Bitcoin: The Q4 Dump is Here

0:00 Hey everyone and thanks for jumping back into the cryptoverse. Today we're going to talk about Bitcoin and we're going to be discussing the Q4 dump of the midterm year. If you guys like the content, make sure you subscribe to the channel. Give the video a thumbs up and also check out the sale on into the cryptoverse premium at into the cryptoverse.com. Link is in the description below. In just about 3 weeks, we have the first investing through the cycles conference, ITC conference. Uh we're going to be releasing the agenda later today or tomorrow, more than likely. So, if you've been waiting for the agenda, uh just know that we are about to publish that. We've got a lot of great speakers that are going to be there. Um so, make

0:47 sure you guys check it out. The ticket prices will be going up. Um, I've said November 1st, but I'm going to push it to November 2nd, just so people can actually see the agenda before before we before we do that. Um, but just keep an eye on that if you guys want to check out what the agenda is. We'll be putting it up very very shortly. So, Bitcoin is at around 77,000. And one of the things we've talked about previously, and we've kind of been discussing this for a while, is that if this were a fake out, what you would look for would be for one weekly close below the below 83K and then the second weekly close below 83K. And then after you get two below a prior sort of range

1:32 high, that tends to develop or instill more confidence that that could actually be a fake out to the upside. And one of the things we talked about previously as well was that everything else like in crypto more or less was at its own bull market support band. So if you look at total two, we noticed that like total 2 was at the 21week EMA last week. We noticed that Total 3 was at the 21week EMA last week. And we noticed that Micro Strategy was also at the 21week EMA. We noticed basically throughout the cryptoverse, most things were already testing it, but that Bitcoin was not. And so we speculated dubiously of course

2:20 that Bitcoin would be heading to that 21week EMA uh even 20week SMA in pretty short order just simply because we had already seen essentially everything else do it and not just in crypto. If you look at the S&P the S&P was already at the bull market support band and the NASDAQ was also there. So we've seen this a lot in the past for Bitcoin where like everything else will be at its 20we moving average but then Bitcoin's somehow not and then people then think like oh Bitcoin's holding up relatively well and then in my experience what people say when people start saying Bitcoin's holding up well uh as everything else drops then Bitcoin tends to drop. It it's just kind of one of those things where when when crypto moves it tends to move very quickly whereas everything a lot of other things tend to move a lot

3:05 slower. Now, one of the things that we have talked about a lot this year is the idea of three separate lows to pay attention to. And the first one is the Q1 low around the February time frame. The next one is the summer low. And then the final one would be the Q4 low. And the reason we talked about this was because we've talked about how that's what happens every midterm year. You have your Q1 low, your summer low, and then your Q4 low. You can see that's what happened in 2018. It also happened in 2022 as well. Uh it sort of happened in 2014, but it's not as clean, right? You had a a Q1 low and then the next low ended up being like September. Uh and

3:50 then the final one was actually in January of 2015, but the structure of the market is the right you get these fair like fairly well clearly defined lows, three lows, right? your Q1 low, your summer low, and then your Q4 low. And one of the things that we kind of reiterated recently as well was that every other market or a lot of other markets were already showing this type of structure. For instance, if you were to look at gold, you can see that gold already had its Q1 low, the summer low, and now it's going into the Q4 low. Same idea with silver. your your Q1 low, your summer low, now it's seeking out the Q4 low. You could even look at like the South Korean market uh and see that it's

4:36 done it's did the same thing, right? Your Q1 low, your summer low, now it's trying to find the Q4 low. You could look at at at the Chinese markets, right? Like look at um the HSI, see the same thing. Q1 summer low, Q4 low, like trying to trying to form the Q4 low now. So that that is like we've seen the structure over over many many different things and and so it's interesting because it's kind of playing out like prior midterm years. And you know, one of the things that is is so difficult and is is causing a lot of uncertainty is how basically there's this massive disagreement between conventional

5:22 technical analysis and s sort of some of the macro views, right? And that I think is what's causing people a lot of angst because there's so many conflicting signals. And we've talked about this before, right? like looking at the relative strength index, the MACD, um just looking at like golden crosses and and and technically a higher high. All of that historically for the most part with few exceptions has been more bullish and and that's what's you know sort of leading to these conflicting views. But then if you look at some of the macro takes and I'm and I don't just mean like you know yields going up and then yields going down and energy going up and oil going up. I don't just mean that, but I mean like look at how

