Crypto's Turning Point: Why the Next 6 Months Could Change Everything

Hello and welcome to Being Exponential. Today in our stocks episode, we won't be covering stocks. We're going to be uh covering a re-emerging sector, cryptos. All right, we're going to start off with Bitcoin. Luke, let's uh let's see what you've been seeing for the past couple weeks. >> Right. So, uh last week's episode, I said that, okay, Bitcoin, you know, Trump said we're had this big summit with the crypto execs. We're going to buy crypto, but I wasn't really bought into the bounce because we didn't really have technical confirmation. We're still kind of waiting fundamental confirmation. You know, we can talk about buying Bitcoin all we want, but let's see the walk behind that talk to actually buy Bitcoin government. And we're still waiting on the Clarity Act thing, which is going to I think September 15th. Uh there's been no Democrat support yet, but we need six Democrats, I believe, to jump over and support it for it to pass. That was my theory last weekend. But what I am, if nothing else, is somebody that listens to the data and the data on the last week on the technical front. So fundamentally not much has changed from last week but price leads fundamentals. We know that people price things into the market before those things actually happen. Which is why technicals are a very useful thing to pay attention to. Technical information is a very useful thing to put stock in when you are investing. The technical evidence over the last week has shifted meaningfully positive for cryptos in a manner which suggests that the crypto winter may indeed actually be over. The bottom may indeed actually be in for this cycle and that the fifth boom cycle may indeed actually be beginning. So, I am as of last Friday when I took a real big deep dive into the evidence officially very bullish on cryptos over the next one to two years on Bitcoin over the next one to two years. I think a new boom cycle has begun. >> Love to see it. So, Bitcoin currently at 78,000. Are we predicting it comes back to its $120,000 highs? >> It probably goes higher. So, let's talk about the technical evidence. So, the technical evidence here, the first big thing that happened was a commanding retake of the 200 day moving average, which I have pulled up for you here. The white line is the price of Bitcoin. The yellow boulder line is the 200 day moving average. As you can see right here, last week we just shot above the 200 day and have not looked back ever since. That is really, really, really bullish. As you can see, visually, we're going to go over the numbers in a second, but visually, every time that Bitcoin loses its 200 day and then commandingly retakes it, that is an inflection point in the cycle from bus cycle to boom cycle. So, let's go back to the the 20 the postcoid era, right? We had this big surge. We lost the 200 here and then we retook it, got the high, but then we lost the 200 day moving average in January of 2022 and then we turned it into resistance and it just dropped and dropped and dropped and dropped and dropped until in January February of 2023, we retook the 200 day moving average and never looked back and boom, a new boom cycle started which took Bitcoin from a low of 156,000 to a high of 120,000 not too long ago. Well, let's look at the the cycle before that. This one's a little wonkier because you have the COVID nonsense in there. But look here. We lost the 200 day moving average in March of 2018 or February 2018, turned it into resistance and boom, drop, drop, drop, drop, drop, bust cycle, crypto winter. Then in March or April of 2019, we commandingly retook the 200 day, never looked back. Boom cycle started. Then it hit some chop because of COVID. Okay, I think you kind of got to throw that out because it was COVID an extraneous one-time thing. But excluding this little hiccup here. It was up up and away from a low of back here around 3 4,000 to a high as we know of the mid60,000s by 2021. Now let's look at the cycle before that. Cycle be Oops. Let's go here. Okay. Cycle before that. You can see we lost the 200 day moving average in April of 2014. tried to retake it, bounced around it, lost it, and then just declined, declined, declined. Big crypto winter. But then we retook it in July of 2015. Whips saw below it, but then came right back above it. And boom, that started the next boom cycle where we went from a low of about 200 bucks to a high of $20,000 in December of 2017. And then we can look at the first boom cycle. So, we lost it here in September. No, August, no, September of 2011. And then we boom, lost it, tried to take it back, couldn't take it back, and then finally retook it here in May of 2012. And boom, look, that was the beginning of yet another big boom cycle from five bucks all the way up to about $1,100,00. So you can see visually every time Bitcoin loses its 200 day moving average and then spends several months below it and then pops back above it after several months below it. That is a major inflection point in the cycle tends to foreshadow big boom cycles that are on deck. Now the numbers on this are even better. I sent you the chart that we made for our subscribers. Love to show it to everybody right now. This is the 200 day reclaim putting numbers behind the visuals I just sent you in 2015. We spent 10.6 months below it. We reclaimed it at 257, the 200 day moving average. So this what this gra what this shows is every time Bitcoin retook its 200 day moving average after spending nine or more months below it. So the first reclaim was 2015 10.6 months below reclaim price of 257. We whipsawed around for a little bit. Over the next three months, we were down 9%, but over the next six months, we were up 62%. Over the next 12 months, we were up 153%. And over the next 24 months, we were up 895%. The second big reclaim was 2019. After spending about a year below that 200 day moving average, the rec reclaimed price was 4,900. We whipsawed around for a little bit, but over the next three months, we were up 116%. Over the next 6 months we were up 64%. Over the next 12 months we were up 36%. A bit of a a drop there because of COVID. But then over the next 24 months we were up 1,098%. Then most recently 2023 after spending just over a year below the 200 day moving average. We reclaimed it at $19,935. It was a clean break. Over the next three months we're up 53%. 