Filbfilb: Looking at Bitcoin cycles

I was the guy laughing at my friend who Was interested in crypto and it was Going down all the time you know do the Wrong thing against price action because Most people are wrong I was very very Passionate about crypto and I quit my Job welcome to coin telegraph's Crypt Trading Secrets Podcast This episode's guest is a crypto Trader And analyst who goes by the name Phil B Phil B on Twitter he has a respectable Following on Twitter and also co-founded A crypto intelligence and tools provider Called decent Trader all right here's Phil B hey Phil B thanks for jumping on An interview here hey man thanks for Having me I wanted to just start by Asking about your Twitter name how did You come up with the name Phil b philb h That's a good question I think most People actually refer to it as philb Philb oh that's experience the reality Of that actually is it was it was an AOL Instant Messenger name uh which is Probably showing my age actually which Came around in the late '90s uh and then Went on to become a DJ name which is Rather cringeworthy these days as well But yeah that's where it comes from is Uh My First Avenue on the internet it Just Felts right to continue to do it Because it was random and no one else Used it so that's why I continued with

It that's funny fun so the show Typically has three segments the first One is called finding the bottom i' just Like to ask guests what they think about Bitcoin's price and where it might be in The bare market bitcoin's price has Moved up a bit in January moving from Within the $16,000 range to the $23,000 Range so from a macro longer term view What's your opinion on bitcoin's price Looking at the last few months and the Months ahead good question I guess That's the one everyone wants to know The answer to my personal view of it is Um there's always been a few things that Has been very similar with each of the Previous uh Cycles which uh are proving To currently be true the main few things You know uh I don't like to look at too Many things because sometimes it cloudes The water somewhat but the three main Things that I found as being really Important for Bitcoin is that um we have Followed the previous two cycles so I at The Cycles as being obviously maybe not Obvious to some but the Bitcoin harving Like I always look at that as being the Starting point because you know that is The ethos of Bitcoin you know like it Has this diminishing output of inflation Um in terms of emission of new Bitcoins And what we've typically seen in Previous Cycles is that about a thousand Days after the

Haring um we we end up breaking out of The um the bare Market or what was Previously you know we'll have seen the The the big runup uh and we'll have seen The big draw down uh and about thousand Days after the cycle after the cycle Starts we start to see us move towards The new cycle which to me is um defined By the new Haring and we've seen that Bitcoin is behaving almost to the day as It has done previously um and so in Terms of time uh which is important with Behaviors of asset particularly when we Have inputs such as you know reduction Of inflation uh is important and so in Terms of time uh we are where we should Be uh and the the price as you say is Now 23,000 uh we've seen lows of you know Let's call it um 16,000 uh slightly Lower than that but uh we have seen the Market uh respond to those lows in terms Of time so the bare Market itself is has You know played out in terms of time and The way would expected to based upon the The previous Cycles basically looking at How the miners are reacting you know Have they been put under pressure in Such a way which has led to price Gravitating towards the cost of Production and and how are those miners Behaving as a result and we have seen Some capitulation so I believe that we Are closer to a bottom in terms of a

Fundamental cost of production basis and Also you know we have uh the mvrv Z Score or with or without the Z score is Not necessarily important but looking at The differential between the cost at Which the people who own Bitcoin uh Accumulated there's Bitcoin on the Blockchain and what price it was and the Current price um and we've seen that Deviation put investors under a lot of Pressure to such an extent which causes Capitulation uh and we we have also seen That and these are the things which last Cycle uh told us that we should where we Need to be you know we've seen Capitulation can happen two different Ways like either through time or Price Or both and these three things I just Mentioned there I believe show us to Have seen a form of capitulation through Both time and price I will actually add Another one which is normally that we See a draw down um of around 85% having Gone parabolic uh we didn't actually see That this time we haven't gone quite as Low as 85% we've seen slightly less than That However we've seen close to that so in Terms of where we are I would say that We're exactly in line through time and Price with where we should be with Regards to looking towards to price Potentially appreciating in the new Cycle so do you think Bitcoin has

