracts Um, it sounds a bit technical, but essentially speaking Even if you are right on the trade and it goes up You are going to make less than you would have just shorting on a derivatives platform Or trading like bitcoin futures So I would say that it's it's a tool if you want to do like a very short term trade Maybe for a day or two But like long term It's very risky because you could be wrong on the trade going short and outside of that as well You're going to have that time decay even if you're on the right side of the trade So like holding it for a year is going to eat up a lot of your gains even if you made the right trade Well, Nicholas this this interview I I've just been so honored to get to talk with you Thank you so much for taking time out of your day to come here on coin telegraphing get this interview If any of you guys are watching this and you're like man, I love Nicholas. How can I go Hear more from him. He's got a youtube channel like we're talking about the intro He's he's one of the big boys in crypto youtube. So go follow him on youtube also on twitter He's got Nicholas underscore mertens right there on twitter. Go follow him there Closing thoughts from you Nicholas before we let you go Oh tim, it's been an honor man to be here. I want to thank you guys for having this great End of chat with you man. I think it's it's been a long time coming I think the the big thing I would say overall like just for too long didn't read if you want to pass it on to a friend I think we've got the summer relief rally. Good chance. We're going up to 27.5 to 30k Bet on the federal reserve pivoting at one point making things easy Justifying the relief rally inequities in crypto and I think sometime in the late fall Winter going to 2023 We're going to have to roll back over to the same pain the feds going to lose control again commodity prices will go up And we've got an extended bear market. I think that's what we've got again could be wrong But that's where I'm placing my cards at the moment or at least what I'm seeing for the time being Gotcha Well, Nicholas, thank you so much everybody else. Thank you for watching this show today Make sure you smash that like button before you go if you love this content Also, subscribe to the channel coin telegraph for you can get more videos just like this With that being said though, we'll see you guys next week. Peace