Zoran Kole: Bitcoin cycle theory, echo bubble and more

I started trading during class so it Actually took me five years to graduate Rather than regular four years millions Or even billions of dollars stored in Nothing but your head the worst thing a Trader can have early on is success I Don't know how or what I'm going to do With this asset but I want to be Involved some shape or form it's you Vers you vers the market I bought at 850 It went up to a th000 I thought I was a Genius the market will bite you back in The butt welcome to coin telegraph's Crypt trading Secrets Podcast Welcome everyone I'm your host BJ pyrus This episode's guest is Zoran Cole Zoran Is a crypto Trader going by the handle Captain co1 on Twitter Zoran first got Involved in crypto in 2013 didn't really Dive into trading until 2015 while Studying at at Cornell University he Mainly looks to technical analysis for His trading okay without further Ado Here's Zoran Cole hey Zoran thanks for Jumping on the show hey BJ thanks for Having me pleasure to be here I Pronounced your name right right yep you Got it do you get a mispronunciations a Lot with that I do a bunch so sometimes I go by Cole sometimes by z uh I'm Indifferent gotcha well it's great to Have you on so the show typically has Three segments the first one is called

Finding the bottom in which I ask guests What they think about bitcoin's price Amid the bare market so far in 2023 Bitcoin's price has moved up from near The mid to Upper $116,000 range to up Past $25,000 although its price has Since moved back downward a bit According to coin telegraph's bitcoin Price index chart so from a macro longer Term view what's your opinion on Bitcoin's price taking into account the Last few months and the months ahead Yeah so you know we started off the year Very bullishly and I've kind of been Under the impression ever since the Whole FTX the bacle that we're entering This Echo bubble phase it's a kind of a Buzzword that's been on Twitter a bunch But uh to me all it really means is that When you have a bubble expansion right Like we had in 2021 and that eventually Popped in November um we had a year of Relentless selling right and we kind of Got to this FTX the ble prices came down To 15,000 after the things kind of Bottom out all the bodies kind of float To the surface we enter this phase Called an echo bubl all an EOB bubl on My opinion is basically a lower high From a macro standpoint so I'm not in The camp like we had in 2019 where we Went from 3K to 13 14k I'm in the camp That we're going to be in a larger range For the remainder of this year going

Into the Hing event so just to clarify I'm a big believer in Bitcoin Cycle Theory which is kind of guided and Propelled forward by the hining event And I think we're about 300 400 plus Days away from that and price usually Tends to go up leading into that event So you know we had this great start to From beginning of the year in January up Until now I went to 25,000 so I'm still In the camp that we are still in an echo Bubble prices have not topped yet now as Far as how high I think Bitcoin can go Um within the next you know quarter Second quarter whatever the case may be I want to say it's going to be between 28 to 31,000 that's kind of my target For this quote unquote Echo bubble and The reason being is that I don't think We'll get to like in 2019 where he went From 3 to 14K and that was about a 61.8% Off Fibonacci retracement I think here We're going to be a little lower so my Target right now is around 30k um we Have a CME Gap at 28k and that's I'm a Technical Trader so that's kind of the Area I'm looking to kind of drisk a lot Of my margin positions and the prices You mentioned there you're talking about Quarter one or quarter two of 2023 Correct correct yes so I don't think This Echo bubble will play out longer Than let's say end of the second quarter Gotcha so you touched on this a little

Bit but what's your opinion on where you Think bitcoin's price might be in terms Of the bare Market do you think Bitcoin Is still in a bare Market yeah so it's Interesting when you ask that because You know a bare Market to me um and a Bull market they're all really just a Market at the end of the day we had a Year of Relentless selling and now we're Finally getting some sort of bounce so To speak so from The Cycle Theory Point Standpoint I kind of think that we're Exiting the bare market and entering a Longer accumulation phase if we go to Like the monthly and weekly charts we're Looking at like this giant range let's Call it 16,000 to 25,000 pre FX so I Think we're still going to stay within That range I just think we're going to Deviate Above It Up Until 28 to 31,000 So do you think bitcoin's bottomed Already it's an interesting question Right because from the technical Standpoint I see the argument for the Bottom from the Bitcoin Cycle Theory Standpoint I can argue that it is the Bottom however I do have to take into Account there a lot of macro indicators And such that kind of make me cautious Because I don't know what the global Markets are going to do if the dollar is Going to rip up Etc so from a Bitcoin Cycle Theory standpoint yes I think the Bottom's in but do I think we can