Bottomed already that is obviously the Million dooll question and my answer to That is with a big caveat um which I Know some people may not like but Macroeconomics at the at the moment is Is influencing Bitcoin um greater than Ever before which in some ways is a good Thing uh it means it's more important Now you know more people look at it and With a with a bigger market cap comes That influence and and do I think Bitcoin's bottom I would say that all of The metrics that I've just mentioned Would lead me to believe that yes it has Bottomed however we live in a different World um to what most of the people Listening will have ever really seen Before which is we live in a time of um Potential Instable Macroeconomic and Also Geopolitical instability you know these Things with which are going on in the Ukraine are are very much unknown as to What the outcome of that's going to be So you know for example today and Yesterday we've heard about the US the UK and Germany are sending tanks to the Ukraine and we know that we have an Issue with regards to supply um which is Cre inflation we can talk about that More potentially but that outcome Remains to be unknown and it's like the

Wild card right what I would say is is The bottom in I'd say if we continue to To live in this relatively stable Environment absolutely if you believe in The Bitcoin cycles and what's going to Happen with Bitcoin and the scurve that We're supposed to be on with regards to Adoption I believe the bottom is in yes However we need to understand that the Macroeconomic situation is bigger now And more important for Bitcoin because We have a bigger market cap which means You need bigger amounts of money to move Um the the dial on the Bitcoin price and And you need bigger players to come in And do that and and while they they have Issues with regards to liquidity Themselves which might be a derivative Of you know um interest and exchange Rates um that's going to make that a More challenging task in future and more Important for Bitcoin in the short term Though in terms of the answer do I think The Bottom's in assuming nothing Escalates then yes I do believe the Bottom is in yeah so if I heard you Correctly and uh correct me if I'm wrong Did you say that you think the the world Outside of crypto is impacting Bitcoin Um more than it ever has before yeah for Sure I mean you know Bitcoin uh needs to Attract bigger amounts of money to to Move the needle on the market cap and as Such you know that requires new

Financing to come in and the cost of That financing is is an important thing And as we currently stand the cost of Financing is you know it's still going Up but it's probably according to Estimates going to be going up at a a Slower rate so a lot of it is currently Priced in but if we see that change then You know it it goes against what the Market expects Or if we see a big curveball come in Where escalation occurs in the Ukraine Um then yeah things would change again So I know you hit on it a little bit but Do you want to just dive in a little bit Deeper on you think Bitcoin has probably Bottomed if nothing changes but what Might change your opinions if you want To dive into that just a little bit more Supply side economics has become a thing That really we're not that familiar with Like we live in a globalized world and We have been able to easily move around Any of the World Supply to towards where Resources are demanded to be used in Production um and that has changed Particularly with the the conflict Overall if that changes I you know were Unable to produce the inputs required For the supply of the Nations that Demand those products if that's not able To happen easily we're going to see Prices increase and things continue to Get worse however

Um if we can resolve some of those Issues which you know Europe's tried to Do a lot of that with incre increasing The LG um supplies and finding third parties To do that um if we can continue to do That sort of thing and find Alternatives Then uh we may be a to stabilize Production um and make sure that uh the Economy is able to continue to do things Now why is this important for crypto um Well firstly obviously like excess cash Or like spare cash or investable cash Requires um a favorable interest rate You know people are willing to take more Risks if the risk-free rate reduces Overall you know crypto also Requires um new money to come in from Retail um we know where the Apex of risk If you like um and we need the new money To come in and if we have a shrinking Economy and people have less money uh Disposable um they are not going to be Able to speculate on things such as Crypto so like the retail investors are Sort of like a microcosm nail end of What the bigger corporations do when it Comes down to investing so the worse it Is and the tighter things get for retail Um just on household income and so on um The worst that will be in in terms of Creating a euphoric bubble for Bitcoin To go up you know it's the two things Are very much linked what do you think

About future possible Bitcoin bar Markets will the bull and bear Cycles Continue I think that's a good question Uh I think there will always be Bull and Bear markets you know every Market Continues to have Bull and Bear Market Uh for for whatever reason and the Biggest thing driving Bitcoin is is Speculation uh to to a large extent and I do think that we are still a Speculative industry I do think that There's a good chance that um we will Have Another uh another very uh strong bull Market um with crypto each cycle brings In more people more understanding uh More acceptance of what it is that's Trying to be achieved uh questioning Around the ethos of why it exists and so On and so I I do believe we have gas on The tank to do another cycle uh what is Quite evident is that as market cap Increases the likelihood of going higher Becomes more difficult right so the Difficult the increases to get a bigger Market cap to attract that capital and To also you know change the world if you Like um and I I do think that we Probably have one last and I I did post This on Twitter one last you know Notable bull market in crypto where your Gains may be to the tune of you know Maybe not quite 10x but getting up Towards that order um from where we are