6 months you're up 52%. 12 months you're up 115%. and 24 months we were up 374%. So if you look at the six-month, 12-month, and 24-month forward returns from what just happened, a reclaim of the 200 day moving average after spending ner months more below it. 100% of the time we were higher six months later with an average return of 68%. 100% of the time we were higher 12 months later with an average return of 100%. And 100% of the time we were up 12 months later with an average return of 790%. Yes, a small sample size. Yes, there's some whipssaw action. But ultimately, this action that we are seeing in Bitcoin that we just saw is historically always consistent with a turning point in the cycle. That is very, very bullish. >> Yeah, this all looks very promising. I'm already uh you know making my transfers to purchase some more Bitcoin. But my question here is uh September 15th we have the Clarity Act uh legislation voting. Do we think it is going to be a a force multiplier? If it passes and then if it doesn't pass, what kind of effect will that have on the uh this Bitcoin trajectory? >> If it passes, it's a force multiplier. We go up to 100,000 overnight. If it doesn't pass, we retest the 200. If you look at that data, the 200 day reclaim, it it's not clean. It's noisy. In the short term, it's noisy. In the long term, it's clean. 6 months hence, 12 months, hence, 24 months, hence, it's clean. It's always higher. Big big returns. But in the short term, over like a one week to 12 week period, it's messy. It's noisy. Oftentimes, we have to come back and retest that 200 day moving average. If we look at here that August or that early 23 break, we bursted above, then we had to go back down and retest the 200 and then we bounced back above it. If we look back here during the COVID era, you know, ignoring the COVID drop, we did have this massive breakout and then we had to come back and retest just below the 200 and then retake it. If we look back here in the mid 2015 cycle, we retook it, but then we had to come back quite a bit after the down 200, but had to come back quite a bit. So, very often what happens is after these clean retakes or after these big retakes, we have to come back and we have to test either somewhere just above or right at the 200 day. Considering we're at 78,000, the 200 day is only at 69,000. I think it's pretty likely that, you know, if I I think what'll happen is it won't pass and we're going to that's going to be a retreat back down to 70,000, but then we're going to show support there because there's going to be hope for what can come next and then, you know, the boom cycle is going to continue. So, I think what happens is it doesn't pass. We come back down to 70, retest with 200, and then bounce there. That's probably your entry point. That's probably like your best buying opportunity. If you missed the one, you know, two weeks ago, which a lot of us did, um I think that retreat 70 is probably going to be your your best buying opportunity. Now, the the another technical signal that I'm waiting for is the 50we. So, this is another chart here. You have the price of Bitcoin in white and then you have the 50week moving average in pink. Now, the 50week moving average is a bit more of an allcle signal. The 200 day again it's it's noisy in the short term but the 50we is like a really really really powerful signal as you can see here when we finally retook the 50we in March of 23. So it always happens a little bit later but when it does happen it provides more ump. So we retook that in in March February 23 and then boom it was kind of pretty much up and away from there. Um we retook it here in May of 2019 and it was pretty much up and away from there outside of the co drop. uh we retook it here in what was this October or November of 2015 and was pretty much up and away uh from there. Here we retook it only slightly and then lost it. But once we commandingly retook it here in July of 2012, it was up up and away from there. So the 50we is kind of like the more surefire all clear signal that I'm waiting for. That's right around 81,000. So getting a weekly close above 81,000 would be pretty bullish. What that would also do is it would take out this high from back here in um in May of 26. That high was right around $81,000. That's important because it would end this trend of lower highs and lower lows. Suddenly, we're putting in a higher high or above this. That would be awesome. So, a weekly close above 81,000 would be like, okay, I'm feeling really good about Bitcoin with the 200 day reclaim, but I admit it's it's a small sample size and it's noisy data in the short term. A weekly close above 81 where we retake the 50we moving average and take out this high from May of 26. That's that on top of the 200 day reclaim is a lot of technical evidence to say you got to get bullish right now. >> Excellent. So, there's been a lot of movement in uh some other coins. We're seeing 30% plus movement in things like Ethereum, Solano, uh Ripple specifically. Are there any other coins you're looking at uh more closely with this uh Bitcoin action happening right now? >> Yeah. So, what we're doing right now is we're trying to find um we're trying to find high alpha coins. So, we're trying to find coins that Okay, cryptos are up. Not cryptos. Bitcoin's up a bunch. What's up more, right? what what's leading this rally? What's really um you know at the tip of the spear uh so to