 Hello everyone and welcome to Markets Talks. I'm Ray, head of Markets at Cointelegraph, and here we're going to discuss what is shaping the markets with valuable insights from industry leaders, traders, and influencers. Today's guest is Ruto Velogen. Ruto is part of a rare breed of traders who provide genuine, no fluff, no shill insights into trading, and it's all from hard-earned experience for him. He has over 60,000 followers on his Twitter and YouTube combined, and he provides regular critical analysis on the crypto markets. How are you, Ruto? Hi, Ray. Good to meet you, buddy. All right, so I guess we should just jump right into it. What's going on in the market? Bitcoin, I believe, yesterday did a nice little move where it moved up to 21,000, and now let's see, where is it? It's gone down to about 20.5K, so I know some people thought that maybe the trend had reversed, maybe the current range had broken, and that we got that long-awaited reversal in price that everyone's been waiting for, but then today's flashing different signals, so what's your take on what's happening today? Well, it's kind of the technical analysis curse day today, because it can go up or it can go down. We're going to have to take it by level. What I can see or say, I don't know if you've got my chart up, but we can bring up a chart or so that we can actually show, but what I can say is, at least we can see there, we've got a chart. Awesome. Okay, so I'm going to just look at this from a big picture, a macro perspective. If we look at Bitcoin on the weekly, this was the play that we were running, the playbook that I was using to get these entries in at the bottom, and why we're looking at getting, so if you want to walk through and I can explain to you guys exactly how I got there, but now to answer the question where we at and what can happen, we're in a critical area, because this is where I would want to hedge an additional short from all these highs, the previous highs, and the reasoning behind it is, what if I'm wrong? As a trader, it doesn't matter whether I call the bottom or call the top or call an entry for that matter. I want to make money. That's the idea. So I tend to come from a narrative that I don't care about my opinion of such. It's the bank balance. So every action I take or every trade I take is to cover my ass, if I could use that word in a sense, to make sure that I'm in the correct move when it happens. So if we were to dive into a, you know, like a daily timeframe to look at where Bitcoin is at, the idea is when we reach top areas of a lateral range, a range where price goes sideways, that's your cue as a trader to be bearish, irrespective of macro trends or what the narrative might be on a, on Twitter or such, that's your cue to take bearish action. And when we're at the bottom, that's your cue to take a bullish action, regardless, which means if you, if your trade fails, you sit in a situation where everybody gets to see you fail that one time, but that's okay because you would have hedged the short somewhere along the line, you will be carrying on the profit to a lower range. Now with that, with that in mind, when we look at these highs and we look at these lows, where would you take profit if you're trading a lateral range? Smack in the middle and that's where we are at the moment. So irrespective of we can look at it as being the early makings of an accumulation pattern forming or where we are with any earlier wave count of such, the reality is, is we're in a space where profit is being taken and when there's profit being taken, the market tends to act irrational. There's not a lot of structure on this because you're going to get a situation where people are going to hit the sell button or get the short button going with acting out of an impulse rather than with a strategy. So from a macro point of view, what's happening with Bitcoin price? Can you describe what the actual range resistance and supports are? And you know, a lot of people don't actually day trade or even swing trade. We're looking for some sort of shift in the dominant trend in order to then enter a position, whether it be long or short. So I'm just curious from like the higher timeframe point of view, what is happening and was yesterday's price movement more of the same or is it some sort of new development that's showing, you know, the emergence of a new trend? Okay, so from a macro point of view, I always like to start any analysis from a macro point of view. So for anybody that is new to this, make sure that when you start zoom out, go on the weekly to get context of where it is and what it is you're experiencing. And if we were to look at it from a macro point of view, obviously the picture looks big. If you take it, you know, if you take the last 10, 20, maybe 25 weeks into account. But as soon as we start bringing in a little bit more data, so I'm switching on all the all time highs. And I just want to bring the perspective in. So if we zoom out and we start bringing in all the old time highs from the previous rallies, you can see that in in relation to where the old time highs were, that the next bottom is quite close to the previous old time high as such. Now we are deviating from that ever so slightly, we have now passed the previous old time high, or we're sitting on top of it and using it as a resistance. Now, just to jump back when we broke through the previous old time high, the narrative at that stage was very strong. Everybody was screaming and calling for it that we need to come back and test it somewhere. And now we are testing it and I find that the interest is obviously gone, which is as a trader and as an investor, we can use to our benefit. But now let's bring in a few more dynamics, because this is not doesn't give you