Revisit the lows to you know 17 18,000 Absolutely gotcha and then do you want To just dive into that a little bit more About where if you think Bitcoin is Still in a bare Market or not yeah so I Think it's exiting the bare Market to be Uh clear I don't think we're going to See Relentless selling going into the Future but I do think that we can expect A bunch of chop and range-bound behavior But in terms of like you know the exact Bottom You could argue that the FTX Toach will kind of signify capitulation And in every Bitcoin bubble we tend to See some sort of capitulation event Whether that's 3K the co crash the 4K Etc so yeah I do think in terms of price Bitcoin most likely has bought him and I Say that with probably like an 87% Confidence it's a very specific Percentage Yeah just a gut feel that I Can see something from the macro Standpoint if equi slid off and the NASDAQ Etc went below certain key levels We could see a Black Swan event like we Saw during the co crash but again you Can't really anticipate a Black Swan so For all intensive purposes yeah I think Bitcoin has bottomed interesting so what Do you think impacted bitcoin's price The most in 2022 I really think there Was a lot of overhang from a lot of the Funds and FTX exchange so three arrows Blowing up was one of the first

Indicators to me that prices were going Lower just because when a fund Liquidates they have to sell their Assets and their assets included Bitcoin So I think there's a lot of for selling That occurred just because of the way That funds were liquidated and I think a Lot of the price movement that we saw in 2020 2 was the four sellers basically Exiting the market at whatever price They could what do you think has Impacted bitcoin's price the most so far In 2023 yeah so it's interesting because You know there have been murmurs that Binance was buying up a lot of the Bitcoin using their B USD I'm more in The camp that prices are rallying Because they've been suppressed for so Long whether that's retail driven Whether it's institutionally driven I Don't know but I do think that when you Know we're adhering to bitcoin Cycle Theory there is an inevitable lust for Making it all back and the greed that Comes with the previous bubble popping And people trying to basically claw back Whatever money they lost over the last Uh 12 months in 2022 so to phrase it More simply in 2023 I think the Allure Of making it back in one trade is kind Of the reason that prices have propelled Up since the beginning of the year and Do you think that will be true for the Rest of 2023 no not exactly because I do

Expect a lot of range-bound behavior to Occur so all the buyers that were able To buy 15 16 17 ,000 are probably going To look to distribute somewhere in the Upper 20,000 lower 30,000 so I do think We're going to see quite a bit of chop Going into the end of the year Interesting and you talk a lot did was It Cycle Theory you mentioned uh Bitcoin Cycle Theory basically driven by the Hining event gotcha gotcha what do you Think about future possible Bitcoin Cycles will the Bitcoin Bull and Bear Cycles continue yes but to a lesser Magnitude than they have before right so I've been in the space since 2013 and I've seen a bunch of explosive Exponential growth over the last several Years but I still believe that Bitcoin Adheres to this four-year cycle just Because it's driven by the supply and Demand mostly the supply being cut in Half every four years on average so how Does bitcoin's bare Market this time Compare to previous bare markets so from A I guess as a Trader standpoint it's Been much more Relentless in the selling Just because we've had a lot more Institutions enter the game in the last Couple of years and the way that Bitcoin Traded back in 2013 to 2015 so you know The previous cycle of 20K at 2017 is Much different than how it trades today And I believe that has in large part

Because of the way institutions have Entered the space are trading with their Algorithms Etc on and just pushing Prices one way or another let's move Into the next segment which is Trade Secrets basically just tell me about Your background or as much as you're Comfortable diving into so I got into The space in 2013 I bought my first Bitcoin around 850 bucks right before Mount goau and this was so I could Basically buy a fake ID in the Silk Road So that was kind of my entry point into Crypto my backstory is that I got into Crypto this was end of my senior year of High school saw that the price of Bitcoin was pretty volatile you I bought It at 850 it went up to a th000 I Thought it was a genius um and then I Saw it all came crashing down on me so I Was largely a holder hleer for the large Part of from 2013 to 2015 and it wasn't Until late 2015 that I kind of got this Urge to quote unquote make it all back And uh figure figure out how to get back At the markets for you know the mount Ox Bubble from 2015 my sophomore year in College I started trading on derivatives Exchanges and kind of Dipping my feet Into the whole idea of trading rather Than just holding Bitcoin as an asset Class Bitcoin in general to me has Always been this ingenious Discovery or Product of you know Satoshi who it is