6:08 Bitcoin has behaved with respect to monetary policy. And one of those ways is by looking at interest rates. And if you look at what Bitcoin has done on average after a rate hike in September of a midterm year, you have two prior results, right? You have the blue line which is the 2018 September rate hike, what Bitcoin did after the September rate hike in 2018. And then this sort of this orangish red line which is what Bitcoin did after the rate hike in September of 2022. And then the orange one here is what it did after the September rate hike in 2026. And what you'll notice is that in all of these cases, Bitcoin basically held up relatively well for the first like month

6:53 and a half or so before it actually started to drop. And I actually mentioned this back back in um in September when I was talking about how I was wrong about Bitcoin taking out the May high. And I remember, you know, sort of going through this with you guys and saying, "Look, what I missed back then was not not recognizing that there's often a lag um with with sort of the rate hike and then when Bitcoin tends to get the final drop into Q4, but you can see that we are now sort of approaching the window where that final drop tends to occur, right?" And so I I think that it's prudent to sort of recognize that that is what's happening, right? Or at least that's what it looks like is

7:39 what's happening right now is that Bitcoin is, you know, it sort of held on for about a month and a half like it normally does after a rate hike and then now it's starting to show some signs of of a struggle. You can also look at what Bitcoin has done after after a rate hike. That's the first hike of a rate hiking cycle. And if you look at that and you look at the two prior outcomes, you have the blue line and then the other sort of reddish line. The blue line, the low was already in for Bitcoin, but it did drop 20% from where the rate hike occurred. And then in that was in 2020 uh 2015. And then the other one that occurred in March 2022, the low was not in, right? And we we went lower.

8:24 The other thing that I I wanted to sort of reiterate and we we talked a little bit about yesterday, we added a new chart. Um, and that's basically Bitcoin price action 30 days before the SpaceX IPO and then 30 days after compared to Bitcoin 30 days before the anthropic IPO. Now, we don't know exactly when the anthropic IPO is. I'm guessing it's going to be around they they've said they're targeting the week of September 16th through the 20th. I'm going to guess maybe November 19th. And if you do that, it sort of lines up right with with what Bitcoin did um in sort of leading into the into the SpaceX IPO or yeah, into the SpaceX IPO. It's kind of doing the same thing where it starts to drop. So, there's always a narrative for everything, right? I mean, whether it's,

9:10 you know, an exchange getting hacked, uh, whatever, but there there's always narrative follows price, right? Is is what really happens. And there's always a reason that we can find for why these things occur. And in 2022 it was FTX, right? And I'm sure in a few years we'll be like, "Oh, well, this one was caused by, you know, the the hacks that are occurring today." But I do think it's relevant to remind ourselves that this is also what has historically happened and it's not like it's that crazy of an outcome. Um, because this is what always happens, right? Right. And I that's what I I want to stress is that it's like every we always want to assume that this time is different. And then what if it's

9:56 not? Right? So then the question is is like well what does Bitcoin actually do here? If it follows the FTX collapse, it would not even put in a new low, right? It it wouldn't it would it would still be a sort of like a a higher low off of, you know, the low 60s or something. Uh could be a possibility. But I I think the thing is is like you have a couple of ways to think about it. One of the ways is the silver comparison that I made previously. If Bitcoin were to just simply come back down, you know, down here and then bounce back up, it might make it so that the 20, you know, whatever bull market we get, we get in 2027 would

10:42 be more muted. doesn't mean you can't have one. Uh but it just might not give you as good of returns. If Bitcoin were to go lower, then I I think you could have a more impressive bull market following that. It all just kind of depends. I mean, like I remember after the 2018 drop, one thing to consider about the 2018 drop is that the low that occurred in February, we didn't really durably take out that low until after the midterms, right? until until about mid November. So like I always remind myself of that because I remember how brutal 2018 was where you you had all these rallies and then that that sort of built off of the February low but then by November uh the market gave

11:30 it all back and more and and then eventually it went down. So there's a lot of different like metrics to look at there. There's the macro view, which leans bearish. There's the TA view, which leans more bullish. Obviously, I'm more in the in the bearish camp because of because I've I've just seen the structure so many happen so many times and it always happens in like a slightly different way. Um, but it it still seems to happen. uh nevertheless so in terms of time though you know there's two ways in which I think that the dump ends right and I'll talk about those two two separate ways the first way would be the

12:15 rip the band-aid off sort of view where we just drop and then it's over before anyone can blink right Bitcoin does do that sometimes and I I think like it's a tail risk It's not like this has to happen, but sometimes tail risks do become reality. So what I mean by that is in 2022 FTX collapsed, right? The drop occurred basically over two days. Bitcoin dropped about 24% over only two days. Now it's October 30th, right? The drop started yesterday on the 29th. Is there an outcome where Bitcoin just

