Bitcoin: The Beauty of Mathematics (Part 36)

Hey everyone and thanks for jumping back Into the cryptoverse Today we're going to talk about Bitcoin The beauty of mathematics part 36. if You guys like the content make sure you Subscribe to the channel give the video A thumbs up and also check out into the Cryptographers premium at into the Cryptiverse.com let's go ahead and jump In so we generally provide these updates On the first of every month sometimes it Comes a little bit later on the second But the whole idea Is to understand where the assessment is Of the entire asset class as a whole on A monthly basis with respect to the fair Value logarithmic regression trend line Which as we know and as we've said Before is a monotonically increasing Function now the whole idea behind a Monotonically increasing function is the Idea that it only goes on right that's The idea is it dubious it is but that's Sort of what we do around here While the fair value of the asset class Based on say adoption through time would Be seen in my opinion to more or less Only go up That doesn't mean that the asset class Actual market capitalization only goes Up and in fact there is an ebb and flow To the cryptocurrency asset class from Being overvalued and then being Undervalued and we sort of just go back

And forth from one market cycle to Another you can see we went from Undervalued in 2010 to then being Overvalued in 2011 and being undervalued Again in 2012 overvalued in 2013 Undervalued in 2015 2016 and then being Overvalued in 2017 and even for a large Part of 2018 until we got to that final Capitulation and then 2019 we saw Ourselves get back above the fair value For a very brief period of time in mid 2019 Although it was relatively short-lived As we then faded the rest of the pre Having year and then ultimately rallied Into the red trend line again one last Time until we got the recession after we Had the uninversion of the yield curve Last cycle this time around you can see That we got back into the overvaluation Territory however we were unable to Actually go all the way back up to the Top trend line arguably do somewhat in Part to the macro headwinds that faced Us and and also the quick unraveling of Of more traditional markets right in the S P 500 Now the interesting thing that we always Have to remind ourselves of is that During periods of undervaluation it Always has historically been a good time To DCA into the market right when it's Overvalued the idea is that you DCA out Of the market that's the general idea

Right and it it's always been that Simple you know you can go back 30 this is what part 36 look at the last 35 videos on it right that's what we've Always said is that you try to DCA out Based on historical data when it's Overvalued and DCA in when it's Undervalued Now there's a couple caveats to this That I think we should talk about one of Which is that when we go into over Evaluation territory it doesn't mean That you know it would Merit just Selling everything because it's Technically overvalued you can see that We can spend years In this over evaluation territory years So if if you were to come in in say you Know December 2020 And said all right well we're overvalued That means that means it's time to sell You would have basically just missed out On this overvaluation period that Occurred for the next you know couple of Years or so and so in the same way when You become undervalued it doesn't mean That you need to immediately bet the Family farm right because history also Shows us that we can be undervalued for Relatively long periods of time Now I've argued many times that the Prehabbing year for Bitcoin is a half up And half down year right where you wreck

Both sides that is the general thesis Right we've talked about it many times The whole idea is Bitcoin spends about Half of its prehabbing year going up and About half of its prehabbing year going Down now so far we've had four green Months and one red month which would Lead me to believe that likely I would Say four or five of the next seven Months are likely going to be read but That doesn't mean you can't have Two or three more months potentially uh Of green at some point right you could You could see that and that's what we Historically have seen we we typically See about six green months and six red Months or plus or minus one I mean we Don't really have a whole lot of data to Compare it to Um but at least in the pre-halving years That is what we've seen in the bear Market years of 2014 2018 and 2022 we More or less had eight or nine red Months both in 2018 and in 2014 and then Again we also had about the same in 2022 So I'm just going off the historical Data that we have that suggests that During the pre-halving year you spend About half the time going up and half The time going down and because of this It leads to a relatively sideways Market Okay now when you're living through it It often doesn't feel like that right it Can feel very bullish at times it can

