Prolonged Bear Market, or V-Shaped Recovery?

Ran reminds everyone that you really need to re-test your conviction on whether this is a bull or bear market. If you have conviction that we’re in a bull market, then you trade differently compared to if you think we’re in a bear market.

Ran says that nothing has happened that has changed his conviction that Bitcoin is still the best store of value in an inflationary environment. Bitcoin is still looking better than its competitors: the stock market is overvalued and gold is obsolete technology.

The crypto market had a sharp correction in part due to Elon’s tweeting and China FUD, but it isn’t all unfounded FUD that’s coming from China.

The latest bearish news that China bans Bitcoin mining is actually good for Bitcoin longterm. Less miners in China means the network is more decentralized. China is also notorious for using coal for power, so moving mining away from China addresses Elon’s concern about the lack of green energy-efficient mining. The recent news isn’t just the normal China FUD as it looks like Chinese miners are beginning to sell off their mining equipment: 

Is The Crypto Market Structure Intact? Or Did It Crack?

In a market where you can’t lose, people were taking loans to multiply their gains. These short-term traders got washed out of the market, and the data shows that there’s been a healthy reset on crypto investors taking leverage.

Cathie Wood, Raoul Pal and Willy Woo are all in agreement that the bull market is still intact. Looking at the following structure of crypto market participants, the leveraged traders and retail investors are the ones who capitulated and sold their tokens to the diamond hands. Ran thinks this is very healthy as the participants who held were the strong believers.

Two Viewpoints On The Market: A Stocks Expert & A Crypto Expert

Chris Vermeulen joins the show to give a contrary opinion to Ran's. He thinks that Bitcoin is in the downtrend of the market cycle and past the peak euphoria stage. He notes that most large BTC corrections cap out at around 70%. We’re currently down 53% and so he thinks we could go lower. He thinks that BTC could reach as low as $16K and then consolidate in a range.  He also thinks that a sharp stock market correction is coming, and that will take down the entire market including crypto. He does note that long-term he is still bullish on BTC.

Lisa Edwards has a much more optimistic view of where the crypto market is right now. She notes that BTC has reached the 1.618 fibonacci on the downside and is looking for a bounce up to the $60K range. Lisa says that what stock market traders don’t realize is that crypto has very sharp corrections before continuing back to the upside. Lisa sees a fairly quick recovery for the crypto market and recommends dollar-cost averaging back into coins you believe in.

Ran emphasizes that whether you’re bullish or bearish, you need to focus on good projects and not shit coins. His favorite projects include:

Sheldon is looking for a short term push up to the $42K region, then back down for a bit before a run up to the $48K range. He is also trading alts at the same time as BTC: selling alts when he’s bearish BTC and buying alts when he’s bullish BTC.