enough information as such. Now we know, but when goes through these halving sessions. So halving one happened, halving two, three, I've marked them out for you guys already on the chart so that we can save time. Now for anybody that is new, basically the reward of Bitcoin being mined, each halving halves. So it becomes more expensive to obtain your Bitcoin should you be mining. And that means that you should get in a supply shock at around a halving that normally creates this this rally in price. So if we go back again, and we look at the first halving big rally, halving happened big rally, halving happened big rally. So if we are looking at that and we look at where the next halving is going to occur, we're sitting it around next year, 2024 in May. So we're quite away or from that halving as such. But now bringing in an additional element to this Ray, and we look at the timing factor, because although it is fine to talk about the next bull market, your question is in the question that I think everybody's asking, when is the bottom or when can we start thinking or planning around this is the bottom. So what I've done over here, and I'm just going to delete these levels, I've looked at a time for now, basically, as we know that everything works in cycles, and that's where the levels came into fruition. So if we look at the previous start of Bitcoin to where the ultimate low was, and to the halving, and we try and find out when that were or when that occurred, we're looking at the 0618 or the golden ratio or the golden zone of time extension. And if I take that and I bring that over onto our first to second halving, to try and find a pattern, I want to see something repeat, because as a trader, we're looking for these repetitive events. If I expand my screen so that we only see halving to halving, you can see that between the two halvings, at around the 618 extension of the cycle, the halving cycle, we end up bottoming out. If we move on to the next cycle from halving 2 to 3, and we bring that same time flip extension over, and I'm just going to adjust it to the halving dates, and I'm going to just make my screen nice and big for you guys. You can see that literally again, once we cross the 618 extension, we start bottoming out. It doesn't mean that we create the ultimate low necessarily, but from an investor point of view, or from a macro point of view, it's a good time to start dollar cost averaging. This is definitely the worst time to start dollar cost averaging, although at that stage, it was a very big trending word. Now, if we look at our current predicament or where we find ourselves, and I bring that over one last time, and I'm putting it between halvings and halvings, we're right at that area. This sparks the question to myself, is this then the area where we should start dollar cost averaging? Now, the trend from a from an investor trading point of view, you treat the trend as your friend, and as if it's going to last forever. On this principle, I'm looking at this and saying to myself, okay, I'm definitely interested in Bitcoin now. Now, if I take this a little bit further, and we talk about these accumulation patterns, which is normally what you would find at the bottom of a range after a big sell-off or after a bear market structure as such, you can see that there's a few specific events that need to occur before we can even start thinking about an accumulation. And this is all the events in the phase A of a structure. So now if I flip back to my weekly, just to give you guys an idea of that, I'm looking at this, I'm drawing a line here, I'm looking at this and this was the narrative for the buy. And the reason why I was looking at the rally is that we have now created our climax. This is where the big selling pressure ran itself out. It got exhausted. And from that point onward, we did have the automatic reaction or the automatic rally in an accumulation, which if we were to put on the volume, you would see that the volume starts dissipating to the top. So it ticks all the boxes. And then subsequently, you want to now come back down and test this, because in theory, you've created a demand zone and this now needs to get tested. And if it holds, that's your secondary test. And that can be seen as a sign of strength. Now what follows? After you have your secondary test, you start moving up and you start creating your upthrust action. And that is where I'm playing out. So the thought is, if I'm wrong, I want to short 2008 or 20,800, excuse me there, short that, because if this theory that I've laid out ends up failing and Bitcoin just drops, I'm in with a nice big juicy short. I'll stop my long out and I'll be happy to ride the wave a little bit lower. But if I'm right, which I want to see, I want to see my short fail, I can expect Bitcoin to start trying to attempt to these automatic, to the automatic levels of 25K, to try and initiate the first higher high, which will then sign the basis of, we might have bottom out, because now finally, the bearish momentum has reached the point where we have done falling. We can expect if we go back down to 17K and even go a little bit lower, but we can start ruling out the possibilities of the eight, the 12, the 10, you know, any of those low ball calls, that's out there. So for this current range, what would you say is the most important resistance and underlying support level price wise? And then is this a scenario where the current price action is simply setting up a bull trap? Well, the most important level would be 20,800, because of the fact that if we look at this rally and if we look at the structure in greater detail, what we will find is any trading range, if we look at the previous year's trading range, I'll use this chart because it's already drawn up