Or where we have been so let's say we've At 15K or 16k bottom like could we do a 10x again I do think that's possible but Are we going to do a 20 or a 30X Probably not um I think if you just look At the Bitcoin chart and you stand back And look at it on a logarithmic basis It's obvious that it's a tap there's a Tapering effect you know like the highs Are getting lower you know there's still New Highs but they they are not Expanding on a logarithmic basis which Is what you would expect within um the Adoption of crypto so so yeah I do think There are still notable gains to be made In an industry which is clearly has its Faults is growing um and has those Growing pains with it but but does that Mean that it's it's you know going to do A a 30X from here probably not I think Seems unlikely so moving into the next Segment which is called Trade Secrets Basically just tell me about your Background or as much as you're Comfortable talking about what did you Want to do when you were little I was Quite fortunate when I was young I went To a school that really um championed Economics And that economics idea was you're going To probably be an investment banker or You're going to own a business you know That was the outcome of the class um When I talk about school I'm talking

About high school you know like sort of 15 16 level so it was always ingrained Into me that I wanted To achieve something with the market Didn't know what I was doing at the time But also business was quite important to Me as well you know got a strong family Background in business so I was always Interested in doing both of those things Um which is ultimately where I ended up But uh in the meantime there was a game At school well it was actually sponsored By Merl Lynch and they did a trading Game and I took part in that I think When I was like 16 or something and me And my friend won that um and it was a Trading game where you had to pick some Stocks and then if those stocks went up You WN or you did not um and we we Nationally won that so that was a an Interesting first delve into investing And what you might get if you decide to Make the right choices so there was that Um and then obviously I went off to do Economics at University not obvious but That is obviously what I decided to do In the end and yeah that was you know Got really boring you know frankly It's interesting because the lower level Stuff's actually more interesting you Know it's more relatable but as soon as Things start getting into like the Delves of the equations and all that Sort of stuff like it actually gets a

Little bit tedious would I say um so I Was a bit unsure what to do when I left University actually decided to that I Wanted to be more in the business side Of things so I went and worked for a big Blue chip American Corp and start to Understand more about like how does a You know big company operate in terms of The way that they structure themselves Um to make the benefit of tax structures And then also how do they actually just Make that marginal gain you know every Month um and be really operationally Efficient so that grounding took me down The I actually went down the accounting Route so I went and became a child Accountant um and really found that Quite useful in just understanding how Businesses operate with you know so look Being able to look at a balance sheet And really work out actually is this Company able to do what they're saying They're going to do and able to achieve What they're going to what they're Saying they're going to but there was a Bit of a Crossroads for me which is when Um I left that organization and went to A mining company which is the same time I also got involved in crypto or took More of an interest in crypto I mean my Crypto experience at that point was kind Of laughing at my friend you know I was The guy laughing at my friend who was Interested in crypto and it was going

Down all the time you know I was the guy It did get to a point where you know Your friend keeps talking to you about This thing and you should probably pay Attention to them if they're really Passionate with it and um I I really got Involved and understanding the macro Side of crypto which really enticed me And made me want to give it a little bit More attention um and that was quite Fortunate because it came at the time When I was actually working at this Commodity trading firm um so it was a Minor and also commodity Trader um so at The time I was involved in risk Management and looking at you know um Hedging Commodities both FX side and Also the actual commodity stuff so there Was a really good um coming together of Of things for me which was was the Knowledge and of the mining side of Things in an actual physical world and How you actually trade with crypto which Was also a mining based thing um is it a Commodity I don't know like that's open For debate but um all of that stuff came Together all at the right time and I was Like okay I'm really interested in this Now and actually uh and and then yeah I I started getting involved in crypto 2015 2016 and then yeah I ended up um I did Pursue my other career in finance for Some time and achieved what really what

I wanted to do to such an extent where I'm satisfied that you know if I wanted To go back into the inverted comers real World I could happily go back to a board Level um but while I remain in crypto That that that's really where my passion Was and I I feel as though it's Important uh for you to be successful um For you to to want to work in something You're passionate about and and at that Time in particular I was very very Passionate about crypto and and So Eventually I I quit my job and uh went Full-time trading crypto and um and yeah Trying to provide information to people Involved in crypto uh in such a way Which is useful and understandable which Is where I think back in 2016 2017 was Not very well done so I was able to put Both of those two things together um and Provide some hopefully useful input to The the uh Community interesting so how Would you describe your trading strategy Trading strategy is like an evolutionary Thing for everyone Um when I first got got into crypto it Was very much more um about trying to Manage my position all the Time basically I'm Allin kind of Situation um you know I was a bit Younger back then and had less Capital Um and it was all my own um and at that Point in time it was you know very much Around trying to understand whether I'm