Feel very bearish at times if you were To look at 2015 you probably would look At this and say well it just went Sideways right you might say oh easy Year easy year to navigate the market The market just went sideways but that's Not necessarily a fair assessment to the People who were living through it You know I remember 2015 And Bitcoin rallied about 80 percent From the low I don't know exactly what The total market cap rallied but I mean It was still a fairly substantial rally But again Bitcoin rallied 80 percent off The low most people today would say well At 80 Rally or even 100 rally should not Be characterized as sideways but I Imagine we also would have no problem Looking back at 2015 and characterizing It as sideways right In the same way you can see that the Asset class fell below the fair value Logarithmic aggression trend line back In the summer of 22. That did not Mark the low of that year I know a lot of people were hopeful that June was the bottom and you know we were Quite adamant that we would go lower at The end of the year this is what we said Many many times that we would likely go Lower at the end of the year and and That that could be the bottom right it Doesn't necessarily have to be but it Could be and one of the things that I

Think we have to consider is that in Both cases in the last two cycles the Real move to the upside that actually Took us to new highs did not occur until We tagged the lower green logarithmic Regression trend line okay you can see That it happened in March of 2020 and it Also happened in in Q3 of 2015. Now with that said one of the things That you've probably heard me say quite Frequently is that I would expect one More scare in Bitcoin sometime in either The second half of the year or in the Early part of 2024 if we're going to Continue to repeat this very cyclical Behavior now I know some people are more Of a proponent of of sort of Shifting The Cycles around in terms of of of Where they Peak and whatnot and hey I Think it's important to consider all Possibilities okay so we should consider All possibilities at all times markets Show us time and time again as to why we Should continue to do that but at the End of the day you know we had a Peak at The end of 2013 the Peak at the end of 2017 and then one at the end of 2021 we Then had it followed up by a bear Market Year and then typically following the Bear Market years you can see that the Market just tends to go sideways until We hit the fair value or the the lower Regression trend line okay okay Now in 2015 we did not go back to the

Fair value logarithmic regression trend Line okay we did not in 2019 we did so There's a there's a difference here you Know in one of these Cycles it was Relatively dull and Bitcoin only rallied You know not even 2x off it's low but in 2019 Bitcoin rallied 4X off its low and We saw a much larger move to the upside In both cases The ice the asset class eventually came Back down and tagged the lower Regression trend line in both cases okay The only difference is one of them it Was mostly just sideways until we went Into it and the other one We rallied We faded the second half of the Prehabbing year and then we rallied into The recession only to come back down and And get relatively close I mean it's not An exact touch right here but we got Relatively close to the lower regression Trend line okay So when we think about this we actually Think about well what are the Similarities between now and the last Two cycles arguably I would say at least So far once we fell below this fair Value regression trend line back in June This cycle so far looks more similar to 2015 does it not right you can see that The ass the fair value or sorry the Actual market capitalization with Respect to the fair value

Has has been sort of slowly going away From it now you might say well then this Doesn't make any sense Um why would we have been getting Further away from it over here when we Know that the asset class was was going Up slightly it did go put in a double Bottom in August of 2015 but remember The fair value is a monotonically Increasing function so again as the Asset class matures and as we have more Adoption we expect the fair value of the Asset class to go up right that is the General expectation it's just that if The asset class actual market Capitalization does not keep Pace with That fair value then it means the asset Class as a whole is becoming Increasingly undervalued okay think About it like this we got closer to the Lower regression trend line in March 2020 than we did in December 2018. However in December of 2018 we Technically saw a lower market Capitalization for the entire asset Class than we did in 2020 but the reason Why we were more undervalued in 2020 And arguably a a an important part of us Seeing a major rally into the Overvaluation territory Is because The fair value was so much higher in Late 2018 the fair value when we hit This low was approximately 154 billion

And the total market cap was at 100 Billion over here the market cap was at About 160 billion by March of 2020 but If you actually look at the Wix we Actually did go much further down on if You look at if you look at total market Cap okay we actually did go quite a bit Further down and and why don't we just Go take a a very quick look at it rather Than uh trusting what I'm saying let's Go let's go take a look at just how far Down It went you can see that it came to Within about 15 percent or so of the Prior low right about 15 and you can see That it went back down to about 108 Billion uh and on here you can see it Was around just below 100 billion so There certainly was a higher low put in Place but because the fair value had Gone up to 355 billion compared to where It was back over here which was only 154 Billion we were technically more Undervalued okay and that is ultimately What you know I think what we're trying To convey is that the fair value of the Asset class goes up no matter what right Because I mean again like not everyone's Going to believe that because you either Believe the crypto narrative or you Don't and if you don't then you're not Going to believe that and if you do then You probably do believe that right But even if you believe that which I do