Who they are who might be behind it but The point being was the idea that you Could go across the world with millions Or even billions of dollars with stored In nothing but your head right like you Remember your private key was very novel To me and it excited me to the point Where I thought that you know this is an Asset I want to be into I don't know how Or what I'm going to do with this asset But I want to be involved some shape or Form so U my college experience I Studied Hospitality with a minor in real Estate and finance but truth be told I Started trading during class so it Actually took me five years to graduate Rather than regular four years I was Just very fullon into Bitcoin went to Cornell so we had Professor gunur who is You know I think now the president President of aval laabs the aex chain so I had a lot of resources to kind of dive My feet into the blockchain space Unfortunately I never majored in Computer science um if I go back in time That would be the one way I would do it Over is to learn computer science just Because Cornell had such a flourishing Computer science program and I would Have learned how to code Etc and it Would have been more deeply entwined in In the text side of things but uh Lo Behold you know I got into the space and Basically trading my way up and kind of

Made a name for myself as being a Trader Fast forward the last five six years I've mostly just been trading for my own Book and so how would you describe your Trading strategy I classify myself as a Discretionary swing Trader and the Reason being is that for the lifestyle That I like to lead which is having a Routine and being able to go out and do Things I'm not so guno about being Behind a screen 247 although I can be But at the same token my strategies Largely revolve around swing trading uh Directionally in terms of catching the Meat of a trend so I'm an ichimoku Trader by trade and so you're mostly Technical analysis based correct yes Does that change ever or do you ever Look for other things other than just Technical analysis yeah so largely from 2015 to I want to say 2019 2020 I was Technical trading ichimoku which is a Trending indicator that helps me capture About 70% of Any Given Trends but as Bitcoin stopped trading the way it used To from you know the 2015 to 2017 cycle I had to learn how to adapt just because I realized my strategy was not working As well as I'd liked I was capturing Moves but a lot of the times price would Just chop around and range um so I had To figure out what would be the next Best thing so that's kind of where I Started researching and diving into

Liquidity um and that's kind of where my Trading is evolved to today so my first System that I use to trade Trends is Ichimoku but when price is largely range Bound like it's been you know the last Couple of weeks that's when I pivot to a Liquidity based system that I call Liquidity Theory interesting do you want To go into the liquidity Theory a little Bit more yeah absolutely so when I was Trading on bitmex um in college I Realized that when price was kind of Stuck in a Range the way price would Move up or down was largely doing part To the liquidation of overleveraged Retail Traders I'd see this on a chart And I'd you know see the bitm spot shout Out liquidation of you know one or two Million at this price point and I just Think to myself well who's buying at These prices why are they getting Liquidated for such large amounts of Money but then it made sense to me that In order for a larger Trader participant In the space to kind of fill a position Let's say it's a 9 uh 10 figure position You need to engineer liquidity most Often times the way to engineer Liquidity within a range is to quote Unquote sell below a support level Trigger a bunch of retail stops cause a Liquidation Cascade and it's only at That point when you get these Liquidation Cascades that larger parties

Quote unquote whales are able to Engineer and fill larger N9 10 figure Positions I noticed this and then over The last couple of years I've kind of Developed a system around this how to Anticipate these quote unquote liquidity Pools as I call them and then tra trade Them to the upside or downside in Relation to the price and how did you Learn all of this so I'm self-taught Completely I was kind of just getting my Feet wet in the markets I learned by Liquidating myself over and over again On bitmex back in the day and it's just Been a journey of self-discovery I've Looked at YouTube videos I've uh traded The markets for long enough that I've Kind of built the system around my own Experience and I think I largely do in Part the fact that I'm a big advocate For journaling so I try to journal every Single trade and then make assessments What I did well what I did wrong and Then go back back and refined so I think It's just been the culmination of my Ability to really be honest with myself And kind of see where I do well see Where I do poorly and then kind of Retroactively try to make adjustments What has been the hardest part learning To trade for you definitely the mental Aspect right so taking losses I think Was the toughest part for me initially Just because um I think the worst thing