13:02 collapses into late October and then somehow we end up forming an October low after everyone gave up on it? It is a possibility. And I I've mentioned before as well like in 2015, you know, there are times when you have a fake out above a prior high like in 2015, you get below it and then look at how quickly this dump occurred. You see this this drop here? This was a nearly a 40% drop in one day. Now, what's different though is back then when Bitcoin came down to the 21week EMA, it found support on it for

13:50 about a week and then formed the low, right? You see that for about one week. It dropped, rallied, and then dropped again. And if you go back to this chart, that would kind of line up with uh Bitcoin going into the anthropic IPO. What if it repeats what it did in the SpaceX IPO where it kind of drops maybe gets a bounce off the bull market support band, you know, perhaps like over the weekend into early next week and then after the midterms you get the final drop, right? And and then that ends up being sort of the four-year cycle low and and that would actually line up with 2015 as well, right? You drop into the 21week EMA, you bounce, and then you drop and then you build off of that low hopefully going into the 2027 bull market.

14:38 In 2020, we had a pandemic, right? And you know, in that case, what happened is we still went down to the bull market support band, bounced, and then we got the final drop. So, you have a couple of examples where you kind of have like a rally like if you look at it, especially on like a like like this without looking at the wicks, you'll see how in 2020, Bitcoin took out this high. if you if you ignore the wicks and then once it gave it back, it immediately dropped to the bull market support band, bounced, and then the final drop occurred. Right? So 2020 and then 2015 look very similar in that regard, right? Because you're you're essentially taking out a prior high, ignoring the wicks, dropping to the bull

15:24 market band, bouncing, and then getting the final drop. Now remember, Bitcoin's historic lows have tended to occur after the midterms, right? So if you if you look at when they've always occurred, like the final drop has always occurred after the midterms. Here's November of 2014 um and then November of 2018 and then November of 2022. So all of Bitcoin's prior lows have occurred after the midterms. And you can see that pretty clearly that that's when they've occurred with the FTX drop as I mentioned, right? With the FTX drop, what you'll notice if we zoom back into it, and I I I sort of already said this, but

16:11 it was just straight down, but we were also below the bull market support band already. So that's why it's it's the the the two main ways that I see that this finalizes. Option one, right? Option one is we just like drop because of this idiosyncratic stuff that's happening in the cryptoverse that's kind of spooking people, which by the way is somewhat par for the course in Q4 of a midterm year. We either do that and then we we bottom just before the midterms and and then you know and then everyone waiting for the low after the midterms ends up regretting it. But in order for that to be the base case, I think Bitcoin would have to give up the bull market support band almost immediately and not find support at it,

16:57 which there's going to there's likely some buyers at the bull market support band because, you know, they've they want to they want to get in. And why not, right? I mean, normally DCA is the way to go in the midterm year. And that way you don't get chopped up as much, right? You're not like you're not buying at the highs and selling at the lows. You're not a breakout trader waiting for, you know, things to go in a certain direction and then you and that that's why that's why some, you know, bare markets can be so hard because sometimes you'll break in the in the direction and sort of convince everyone that you're heading in that direction and then you don't. You know how Bitcoin topped on apathy? One of the hallmarks of apathetic tops is that when when apathetic tops occur and then you go

17:42 into a bare market, those types of bare markets are more prone to fake outs than in than in bare markets that have followed euphoric tops. The reason they're more prone to fake outs is because without a euphoric top, you don't have all of the same constituents, like retail constituents there to put all this this massive sell pressure on the price of Bitcoin. So, when you have a lot of people that sort of FOMO in at a top like in 2017 and 2021, they become selling pressure for the next year. But when you don't have something like that, when it's a more of an apathetic top, you're more prone to having fake outs in either direction, right? You're more

18:28 prone to fake outs. The reason arguably is because you just you don't have the sell pressure to get Bitcoin as low as it needs to go in order to flush really everyone out. So, it can lead to fake outs along the way. A lot of people don't like it when I communicate these things like these things, but I would encourage you if you don't believe me, just go look it up, right? Look, go to Google or go to your favorite chatbot and look it up and you'll see that it's true, right? And and you can even you can even ask it for examples of apathetic tops that have occurred that then led to multiple fake outs in either direction and you'll see that it's happened a million times. I think the reason why

19:13 in crypto it's hard for people to accept that is because it's not a very common thing. But just because it's not common doesn't mean it never happens. It it still does sometimes happen. And apathetic tops, while they can lead to shallower draw downs and sometimes shorter bare markets like in 2019, they can also lead to bare markets that are more prone to fake outs because, you know, you you sort of get the the signals to fire that normally do, but then what happens is is we never actually experienced fully the timebased capitulation and then we end up experiencing it when people kind of like least expect it. So, this is the way I think the year is going to go is is we're going to look back on this year and we're going to