I believe that the asset classes fair Value does increase monotonically as a Function of time even if you believe That it doesn't mean that we can't go Through periods of undervaluation just Like we're in right now and again right Now the asset class is coming in Undervalued to the tune of about 45.53 Now I've said many times that I would Expect us to hit this lower regression Trend line before we get a sustained Move into the overvaluation regime I have seen plenty of comments and not Not I mean useful comments saying well Since we didn't go to the top over here Do we have to go to the bottom over here I will remind you right in financial Markets nothing has to happen right I Mean you know we could go back out Without going all the way back down we Could go below the lower regression Trend line right I mean there's there's All sorts of things that could happen so Please be aware that there is always a Path for any type of scenario As long as this I mean you know as long As it's somewhat realistic right Um we're not going to sit here and say That it's going to go you know 10x or Something in a short time but there's Always a a reason to at least entertain Various outlooks okay and all I'm trying To do is say look I've lived through you

Know these Cycles more than you know More than once right if just a few times At this point and normally what happens Is that the market gets somewhat boring Until really either the end of the Prehabbing year or the beginning of the Having year that's what normally happens Okay So with that in mind one thing to Consider is that in 2015 right in 2015 And 2016 what was going on with the s p That allowed crypto to come all the way Back down to the prior low and then what Was going on in 2020 that allowed crypto To more or less come down to the prior Low some cryptocurrencies put in a new Low some cryptocurrencies did not for Instance the blue chips like Bitcoin and Ethereum did not put in a new low but a Lot of the other a lot of the altcoin Market did put on a new low So what was going on in in in that Scenario to to sort of really justify The um the the crypto asset class sort Of going back down well we know what Happened in 2020 I mean you know you'd Have to be living under a rock to not Understand what happened in 2020 we had A massive capitulation By most financial markets and Cryptocurrency went back down right we Went back down and and sort of retested The prior low Maybe a slightly higher low for some

Assets a slightly lower low for others But we went back down but what else did It correspond to it corresponded to a Recession that recession did not occur Until early 2020. so if we were to Repeat this same type of behavior If you remember we had an inverted yield Curve in 2019. Okay so we had an inverted yield curve In 2019 it didn't stop the s p from Climbing the wall of worry for a long Time but we still ended up getting that Recession after the uninversion of the Yield curve now in 2015 what happened Right you can see that the s p fell off A cliff here in August but we did not Have a recession right it was just a a Correction we came close to a recession During this time period in 2015 and 2016 We came relatively close to a recession But it did not actually materialize and So in both scenarios you had a scare in The S P 500 which ultimately led to Crypto getting sold off once again in Both cases It happened before the having right so You had a major sell-off and a retest of The prior lows in Bitcoin and the total Market cap Approximately both in 2015 and in 2020. In 2019 we had an inverted yield curve In 2015 we did not okay so if we go take A look at the yield curve and let's just Look at treasury yield spreads on the

Three months of the ten year you will Again remember that we did not have an Inverted yield curve in 2015 but it did Not stop people from worrying about a Recession and we ultimately were able to Avoid it in 2019 we had an inverted Yield curve and when it uninverted we Were not able to avoid a recession right Now we also have an inverted yield curve And at some point we will have the Uninversion of this yield curve and it's Upon the uninversion that you have to Deal with the possibility of a recession And this is I think where a lot of People have can kind of get Disenfranchised with the idea of even Talking about recessions and I you know We've seen this for the last 18 months People constantly say that we're in a Recession but to say that is completely Ignoring the this the strength of the Labor market okay But if we think about the context of History We need to understand why would we go Into a recession right what would cause Or sorry what would cause the yield Curve to uninvert The yield curve is only going to really Uninvert If the Fed changes their Monetary policy right if they go back to To being a lot more dovish but that's Likely not going to happen as long as The labor market remains tight so as

Long as the labor market remains this Tight it is possible for risk assets Especially equities to climb the wall of Worry that's exactly what happened in 2019 we had an inverted yield curve and Then it and then it uninverted and Equities just climbed the wall of worry Eventually we got the recession okay so Again today you're seeing a very similar Thing happen right we have an inverted Yield curve the the s p just continues To climb the wall of worry and until you See the labor market start to Deteriorate then That is the expectation right it's Called climbing the wall of worry right There's one thing after another to worry About Whether it's the TGA the student loan Repayment the debt ceiling the the the You know the regional banking crisis That we had in March there's always Going to be something to worry about we Need to recognize that there's always Going to be something to worry about but As I've said before Until you see I've said really one of Two things it's either the Re-acceleration of inflation which I Don't really see happening right now I Mean I'm not it core core pce has been Sticky uh but headline's been coming Down or you see the deterioration of the Labor market the markets can climb the