A Trader can have early on is Success Actually because if you're you make a Lot of money early on into your trading Jour Journey you conflate luck with Skill and that's a deadly sin for a Trader when they think that they know it All but they've only been in the markets A few months and all of a sudden they Start sizing up on trades and then lo And behold one day the market will bite You back in the butt I think the hardest The mental aspect as a discretionary Trader so I'm a you know I'm a retail Pointand click I don't have any Algorithms I do use tools but at the end Of the day you know I'm using the Derivatives or margin exchanges UI to Execute on my trades so learning how to Grapple with my own self right so as a Discretionary Trader it's you versus you Versus the market and if you don't Conquer yourself you're going to have a Tough time Conquering the markets as Well so you touched on this a little bit But it's a slightly different question How did you figure out your Edge H That's a great question so I think it Was probably two or three years into my Trading Journey that I stumbled across a Trader from the Forex markets named Chaos Trader 63 and he had this ichimoku Strategy called the edge to edge and it Seemed like it worked very well in FX Markets so when I tried to apply it to

Bitcoin I was able to catch the 2018 Bottom before the 2019 runup to 13,000 Very early on and I think that's what Kind of made a name for myself on Quotquot crypto Twitter so it was really Just a serendipitous um experience that Trading a bunch and then finally finding A strategy applying it to these markets And it worked and then I saw it continue To work over a longer period of time so I think that's why I discovered my Edge In trending markets in terms of Discovering my Edge in you know range Bound markets that was also Serendipitous because you know I had This theory of liquidity Theory and it Made a lot of sense but it wasn't until I was approached by a company that Actually does has a toolkit for actually Identifying liquidity in real time being Able to actually piece together what I'm Thinking about but also seeing in real Time and that happened end of 2020 so That I think that's when I discovered my Edge in the range bound markets Interesting uh what company is that uh This is high block Capital ah Interesting last part in this segment What what are your thoughts on trading Psychology as a discretionary Trader I Think you need to consider yourself a Superstar athlete and you need to train Yourself like a Superstar athlete in Order to be successful and I'm only

Speaking about discretionary I don't Know what it takes to be an algorithmic Trader when you have algorithms and Machine learning processes that help you Improve your trading but from a trading Psychology standpoint I'm a big fan of Meditation I think that's one of the key Pieces of why I've been able to maintain My Edge and maintain my profitability Over the years because again it's you Vers you versus the market so if you're Not in tune with yourself you don't take Care of your body your mental health Your physical health your spiritual Health um you're trading with a Disadvantage so I think trading Psychology plays a big role in a Trader's ability to have longevity in The space everyone who enters the space As a Trader you know makes a bunch of Money during Bitcoin Bull Run they think They're a genius but most of them Unfortunately end up giving it back um If not more by the end of that cycle and That's because they don't inherently Understand themselves they're just going With the market which is fine but at Some point the market Market turns Against you and you need to learn how to Take losses how to you know basically Manage your risk I think that's the Overarching point SO trading psychology And risk management I think are the two Primary points that need to be managed

In order to be a successful Trader Moving into the next segment the next Segment is called the next Bull Run how Will you know if Bitcoin moves into a Bull market what are you looking for That might give you confidence that it May have switched into a bull market Again bull markets and bare markets are Very similar they're just uptrends and Downtrends I think we're in a quote Unquote Bitcoin bull market right now However I don't think the magnitude and The Euphoria and the just pure greed That we've seen over the last couple Years is back yet how we know that we're Back there is likely when you start Seeing retail mom and pop your grandma Your Barber your you know Uber driver Talking about Bitcoin again that's Probably a good indication that we're Back quote unquote but yeah I really Think that the Bitcoin bullmark at how I'll know we're back is when we're Trading probably back above 40 50,000 Earlier on you said if I'm not staken You mentioned that you don't think we're Technically in a Bitcoin bare Market but We were transitioning so are we kind of In a transitionary period or in your Mind is there just Bull and be yeah Exactly so in in my mind there's four Parts right right there's a there's a Bull market which is quote unquote an Uptrend you have distribution which is