there just to save some time. So if we look at the previous ranges or the previous trading, what we will find is if I put my foot on and for anybody that's interested in this, the simplest, the easiest is just to use the half level, the 50%. We'll find that price will revolve around that and ultimately fail at around a 50% level, meaning that there's a change of direction and a change of hand. Now, if we take this and we start looking at where we at at the moment, and we do the same exercise from instead of a yearly range like I have over there, we look at it from the previous yearly range, you can see that we are bouncing on that off level. So at this stage, this is the most important range of support. So if you're looking at around 17,900, 17,900, that would be the major support on the macro time frame to consider. But diving into this on a smaller time frame to try and gauge where we are and where we can hit resistance. If I use the same lateral range and I put the same foot on first range to the bottom of the range, the biggest resistance that we're sitting at now is on this specific chart, 20,900, and on other charts, depending on them between 20,900 and 20,800. And as you can see currently, this is where prices is kind of grinding to a halt. The momentum has reached an apex as such. So this would be the important level that I would want to keep an eye on. Get above it and close convincingly a daily or even a three day daily candle above that level. And we are definitely setting ourselves up for the potential of 25. So moving into next year, what would be your price expectations for quarter one, quarter two, 2023? It's a tough one to call because a lot can happen in the macro environment. We are very reliant on the legacy markets at this stage and they influence the market and the people's perception of the market. The market is an organic being as such and it feeds off emotions and spirits of the time, the Zeissgeist of the time. So if there's some bearish narrative that plays out or some bad news, world bad news event that can impact Bitcoin for the good or for the bad. But if we were to talk price action on this narrative and the reason why I say this is purely because we know that any protection as such needs to be addressed with a time limit and it's based on the information we have now. So as soon as there's any new big world event, you need to go and relook your thesis. But looking at the targets for next year, I think quarter one, we're looking at maybe 25, 29, max and then quarter two, we will probably be going back down to the 17s, even the 16s for that matter. As the accumulation range, the longer we fall between the 20, the high 20s and the high teens, that's going to be the best for Bitcoin eventually because you need a long accumulation. Bitcoin price being stuck in a specific range in order to, when we have a breakout, in order for us to have a good momentum and a good absorption of supply so that price can actually move past the previous ranges. So that would be my best estimate. I will not be comfortable and I will not personally be planning on taking all-time highs and trying to trade 70-80k BTCs next year unless something magically happens. Right. So in previous bull markets, Bitcoin is not always like the first mover. Sometimes it's Litecoin that packs on a 150-200% rally. Sometimes it's Doge. Sometimes it's Ethereum, either in its BTC pair or in a stablecoin pair that starts to move. So what are your thoughts on Ethereum's recent kind of performance post-merge, whether it be in the US DT pair or in the BTC pair and what type of non-technical analysis drivers do you think could be backing Ethereum's kind of recent strength that we've seen? Well, I think, look, my expectation lies with technical analysis as such. So I don't want to overstep any boundaries on the fundamental side of Ethereum, but Ethereum from a technical point of view is and as always will be the biggest leader. Most developers on it, from a fundamental point, it is poised for a big rally. It's got all the necessary tick boxes, ticked. And from a technical point of view, if I can bring up my screen, I can quickly show you guys what we were looking at for Ethereum. And so if we look at Ethereum on the weekly, this was the narrative that we were looking at. So we were shorting yet again the top of the range. And the argument was, if we find a Bitcoin rally that played out like we saw, the basis was that what we will do is we will push back into this range and we could grab a buy back in that lateral range and trade it back to the half level. And that is exactly what we've done. So we took the trade from that perspective. If we turn resistance levels into support, which you can clearly see price was going to get back into this previous range. So if we turn a resistance level into a support, that is the trade setup that we can utilize. So that is the best that I can do. And if we want to have a look at Ethereum to a BTC pairing, what I normally would do is just, I would want to see whether Ethereum perform Bitcoin and or any other asset. So the best chart that I could use for this that I've got currently open would be this one over here. So what I do is if I try and look at where Bitcoin is at at the moment. So I've got the Bitcoin narrative. You can see the upper range sitting over there, the lower range over there. And this is Bitcoin screen. Then to the right top hand side, I've got the total market cap. There's the upper range. And that was the lower range created. And I want to bring your attention to the half levels. And as you can see what happened in the total market cap, this is now Bitcoin and the alt combined. The total actually over performed and actually drove through its half level already. Now the same for the