Wall of War now there are other things That could cause major Corrections you Could have geopolitical events Um there are other things but those are The two main things that I think we you Know we need to consider is just Inflation if it re-accelerates and the Labor market and probably the labor Market is is much more important than Than inflation in terms of trying to Understand what the s p is likely doing From a a risk-off risk on point of view So going back you know just going back To the to the total market cap again the Idea is scaling in when the asset class Is undervalued and scaling out when the Asset class is overvalued now you Probably sitting there thinking well Hold on a minute Ben you've been saying For a long time that the altcoin market Is too risky and I Still agree with that not necessarily in Terms of the idea that they won't go Back up if you hold them and you know if You hold them for the next two or three Years but more so I find them risky in In from the sense that they are likely To bleed against Bitcoin okay One thing to remember as I've said is That Bitcoin could put in a double Bottom it could put in a higher low and Still the altcoin market could put in New lows If Bitcoin were to put in a new low

Itself then where does that leave the Altcoin market so again that's why I Continue to say the altcoin market in my Opinion again not Financial advice right But the altcoin market in my opinion is Too risky because they're bleeding Against Bitcoin it's always what are They doing with respect to bitcoin their USD valuations are largely irrelevant to Me And I know that sounds weird you know to A lot of people because that's all they Ever care about is their USD valuations But again if Bitcoin goes up a hundred Percent like it has in 2023 And the altcoin market is only uh half That Let's go take a look right Total three How far up is the altcoin market this Year 22 right now 22 where is Bitcoin how far Is Bitcoin up From the lows 75 so again that's why I Say the altcoin market is too risky is That they're generally bleeding back to Bitcoin and this is the phase where that Happens where the altcoin market just Gets chopped off and people slowly watch The Satoshi evaluation of their Portfolio deteriorate because they keep Yoloing into the altcoin market but the Altcoin market liquidity keeps bleeding Back to bitcoin it's that liquidity that

Bleeds back to bitcoin that eventually Theoretically sometime after the having Can provide fuel to ultimately go up but In the same way as liquidity from the Altcoin market goes back to bitcoin At some point we reach a level where There's not sufficient liquidity in the Alt Queen Market to keep Bitcoin Elevated and then we get that final Scare whether it's the end of this you Know sometime the second half of this Year early next year it's hard for me to Say and I mean again nothing's a Guarantee but that's what we saw two Cycles ago we had that final move back To the downside where a lot of all coins Put in new lows Bitcoin just put on a Double bottom Um this time or last cycle we had a Higher Low by Bitcoin but a lot of all Coins put in new lows and again this Occurred about you know 14 15 months After this low You know this was December 2018 and this Didn't really happen until March of 2020. so if you were to have a similar Timeline on this cycle this was November So it could still be as late as February Of 2022 and still fall in line with a General idea of of the cyclical behavior Of crypto and normally it's that Secondary scare that gets people to Really you know Lose faith in the entire cryptocurrency

Market as a whole just before you get a Real sustained expansion into the Overvaluation territory okay again this Is just what we have historically seen Okay I can't really comment on every Possible outcome of course there are Potential outcomes that differ than Specifically what I'm saying but in General the altcoin market bleeds back To bitcoin for the most part during this Phase of the cycle at some point there's Not sufficient liquidity in the altcoin Market to support a sustained rally Anymore by Bitcoin it then falls back in Crushes the altcoin market we hit the Lower regression trend line and then we Go back up into a phase of expansion That sends us back into the Overvaluation territory if history is an Indication the sustain moved to Overvaluation territory is likely not Going to happen until 2024 or 2025. Last cycle it occurred in you know Basically late 2020 early 2021 the cycle Before that it occurred in about Mid-2017 the cycle before that it Occurred in early 2013. so I really Wouldn't expect sustained levels of Overvaluation until late 2024 or early 2025 at the earliest it doesn't mean That you can't have a 2019 like rally Where you go slightly above it but I it Wasn't a sustained move and so even if That were to happen this time I don't