Quote unquote the top then you have the Bare Market which is just a downtrend And then you have this accumulation Which is the bottom right so I think We're transitioning out from the bottom Into out of this accumulation phase into This uptrend but I don't think we're Necessarily out of this accumulation Phase so although we've had you know a Significant price appreciation over the Last couple of months since the new year Um I don't think we're necessarily in a Full-blown bull market where everything Is just straight up up only and what are You looking for on bitcoin's chart as You form your opinions a lot of times I'm a technical Trader so I I rely on Market structure to kind of dictate Where we are within the broader High Time frame Spectrum as long as I'm Seeing higher highs and higher lows on Bitcoin um you know the low at 16,000 500 whatever that's like the higher low Um the higher high right now is 25,000 So as long as we stay within those Parameters I think we're in accumulation If we start going higher then I will Reconsider and potentially think we're In a bull market but again in my mind This is still an echo bubble we're Within a larger $110,000 range from 15,000 to 25,000 if we deviate to 28 31,000 and then go back into the range Below 25,000 I'll think my thesis that

We're in the Echo bubble will be Validated but if we start trading Significantly higher in the 30,000 and We keep making higher lows above 30,000 Then I'll reconsider and think that We're in a full-blown bull market Interesting I think you sort of answered This in the last question but how will You look to try and figure out the Timeline of bitcoin's next Bull Run yeah So that's largely based around the Halvening event we usually price on the Bitcoin usually appreciates going into I Want to say about 270 days before that Event leading up to the event and then Once the event happens it's usually like A very dull period where price just Chops around I'm really just basing it On time I want to say a year and a half From now will most likely already be in A bull uh Bitcoin Bull Run interesting And uh you mostly trade crypto correct Correct I only trade crypto I don't Trade equities or anything else gotcha What role do you think Bitcoin plays as An asset why do you think people are Willing to invest in it yes the belief To me is that Bitcoin is really just an Alternative asset class whether that's For institutions for hedge fund managers For your mom and pop shops who whoever The case may be it's an alternative Asset class similar to Gold similar to Other uh risk on assets and it tends to

Trade like a risk-on asset so I think It's really just another checklist for Fund managers institutions to say hey we Added this to our you know risk adjusted Returns this is part of our portfolio Now as a inflationary hedge store of Value whatever the thesis may be it's Largely driven about the fact that There's a new asset class it trades 247 365 and has more volatility than most Markets so do you think its role as an Asset will ever change as an alternative Asset class I think it'll stay that way Now if we want to argue that Bitcoin is Digital gold is it a store of value I Think that's fundamentally changing to This day right I think we have this Whole new thesis that you can put Ordinal nfts on Bitcoin blockchain now Whether that holds water I don't know But I do think for the large part and One of the reasons that I kind of Entered the asset class was as a quote Unquote store of value do you think People change how they view Bitcoin and Why they might think it's valuable I'd Like to think it's going to continue Evolving a lot of the events that have Happened over the last several years Have changed my mind about Bitcoin in The sense that before it was just this Risky asset that went up a tremendous Amount then the bubble would pop and Then it would go down a tremendous

Amount and it was just this you know Quote unquote Ponzi scheme that people Were investing in making losing lots of Money but as it gains more institutional Adoption and funds are starting to trade It and even invest in it in hold Different for long periods of time you See uh companies like micro strategy Putting their treasury in it right Taking big bets on bitcoin I think you Will continue to evolve and to what I Can't say but I do believe that the Crypto landscape is still pretty nent I Don't think we've hit critical mass in The way that it's adopted but Bitcoin is In my opinion is not going to be you Know the transactional currency of the Future but it will remain and serve as a Hedge for Traders and institutions alike Interesting well thank you I think that That about reps up thank you so much for Jumping on the show there was a lot of Uh really awesome concise answers Awesome I appreciate you having me all Right thanks for tuning in to crypto Trading Secrets presented by coin Telegraph we'll catch you next Time