speak? Okay, so got our list here. The the ones that are leading the rally, Ethereum is up a bunch, Chain Link is up a bunch, um A is up a bunch, uh Uniswap is up a bunch, Hyperlid is up a bunch, Morpho is up a bunch. These are ones XRP, uh Ripple is is up a bunch. These are names that have been been leading the rally tremendously. Um, Hyperliquid, it's the token of Hyperliquid. It's a high performance perpetuals, derivatives, uh, decentralized exchange that's running on its own custom L1. It's one of the fastest growing onchain trading venues. Fundamentally, a very strong project in our view. Chain link is the dominant oracle network. It's feeding real world data kind of prices and events into smart contracts. It's a critical infrastructure layer mostly for DeFi protocols uh but increasingly for real world assets and tokenization which is something that we're really bullish on with Robin Hood kind of leading that charge. If we're looking for a stock way to play this by the way Robin Hood's my favorite. Um so Hyperlid Chain Link Ethereum we all know Ethereum I think that's just a great kind of the chart on that looks fantastic. Um A is the largest DeFi lending protocol uh by volume. uh poolbased overcolateralized borrowing and lending. It's um it's the incumbent in that space. Morpho is is chasing them decentralized lending infrastructure on Ethereum. Uh it kind of positions itself as the the peer-to-peer uh optimized uh lending layer that other applications like Coinbase build on top of. again they're kind of chasing on the heels of of a so those are sort of names that I'm bullish on as fundamentally sound projects with really healthy technicals that are leading the rally this recovery rally in a way that if this recovery rally is the real deal which we kind of just went over the technical evidence suggest that that it is then these are tokens these are all coins that I think could be some big winners uh in the upcoming breakout for for crypto So that's Hyperliquid, Chain Link, Morpho, A Ethereum. That's kind of like my list of of my favorites. Now, there are some other ones. XRP, we all know what XRP does. I think that's a great one. Uh there are some other ones that are leading that I'm not fundamentally so positive on. Bitcoin Cash has been a big big winner recently. Uh Pepe the Frog has been a a big winner uh recently, but I'm I'm not so much fundamentally positive on those. The ones that I'm fundamentally positive on and which are showing really healthy technical signals are going to be Hyperlquid, Chain Link, Morpho, Ethereum, uh, and a >> All right. Excellent, Luke. Uh, so now I think something a lot of people like when it comes to cryptos is do you have a hailmary play a a particular crypto that it might it might go to zero or it might, you know, go up a,000%. >> Yeah. Everything else out there. >> Valid. That's valid. They they're everything in everything outside of Bitcoin and Ethereum and maybe XRP is a Hail Mary. Like every single one of the altcoins outside of those top three, maybe top four or five. Definitely everything out of the top five is a Hail Mary. It could either go up a thousand% or it can go to zero. So I don't think it makes it I mean what's my favorite Hail Mary in the group? Well, I just gave you a couple that I like. You know those those are Hail Marys. You look at a as a Hail Mary. You look at Morpho as a Hail Mary. Th those are Hail Marys. Everything in the crypto world outside of the big boys is a hailmary. Understand that. Position accordingly. Understand your risk tolerance as it relates to this game. This is not for everybody. So, um yeah, that's my somewhat facitious but also serious answer to your question. >> Understood. So, uh in terms of positioning, if I if I were just a average investor, I had 10,000 to deploy. In terms of cryptos, what what percentage of that should be Bitcoin and what percentage of that should be, you know, the rest >> that I I can't answer. I mean, that's that everybody. >> Yeah. >> If it were me, I would go. If it were me, based on my age, my risk tolerance, my appetite for these things, the amount of capital I have, it would be 50% to Bitcoin, 25% to Ethereum, and 25% to other projects. >> Me? >> Yeah. >> Not for you, for me. >> Yeah. Excellent. I mean, I was thinking along those same lines. Luke, do you think there's anything we missed in terms of the uh the crypto topic uh this week? >> I'll throw up one more chart for you having cycle. So, this graphs Bitcoin during the two previous cycles in the current cycle, current cycle in white, uh the COVID cycles in blue, and then that, you know, 2015 and 2019 cycle is in orange. Uh, as you can see, very similar in terms of timing. We get the having and then you get the boom and then you get the top and then you get the bottom. And according to this timing wise, we should be close to the bottom. This says time bottom happens October 2026. We're in August, late August 26, early September. So, we're a month out. And the reason I'm showing you this is that it is historically consistent that we bottom around here. It's not like, "Oh my god, we're bottoming early or prematurely or like, don't we have longer to go?" No, like this is about where it it should bottom. Um, if you kind of look at when the orange one bottom, that would have been September 26, blue bottoms in October 18th to 26. Like, if you kind of line that up to today's timelines. So, the fact that we're bottoming in August, late August 26, maybe September, totally historically normal. And I just I think that's very important to note here. It's another piece of technical evidence to suggest that indeed the bottom may be in and it may be time to rally. Let's end there. Excellent. All right. Yeah, that that's a that's a great place to end it. Uh thanks for watching this episode. Again, please make sure to like, comment, subscribe, and we'll see you in our Mechro episode on Thursday. Take care.