Really think it would be a sustained Move until we until we really work out Uh the you know sort of the the yield Curve issues that we have to deal with Which is the same thing we had to deal With last cycle as well I mean we had The inverted yield curve last cycle Um and and you know the market climbed The wall of where I ate And then and then the market faded back In we rallied into the recession And then we capitulated And even though we capitulated as late As early 2020 we still rallied 20x or More over the next year so that is is Kind of like my my Baseline assumption Is that the pre having year you get These types of sideways markets where You kind of spend half the year going up And half the year going down Right half the year up and then half the Year down you eventually get your final Scare whether it was in the early part Of the having year like last cycle or Whether it was in the latter half of the Prehabbing year like the cycle before It's hard to know exactly when it Happens not that it has to happen but That is is what we've generally seen now The other way that we measure this is we Take the percent difference between the Market cap On the fair value regression trend line And if you do that you get somebody that

Looks like this and what you'll notice Is that with the exception of 2012 we Tend to reach undervaluation territory Lower than where we currently are I mean you can see that this was you Know 60 65 percent under value depending On on which one you look at right now We're about 45 undervalued now this does Not we don't have to have price go lower Per se for us to become more undervalued Remember if we were to just go sideways Into the regression trend line we would Become more undervalued right like in 2015 we were going sideways with up and Down I mean there were periods Definitely where it went down especially In like you know July and August of 2015 And you can see this sort of fell off The cliff now we we sort of bottomed at A very similar level as we did over here And we rallied for you know half the Year so but ultimately we came back in And we hit that deep undervaluation Territory corresponding to the lower Part of the regression trend line right You can see that happened back over here In in 2015 and we didn't really kind of Come out of this mess until the latter Part of the pre having year Right now this looks very similar to me Right to me 2023 looks more similar to 2015 than it Does to to this cycle however I think we Should say that there's probably a

Little bit of you know there's probably Elements of both it's not really Identical to either one there are some Similarities between 2019 and today There's also some similarities between 2015 and today and so that's something That I think we have to try to reconcile As well and if you're not familiar with What I'm talking about just go take a Look at the year-to-date Roi And just hide everything and just look At the pre having years you have 2015 2019 and 2023 and I mean you can see That 2023 so far has been a somewhat Tempered version of 2019 now that we've Gone below it but it's also been a more Impressive version of 2015. and the way That I think we could look at this more Compelling in a more compelling way is To average out 2015 and 2019 and when You do that You get something that looks like this So this is 2023 and then this orange Line is an average of 2015 and 2019. It's because of this average that I Stated many many times that the range of Price action for Bitcoin in 2023 my best Guess again I I can't know the future And and there's a good chance we go Outside of these bounds but my best Guess for Price action in 2023 is for Bitcoin to stay above twelve thousand Dollars but no higher than approximately Thirty five thousand dollars now the

Reason I came to those numbers Is if you take an average of 2015 and 2019 we went as low as 25 below the Yearly open and we went as high as 2.1 x Above the yearly open That would mean if you were to look at At where the yearly open was for Bitcoin If you're to go look at at say these 12 Month candles and and just figure out Where the yearly open was it was at 16 5 30. so if you have a you know a 25 move Below the yearly open that gets you to 12 000. if you have a 2.1 x above the Early open that gets you to around 34 35 000. okay so that is one of the reasons Why I've said I I think price action Will fall between twelve thousand Dollars and thirty five thousand dollars Within the year of 2023. now I know a Lot of you are thinking they're like Well what's been smoking to think that That's helpful right I mean who cares if It's such a wide range that's why you're Here is it not you're here because of That volatility if it were not for that Volatility I imagine many of you Wouldn't even be watching this video Again if you go look at modern portfolio Theory expected annual returns from a Portfolio consisting of Bitcoin and Ethereum suggests that our expected Annual return is somewhere around 65 Percent or so plus or minus 75 meaning Yeah like there can be years where you