In or not on a daily basis I didn't Understand the Cycles I didn't Understand you know what would what I Would expect to be occurring uh in the Future it was it was very much a Learning curve situation and back then You know it was very much about today is A new day I'm going to have to make a Decision today uh what am I doing fast Forward uh to 2023 which several you Know it's getting towards a decade now Uh later and I have decided that really What I want to do is split up my uh Capital um where I take cyclical Decisions which are around positional Trading I.E you know whether you call it Trading or investing is up to you but You know I'll take a I'll take a view Over what's going to happen over a Medium term let's say I'll split up my Money um if I have 100 I'll split 80 up Uh into that longer term View and and With that that 80% about half of it I'll I'll manage Along Route when the market gets over Overly exhausted so of the 80% of the 100% 50% we're going to 40% so 40% of The money I'll be looking to you know Try and actively manage that position to Where the market overheats or we get to Obvious places of uh exhaustion I'm Likely to you know manage that through Hedging or or or just simply uh Realizing gains the 20% is very much

Active trading you know that number over The years like from where I was at Before at the start of this uh question That would have been closer to 100% um That's now 20% and many different Reasons for that but the 20% is active Trading you know so a day-to-day basis If I decide that I think the Market's Going to go up I will actively uh trade On that basis whereas the the other 80% Is more cyclical to swing trading and The other 20 is like actively doing what I need to do did you mention at all like What you look for as like kind of what Gets you into and out of a trade like What what makes a trade interesting to You in terms of what is interesting to Me is understanding firstly volume flow You know um you know order flow some People got order flow um volume flow is What I probably call it trying to Understand where there are points in the Market it's just obvious that there is Demand um and good example would be so Prior to the FTX collapse there was Somebody just buying Bitcoin between 18 Or anything basically below 18 500 it Was just getting bored up yeah um and When you've got something like a moving Average coming down like a really Important one like the 50-day and the Every time the price goes below a Certain point you know there's there's Clearly a flaw on the chart you know

There's a there is a buyer below us and We have sellers above us and the seller Is the seller line or the natural Sellers in the market is is Declining um as is was the nature of the 50-day moving average back then when That happens you know there is Eventually going to be an expansion Above the 50-day moving average because The sellers are going to run out of Capability they're going to have to Realign their position and ultimately Will be forced long sooner or later just To exit their position so when I see a Natural point of demand and Supply Becoming different Uh that's something that interests me And you know FTX um when when we saw That sell off um following that we saw Exactly the same thing happen with the Same moving average but it was 16500 This time instead of 18 and a half and Again a good example is the FDX sell off The selloff that we had for the Magnitude of the collapse when FDX was So small that it told us that we've Probably seen most of the people who are Going to exit the part the party already Having access Um you know the bigger the news and the Smaller the drop that sort of tells you That there is a fundamental shift in What's going on um and I like to look For those sorts of things and and and

Try and take advantage of them like that And when they're combined specifically With the things I just talked like the Thousand day Haring cycle the power Multiple that M VV head SC the draw down Um from the previous cycle um when you Put all that together if you're a buyer You can say well maybe the smart maybe I'm the smart money here maybe that's my Role is to try and just Identify some Slightly smarter people in the market And then ride their boat with them um And that's kind of how I like to think About it is you know try and identify When the smart money's coming in and Then go with those guys you know do you Want to just touch on technical analysis A little bit more maybe what you look For on the charts I know you touched on It a little bit um when it comes out ta Yeah um it's again it comes down to Volume you know when when you're finding Buyers order flow is quite important you Know like finding out whether or not People are fundamentally buying the Market you know is the market moving uh Around with a lot more Market buyers Than sellers you know how is that Working out and then yeah you know I Love to look for things like double Bottoms you know particularly at the Bottom of uh things like falling wedges Which have just been within like my Favorite thing to find is a double