19:58 very clearly observe that Bitcoin had a February low. We're going to very clearly observe that it had a summer low. And then we're going to clearly observe that it had a Q4 low. Okay, that is my guess. And and then we're going to look back and be like, all right, well, once again, everyone tried to over complicate it, but yet it still ended up happening anyways. So those are my views in terms of you know other valuations. I mean I I I think that you can look at Bitcoin valued against other things and you know I I think that's really relevant. But if you guys remember what is the one thing I said that would likely coincide with a Bitcoin drop in Q4. It would be equities dropping. Right? When equities roll over

20:45 in Q4 of the midterm year, that tends to correspond to Bitcoin dropping. Right now, you could say that this is all because of the hack, but the reality is that Bitcoin was already putting in lower highs for for nearly a month, lower highs and lower lows. So, it it's not like the trend just started. And we also said that after you get two weeks below 83K, that's when the the sort of the larger drop tends to occur. So, it's not like what's happening is completely out of line with what we've seen happen in the past. There's always a narrative, right? There is always a narrative for every single move, but it doesn't necessarily stop the move from happening anyways. And by the way, I mean, if you think about it, from July to September, there

21:32 was no shortage of bad news, right? Right? I mean, oil was going up, uh, yields were going up. It's not like there was a shortage of bad news. It's just the market didn't care. So, we have to remember when markets are going up, they just simply don't care about bad news. And when markets are going down, they just simply don't always care about good news. Markets lead and then narrative follows. This is how it it tends to work. Okay. Um, so if you look at the ROI of Bitcoin as measured from the low and you go out to the next low, you can see that uh let's see here. Yeah, you can see that we're kind of in

22:18 the time frame where Bitcoin historically does find a low, right? Like within, you know, fairly short order. That's why I don't think it makes sense to get complacent. If this follows the 2015 blueprint, the 2020 blueprint, the 2022 blueprint, it can all happen very very quickly before before you even have like a great chance to react. And so that's why I think people need to be not so complacent about about things like and and that doesn't mean you need to go panic sell. I mean, what I'm saying is like look for opportunities, look for ways to um, you know, improve your your positioning, your portfolio. Look for that. And not just in Bitcoin, but in in in in a lot of different markets. And I

23:04 I think that you'll be happy that you did, right, as we get out, you know, maybe into early 2027. So if you look at Bitcoin as measured from the peak and you look at it uh like what is the ROI after the peak? Let me see if I can find it here. Right here. So, if you look at the ROI from the peak and then you go peak to peak, the one that looks the most similar as of right now is the 2014 2015 bare market uh in the sense of timing because we're currently on day 389 and then that one bottomed on day 406, right? So, the timing is there. If you look at the

23:51 year-to- date ROI of Bitcoin in 2026 and compare it to the average of prime midterm years, uh well, this one's now including 2010 because we got some more data. Let's go look at at just the average of um 2014, 2018, 2022, and we'll we'll add on one standard deviation to that. So in this case, you can see that in this midterm year, Bitcoin has held up a lot better than it has in prior midterm years, but also in the summer, right, in or in May, you can see it was kind of above and then it actually sort of mean reverted. So just keep an eye on this these things because the markets always have a way of sort of tricking people.

24:39 And then if you look at the ROI of Bitcoin after the having and then you go out to the next having, you can see that we're kind of in the bottoming window, right? like this is this is the bottoming window uh where Bitcoin tends to sort of find lows and then tries to build off of those lows. So I feel like history is repeating itself. I really do. Um but anyways, those are my views and I I know it's difficult out there. I'm not trying to minimize that. I hope that people kind of look back at 2026 and realize that the name of the game in midterm years is to often try to just preserve what you have. Doesn't mean you can't buy things or like I've I've invested this year. Uh but it just means like save something for, you know, for

25:26 the end of the year just in case these bad outcomes occur. It's not a guarantee that they will uh but just save it in case they do. And I think it works out, right? I think it works out more often than not. and and perhaps this time is is not different from what we've uh previously seen. If you guys like the content, make sure you subscribe, give the video a thumbs up, check out the sale on ITC Premium at into the cryptoverse.com, and also be sure to get your ticket to the upcoming ITC conference. As I said, we're going to be releasing the agenda probably within the next 24 hours or so. So, I I look forward to releasing that and then I think it's going to be a great conference. And, you know, from a timing perspective, I feel like the conference is coming at a perfect time, right? like a perfect time, late November of a

26:11 midterm year. Hopefully can regroup, talk about the markets, and talk about what we see happening in 2027. Thank you guys for being here. Subscribe, give the video a thumbs up. I'll see you guys next time. Bye.