See 100 200 returns or more sometimes Much more but there's also years that You can go down 80 percent So yes it is a wide range to say that Bitcoin should spend the year between Twelve thousand and thirty five thousand Dollars but that's also what data the Data would suggest is a likely range Right So I I think that you know we have to be Aware that you know this volatility is Is what brings us here it should not be Scoffed at is well that's too large of a Range that's what we saw I mean that's What we've historically seen that Bitcoin can be range bound between Between fairly large numbers right take A look at at even 2015 which looks like A fairly sideways year Bitcoin rallied Off the low here 90 percent or so I said 80 earlier it was around 90 in fact and Then it came back down and then rallied Up another 40 and still ended up putting In a double bottom So you know there's there's certainly These things that we have to be uh Considerate of and I've said before Right I mean we've made the comparisons Between this cycle in 2019 I think you can make evidence in both Directions I think there's some evidence To suggest the yearly high is in there's Some there's some evidence to suggest That it's not to me the you know if you

Look at a lot of the the the the the Moving averages and whatnot we are Starting to show some weakness right the Momentum is starting to die down for for Bitcoin in some areas the main Counterpoint is that the dominance of Bitcoin is still so low and and normally It takes a rally by Bitcoin USD to Really break the Range High it doesn't Have to be I mean look this this rally Over here by dominance occurred when When Bitcoin USD was going down not up I Mean this was when Bitcoin was going Down that this rallied so I don't think You have to have it I don't think you Have to have Bitcoin USD going up to Necessarily break the Range High but That's actually what happened in 2018 And it's what happened in 2019 it was on A Bitcoin rally and it was only once the Range High the dominance was broken the Said then Bitcoin actually came back Down and then you had sort of the down Part of of the bear Market year or the Prehabbing year right So uh there's certainly evidence in both Directions so how do you navigate that How do you navigate it on one hand There's there's the there's the only Doom and Gloom crowd on the other hand There's the moon boy crowd and it's easy To get drawn into either of them right And it's easy to want to say well you Know there's compelling reasons to think

Both sides are right I sort of think That in the pre having years You get both sides wrecked that's what My my own experiences teach me is that I Fell in 2019 for the rally right like I Thought that that you know that that Things were good and and then we just Came back down and then in 2015 we Rallied on up and I was pretty excited And and by the end of 2015 I didn't know What was going on I'm like well Everything seems bullish why are we Going back down So this is just what my own experience Has taught me markets do evolve so I'm Not saying that it has to play out the Same way But in general that is what that is what My own experiences has taught me have Taught me and that's why I've I've Continued to say that in the pre having Year normally what happens is you go Half up And half down Now there's something else I want to Mention I don't know we're going pretty Far beyond what we normally talk about In these videos but I want to do a good Job of trying to communicate all of my Thoughts you're probably thinking well Ben you know the s p is is is going up a Lot right now so won't that drag Bitcoin You know if if the NASDAQ and the s p Are rallying can't that drag Bitcoin up

To near its prior highs well one of the Things you have to also consider is that Bitcoin is further along the risk curve Than than you know things things like The S P 500 in fact when Bitcoin rallied In 2019 4X right you should note that the s p at The time was was actually putting in Right new highs okay so the s p was Already at a new high in in April of 2019 whereas this time around in April Of 2019 of course we're not at a you Know we're not at new highs uh we'd have A long way to go so I I think in that Regard the s p is not as strong as it Was back in in 2019 and by association Bitcoin has not been nearly as strong Right by by June of 20 of 2019 Um you know Bitcoin was was gearing up For its final move which took it up 4X From its yearly open or from the low Anyways 4X and I don't really think Bitcoin is going to be getting going 4X From its low this year okay I mean that Would put Bitcoin at like 60k I don't I Don't really think that's happening this Year Um if I'm proven wrong I'm proven wrong But like I don't think that's happening This year So we have to remind ourselves that the S p continued to Rally now here's Something to consider you're probably Wondering well why is the s p going up

Week after week after week and then Bitcoin's just kind of sitting here Well first of all I will say this Bitcoin Moves more discreetly so you could have An example or you know you could have This idea of it just kind of sits where It is and then when it decides to move It moves there within two or three weeks And then does nothing for the next two Or three months that's what we've seen In fact I mean you know these rallies by Bitcoin there they've they've been very Discreet and then they would just go Sideways for the next two months right Move it on up and then just go sideways For months so there is some reality of Hey you know yes the S P's gone up Bitcoin has not that doesn't mean that It can't but on the other hand The s p in 2019 went up basically for The entire year with a couple of large Corrections right there was like a seven Percent correction that started in April And then there was also a a seven Percent correction that started in July But at the end of the day 2019 for Stocks was mostly just up and it wasn't Until the resolution of the yield curve And after a pivot by the Federal Reserve And the recession that we saw the s p go Down now the s p went up in the second Half of 2019. But Bitcoin did not you know Bitcoin