total excluding Bitcoin. It's actually gone and drove through its half level. So it's showing me that if we have a continuation of a rally and Bitcoin starts to move back up to at least the 25 range percentage gain wise, you may be looking at another 15 maybe another 20%. But for Ethereum, the reality is that we might see bigger gains because of that. It's already showing us that there's more upside potential. So Ethereum might go and attack this this the higher level in the old market cap. So to go back to Ethereum for that for that argument, looking at Ethereum on this basis, the argument is, if we do get that prolonged rally, Ethereum can from this level on overshoot and go at least up 35%. And only then will it complete the narrative or the basis that we need for the beginning of an automatic for an accumulation, meaning we had the low volume rally. And now we are creating the supply zone, which will inevitably be the trigger for the bull market, the next bull market, whenever that happens when price breaks this again. And that would be then somewhere at around 2200 or such. So that is the narrative that I have. So I believe that Ethereum can give us a little bit more. And if we were to zoom out just to talk support resistance levels again, what we can find is, if you look at Ethereum in the past, we had a lot of price action and a lot of price, I would I would say a lot of price negotiation at around the 2500 level. So I would not want to see or I would not expect price to accelerate past that level. So any take profits or anything as such for me would be considered to be done below the 2500 Ethereum level. Right. That makes sense. Regarding altcoins, what would you say are the kind of top three altcoins that you're looking at right now or that you're keeping an eye on? Well, I've got a list. I'm pretty biased when it comes to altcoins. I tend to look at the stuff I have rather than the ones that I did. But I've got a list of a few that I think can create headlines in the not so near future if we do get Bitcoin to rally to 25K as such. So the first one will be Cardano. Cardano has been taking a big punishment and it's been accumulating for a hell of a long time. So if we do get that rally, my thoughts for Cardano is that we will be able to looking at where it's at, we probably get a 50% or even a 65% rally at that level meaning that we initiated our lateral range from the 41 cents mark for Cardano. And I believe that if we can get the momentum and we can get above the half level for Cardano, which is still a big ask, it still needs to go above 50 cents. It will open the door and it will create the run that we expect for Cardano to complete the cycle. I can be wrong and obviously if Ethereum decides to and Bitcoin decides to fail on this analysis and start selling off at this specific point where we are now at 20,800, the bias that around this has to be invalidated. So that's the big key for me on Cardano. And then I was looking at Bit funny enough. I've got, when I look at Bit and I look at the way that the markets always move, the markets will always step down. So the previous lows will be the highs on the retrace. The previous lows will be the highs on the retrace. So the previous lows will be the highs on the retrace. So what we did is we haven't yet got that highs. So to bring back the ideal or the narrative, if we do get a good rally, I think a coin like Bit has some good upside potential to at least go back above 80 cents and maybe make this $1 resistance or get close to this $1 resistance. Look, it's looking into the future and hoping. So take it with that same, take it with a pinch of salt as such. Because first, what we need to do is we need to get the Bitcoin. We need to get Bitcoin to start getting above 20,800. And then lastly, I think one that I do like is Dot as well. Polkadot really set the crypto market alight when it launched. And I'm looking at this market and I'm looking at the last rally that we had, and we had a significant push up and we basically engulfed in one daily candle, all this consolidation and this shakeout event that we had. So we've basically gotten above this area. And I'm excited about this because what it means for me is if we go back, test some support level, if I use my 50% on the daily range high, $6, that can be a potential really good buy and then Dot has the same upside potential. Once we get some momentum, these alts normally will have low interest and it can easily with a little bit of money start getting manipulated back up to the range highs, which in that case can give you some good upside potential. Speculatively speaking, but that is the case. So usually when Bitcoin price is constrained and kind of chopping along in a sideways ways range for a long time, altcoins capitalize on that and pack on gains. So do you see that happening across the market right now? Because Bitcoin's been in this range for 137 days, right? So shouldn't we see some altcoins packing on steady gains as traders kind of look to trade altcoin BTC payers or just altcoins in general? Do you see that trend happening thus far? And if not, what are your thoughts on why it might not be happening? Well, to answer your question from a point, I always say if you can trade one asset well, it doesn't quite matter what it is. You've got your best friend named leverage and he can basically sort out any deficit that the moving coin might be short on. So from that point, I tend to stick to trading aggressively Bitcoin for that reason. But if we look at this chart that I've got open here, what I have is I've got Bitcoin to the left hand side. And then I've got the market cap dominance. This is the easiest and the most time effective way that we can do this. Now we can talk each coin to its BTC pairing or into