Bottom within a a descending um wedge uh Which is what we've just broken out of Um so I'll always be looking for those Sorts of things I've got I've built Several tools over the years which bear In mind those sorts of things um Particularly volume obviously moving Averages are important as well um so I Use the tools that we have a decent Trader to to try and find the bottoms uh But also what's also really important to Me is trying to look at where the Market's pushing against price so for Example if price is going up um and we Find that the that most of the market is Going in the opposite direction um what What we tend to find is that price Continues up because most people are Wrong um and those guys are eventually Going to be liquidated and and is that The def is that why we move up there Maybe you know uh but I don't actually Really care about that it's just the Fact that it's happening and so As such you know things like funding Rates are really important and looking At the relationship uh between funding Rates long short ratios price you know Are seeing the market do the wrong thing Against price action and when when you See that it's going to continue um and It increases the probability of having These kind of micro blowoff events which Which we have and DC repeating let's

Head into the last segment here which is Called the next Bull Run Basically how will you know if Bitcoin Moves into a bull market I know again You touched on the bottoming aspect of It what are you looking for that might Give you confidence that it may have Switched into a bull market I don't know If this is my old corporate sort of uh Philosophy coming to things but like I Like to think of things like a a red Amber green or rag sort of approach you Know how many of these key metrics that I look at have turned to green or to Near Green you know I have a scorecard And if if things are getting closer to Green then we're getting closer to being In a bull market but fundamentally you Know so far we've actually seen Bitcoin Behave exactly as we would expect um for It to be and the first step is to break The 50-day moving average and we've done That uh the second step is to break the 20we moving average and for it to be Supported so we have done the first part Of that part but we haven't seen Supported yet I would like to see the 20we moving average supported by Bitcoin That's been very important in bitcoin's Past and so I'd like to see that um Maintained uh but fundamentally you know Even for the most um passive investor uh In the space the 100 week moving average Is normally the Line in the Sand where

You need to be above it um and that's Still a long long way above where we are Now that's still up at 36 Okay getting there is going to be tricky You know it's above previous support Which is likely to be resistance at the Moment so I'd suggest that that's going To take a little bit of time you know we Might see that in Quarter Two by that Point the 100 week moving average will Have come down probably to about 30k or Something like that and so getting above There and maintaining above there would Be a really really strong sign um you Know for the most passive investor I Think that's probably let assume they Did really well right and they got out Above 60 or 50k or something like that That's probably where they need to be Paying attention I think you may have Touched on this a little bit but what do You think might happen after Bitcoin has Moved into a bull market I know you Referenced Bitcoin may have bottomed Already going forward do we move into a Sideways period or how does it play out From here do you think I think that's a Good question again um so we sort of Have to assume that uh the macro Situation's going to kind of you know Taper off and thing the world's going to Start to look like a more friendly place Again if that happens and we do break Out from where we are now this's still

Going to be about 18 months from where We are of sideways give or take when I Say sideways I mean like not moving to New all-time highs so the new bull Market Market would probably break out In similar fashion to what we've seen Previously which is where it's you know A strong breakout above all-time highs Um and it's going to be a Grinding challenging event um to get to That for most holders and as I say you Know 18 months from where we currently Are today um would probably be the time That sort of thing would start to happen So so yeah I think I think it's proba Going to look not hugely dissimilar to What we've seen before you know like We'll probably challenge the all-time Highs um probably get rejected we'll Probably challenge other meaningful Highs and and lows such as about 45,000 And that'll probably be rejected um and Then you know along the way there's Going to be big shakeouts it's going to Be tricky to get above um everything Above 30k it's going to be it's an Unknown but what we do know is there is A lot of people who are holding um Relatively large positions probably at Spot at this point um from around that Range and they're probably just can be Thankful to get out and then work it out Get out and work it out if you like and So yeah it's it's going to be working

Through the 30 to 60k range will be Tricky so it's not going to be straight Up it's going to be hopefully quite easy To navigate on a technical point of view But uh yeah I think uh at the moment the Thing I'm focused on is that 100 week Moving average is way above where we are Um we currently do have quite a lot of Liquidity between where we are now in About 27k so I think there's a Reasonable shout and I posted this on Twitter that the lows are likely to be Around 15 and the highs in the next six Months are likely to be top and out Around 27k like that's my framework of Expectation however you need to be able To change that as as we get new Information so currently that's my view I'm looking at the cycle I'm looking at Macro and and all of these things Suggest that that's probable you know a Holding period where hopefully the Economy doesn't Implode um we can continue to you know Uh rebuild some sort of faith in the Industry which has been massively Damaged as a result the FDX and Luna Collapse I think that about wraps it up Thank you so much philby for coming on The show and all your uh interesting Insights yeah thank you for having me um It's good to talk to you again so uh Hopefully we'll do it again in the Future all right thanks so much thanks

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