Faded So there are examples here Or Bitcoin can fade even when the s p Goes up now what you would be looking For Would be a correction by the s p if That's going to happen so you know Bitcoin really started to fade in July Of of 2019. and that corresponded to a About a seven percent correction in the S p 500. the s p continued to go up but Then again Bitcoin continued to fade for Basically the rest of the year so if the S p were to get some type of major Correction let's say it gets a seven Percent correction let's say it goes to 4 300 or something and then gets a seven Percent correction goes all the way back Down to four thousand there's a chance That that could take Bitcoin below its 20 week SMA right if it doesn't rally Between now and then so that is the risk Right if Bitcoin can't catch a bid During the rally by the s p then it's it Likely could fall below its bull market Support ban doing a potential correction By the s p So I think that is something that we Have to contend with is if there is a You know some type of of a correction in Let's say July so next month which is When it happened in 2019 if there is Some type of a correction and Bitcoin Hasn't rallied sufficiently high enough

Above its 20 week then it might not be Able to hold the 20 week out of support Whereas the s p could fall you know Seven percent and and you know maybe Only just slightly go below the 20 week It could take you know crypto much Further down below it and for instance Like total three the altcoin market is Already below its bull market sport band Right it's already well below it so There there's a lot of things that I I Think we have to consider when thinking About where we are in this you know in Sort of this in the grand scheme of the Market cycle Now where would the altcoin market make More sense based on cyclical behavior of Crypto well if we do get that secondary Scare you you would likely see the Dominance of Bitcoin really start to Move above the Range High and then that Is where the altcoin market historically Has started to make a bit more sense Because by that point most of them have Done are are getting close to the end of Their local bleed on their Bitcoin pair So the honest truth is that most of them Just bleed against Bitcoin forever Anyways but they can then catch a bid Going into a a period of overvaluation But oftentimes it doesn't happen until The dominance is much higher above the Range highs and often it doesn't happen Until we get back to the lower

Regression trend line which still we Have not been able to hit do note that If we just kept going sideways at the Current evaluation it would take us Until the summer of 24 to hit the lower Regression trend line right just just so You're so you're aware it would take Until the summer of 24. the last thing I Want to show is the summary risk metric Overlaid on the this total market cap Regression trend line and everything and You can kind of see like the ebb and Flow from periods of overvaluation to Periods of undervaluation right and We're just in a period of undervaluation Right now and again you know going back To this idea while use at all for too Risky and you're not saying we're Undervalued I've said this for months It's that they're too risky in my Opinion relative to bitcoin that's why I've said for a long time right like my Crypto portfolio is is Bitcoin heavy Because I would expect the altcoin Market to bleed to bitcoin no matter the Direction of Bitcoin USD right the whole Thesis with the dominance is that the Dominance goes up no matter the Direction whether Bitcoin goes up or Down I think some people think that it Means only Bitcoin goes down but no Because they've never seen Bitcoin go up And the dominance go up because they Joined in 2021 after bitcoin's parallel

Rally in late 2020. so they've never Really seen a rally by Bitcoin where the Dominance went up But no this is why I've said right the Dominance should go up no matter the Direction of Bitcoin UST so if you spend Half the year going up for Bitcoin and Half the year going down the dominant Should slowly go higher no matter the Direction and that way when you look Back at your portfolio a couple years Later you'll see that the altcoin market Just continued to slowly bleed back to Bitcoin during that time the last thing I want to mention is just if you take a Look at say total three divided by the Market cap of Bitcoin right you'll see That it seems like it's an oscillator Right It sort of just moves up and then down And then up and then the idea is that it Probably comes back down And so the the altcoin market in my Opinion still needs to bleed Systematically back to bitcoin and then And then only then the all clean Market Starts to become worth the risk in my Opinion I think we'll wrap it up there I I do want to remind you that The ultimate goal right is is to see the Crypto market cap get to that 10 Trillion dollar Milestone plus or minus A few trillion right as we go to sleep At night we cannot help but wonder

What's a few trillion dollars among Friends thank you guys for tuning in Make sure you subscribe check out into The crypto versus premium you can get Access to these charts and I will see You next time bye