its Ethereum pairing. But the dominance is that, you know, it's like the early warning and the easy tell that we can see what's going to happen probably. So to the left is Bitcoin to the right is the dominant. And if we treat the dominance as if it was a coin, and I'm looking at the range highs, and I'm looking at the range lows, where is it? It's at the bottom end of the range lows. So when the dominance goes up, the markets favoring Bitcoin in the sense that new money is either going to money or the market selling off and money is staying in Bitcoin and fleeing the odds. There's multiple scenarios for the dominance to go up. But that's the narrative. So if the dominance keeps its strength, and I apply my same little 50% magic there, at least what we can expect is that some of these alts, definitely because they have low liquidity and because they oversold and, you know, the holiday investor has basically sold and left the building. So these coins have had an oversupply problem at this stage. I see that there can be some good upside, specifically if Bitcoin starts and continues its reality to the onsite. Bitcoin will be the safer bet, but because there's low liquidity, I can see that some alts and even the microcap alts, their time to shine will come as money moves from markets from market structure or category to market category. Bitcoin moves first, it's done it, big money is there, then everybody makes a little bit of profit, people want to risk the profit, they go to the big caps and then they go to the mid caps. And then if the market keeps on going, you know, the money will find its way to the micro caps and then you will see this insane gain. So it depends. This has to be a slow grind up. I don't want to see this tomorrow. It needs to take at least a few weeks or a month or two to get us there. And that's what we will need to get this dominance up. And hopefully to get the dominance to fail and go back down. I've got my dominance all wrong now. Sorry, man, I've been, it's been a long day looking at this. So looking at the dominance, let's just quickly correct this before anybody, we are sitting right on support. So in order for this to happen, let's just fix this. I apologize, guys. In order for this to happen, we need Bitcoin to have its consistent rally. But then at some stage, we need the dominance to start moving back down. And if the dominance keeps on on this move, your microcap adults will not be moving as so just correct that. Yeah, no, no, that makes perfect sense. So markets have been pretty boring, you know, like predictably to the downside. In your opinion, are boring markets good or bad for traders? Boring markets are easy for traders. So what you normally would find in a boring market is a lower liquidity, which is bad for traders, especially if you want to trade a high leverage position. But because you're going to be range bound, your game plan is going to be simple by the low sell the highs within the range. And you don't think about this moon take profit level. And that's what traders normally like. The thing is, if we have this boring market, these lateral ranging markets, it doesn't really create the excitement for new adoption to occur because most of us enter into the crypto into the crypto space or buy our first crypto with the idea that we're going to be making a fortune and we might be quitting our job next year or next month. And that's the the drawdown. So I would want to see some excitement. And that will inevitably be good for us as well. Right. So basically what I'm picking up from you is possibly it is starting to look like a good time to dollar cost average into Bitcoin. If we see price break from its current range and flip resistance, current resistance on the macro level to support, Ethereum price could possibly see an extended move to 2,500 at which you are thinking about taking profits 2,200. Traders should watch BTC dominance. And if the dominance begins to drop then possibly there's going to be some like up moves from certain altcoins. And that patience is key. Boring markets are good for traders. Yes. And remember Bitcoin is the tide that rises all the ships. So it doesn't mean that your smaller alts won't necessarily go up as well. But you're looking at a coin and if you want to be trading a smaller and you're on a spot, you want to be trading it purely for the reason that it does make you more Bitcoin as well as more money. It seems that I've been there you back, there you back Roy. Yeah, I see you. No, I heard what you said and I totally agree with what you're saying. Was there anything else you wanted to tell the trading world before we sign off? As always just keep hustling. I don't think that there's any underlying truth wisdom that we can say. As a trader, from a trading perspective, we take each level as it is and we try not to form a bias. So we've looked at macro points, we've looked at where we are within the big picture and it does look good. And it looks like we've weathered the storm. But as a trader and he says, just forget that I told you that and we're at a level where there's resistance. Treat the resistance as resistance. Be part of the resistance when we're there and be part of the support when we add support, which means buy the bottoms when you're at the bottom and sell the tops when you're at the top. You only have to be wrong once in each direction to be okay. And then you'll have a trend and then you can trade that. Right, that makes perfect sense. Well, Ruto, it's been a pleasure chatting with you. Audience, thanks for attending. You can find Ruto at the chart artist on Twitter, where he's basically charting and posting all day long. I know he's got a Discord and a YouTube also. Thank you for coming on and we'll see everyone next Thursday.