1 00:00:00,120 --> 00:00:03,480 Speaker 1: If you've ever wondered what really drives bitcoin's price, there's 2 00:00:03,480 --> 00:00:06,000 Speaker 1: a formula for it, and it's more accurate than most 3 00:00:06,080 --> 00:00:08,440 Speaker 1: people realize. Now, this isn't a guess. 4 00:00:08,680 --> 00:00:13,119 Speaker 2: It's a framework built on data, global equity leverage, and 5 00:00:13,200 --> 00:00:16,960 Speaker 2: investor behavior, the same three forces that have quietly driven 6 00:00:17,120 --> 00:00:20,880 Speaker 2: every bitcoin boom and bus cycle. Now, once you understand this, 7 00:00:21,120 --> 00:00:24,080 Speaker 2: you're going to stop reacting to price and start positioning 8 00:00:24,280 --> 00:00:27,360 Speaker 2: ahead of it, because right now the signals say. 9 00:00:27,280 --> 00:00:31,120 Speaker 1: We're entering a new regime real quick. On Mark Mawson's twenty. 10 00:00:30,920 --> 00:00:35,199 Speaker 2: Sixteen, I've helped millions navigate bitcoin cycles using data, not hype. 11 00:00:35,240 --> 00:00:38,080 Speaker 2: I'm a partner at a leading bitcoin venture fund. I 12 00:00:38,159 --> 00:00:41,519 Speaker 2: advise companies building the future of finance on bitcoin, and 13 00:00:41,640 --> 00:00:43,479 Speaker 2: in this video, I'm going to walk you through the 14 00:00:43,560 --> 00:00:46,360 Speaker 2: same systems and the same signals that we use to 15 00:00:46,400 --> 00:00:47,080 Speaker 2: make decisions. 16 00:00:47,640 --> 00:00:51,639 Speaker 1: How you can use them too. Let's go all right, 17 00:00:51,680 --> 00:00:54,040 Speaker 1: so we're going to dig into the data here. Now. 18 00:00:54,080 --> 00:00:57,880 Speaker 2: In my companies with my team, I tell them always, look, 19 00:00:57,960 --> 00:01:00,640 Speaker 2: we're not in the guessing game, We're in the data game, 20 00:01:00,760 --> 00:01:03,520 Speaker 2: all right. Now, same with bitcoin. People ask me all 21 00:01:03,520 --> 00:01:05,600 Speaker 2: the time, should I buy now? Is there another dip coming. 22 00:01:05,840 --> 00:01:08,440 Speaker 2: I don't know. I'm not in the guessing game. Let's 23 00:01:08,440 --> 00:01:10,040 Speaker 2: look at the data and see what it says. Now, 24 00:01:10,319 --> 00:01:14,320 Speaker 2: what most people get wrong is they think there's this 25 00:01:14,600 --> 00:01:17,960 Speaker 2: illusion of chaos like either one. They look backwards to 26 00:01:18,000 --> 00:01:19,760 Speaker 2: the chart and go, wow, bitcoin looks very predictable. I 27 00:01:19,800 --> 00:01:22,360 Speaker 2: should just sell here and buy back here, so simple, right, 28 00:01:22,800 --> 00:01:25,160 Speaker 2: Or they think there's no way to know what's going on. 29 00:01:25,240 --> 00:01:27,600 Speaker 2: But what if it's something in the middle. Now, I 30 00:01:27,640 --> 00:01:30,200 Speaker 2: have this chart up right here. By the way, I'm 31 00:01:30,240 --> 00:01:31,920 Speaker 2: going to be using a lot of charts from Bitcoin 32 00:01:31,959 --> 00:01:34,440 Speaker 2: magazine Pro, i''ll be using a lot from Jamie Coutz 33 00:01:34,600 --> 00:01:36,240 Speaker 2: at Real Vision. I'm gonna be using a lot from 34 00:01:36,280 --> 00:01:38,199 Speaker 2: a lot of different places to show you that there's 35 00:01:38,240 --> 00:01:40,200 Speaker 2: a lot of places to get this data. I'll cover 36 00:01:40,240 --> 00:01:42,080 Speaker 2: that with you, okay, But we can look at the 37 00:01:42,200 --> 00:01:44,720 Speaker 2: history of bitcoin since twenty eleven and you can see 38 00:01:44,760 --> 00:01:46,479 Speaker 2: we have a high right here, and then it goes 39 00:01:46,480 --> 00:01:48,000 Speaker 2: all the way down low, and then it comes high 40 00:01:48,040 --> 00:01:50,040 Speaker 2: and goes low again, goes high and comes down low. 41 00:01:50,360 --> 00:01:52,080 Speaker 1: Now, of course it always trends up. 42 00:01:52,080 --> 00:01:54,480 Speaker 2: So if you just bought here and waited ten years, 43 00:01:54,560 --> 00:01:55,840 Speaker 2: but nobody can wait ten years. 44 00:01:55,920 --> 00:01:58,400 Speaker 1: So they're trying to buy here, sell here, buy here, 45 00:01:58,440 --> 00:02:00,680 Speaker 1: sell here, etc. Right, So it looks very chaotic. 46 00:02:01,120 --> 00:02:03,480 Speaker 2: So what some people do is they think, well, what 47 00:02:03,520 --> 00:02:05,640 Speaker 2: about if we use on chain data. 48 00:02:05,760 --> 00:02:07,160 Speaker 1: So we're going to go through this. 49 00:02:07,240 --> 00:02:09,160 Speaker 2: So there's some on chain indicators that we can look 50 00:02:09,160 --> 00:02:11,880 Speaker 2: at to help us understand the way bitcoin moves. We 51 00:02:11,960 --> 00:02:14,760 Speaker 2: look at technical analysis. A lot of people think technical 52 00:02:14,760 --> 00:02:17,800 Speaker 2: analysis is the way to go, and so you know, well, 53 00:02:17,800 --> 00:02:20,040 Speaker 2: we have to look at the five repeating patterns and 54 00:02:20,080 --> 00:02:22,120 Speaker 2: have to repeats then it consolidates. Here it right, So 55 00:02:22,160 --> 00:02:24,440 Speaker 2: there's like I call it reading the tea leaves. They 56 00:02:24,440 --> 00:02:27,560 Speaker 2: think they can do that. However, for most people this 57 00:02:27,600 --> 00:02:31,359 Speaker 2: is like technical analysis. More like this. Yeah, you can't 58 00:02:31,360 --> 00:02:34,320 Speaker 2: make sense of that, right. So maybe it's on chain indicators, 59 00:02:34,360 --> 00:02:37,919 Speaker 2: maybe it's technical analysis, maybe it's macro trends. Okay, all 60 00:02:38,000 --> 00:02:40,280 Speaker 2: of those are important. We want to be looking at 61 00:02:40,320 --> 00:02:42,200 Speaker 2: all of those. Of course I talk about macro topics 62 00:02:42,200 --> 00:02:46,840 Speaker 2: all the time. But what if the boom, the bitcoin 63 00:02:46,880 --> 00:02:50,720 Speaker 2: boom always begins with three different data points. And if 64 00:02:50,720 --> 00:02:52,799 Speaker 2: we understand these three data points and how to look 65 00:02:52,840 --> 00:02:55,200 Speaker 2: at them, then we can figure out how to navigate 66 00:02:55,400 --> 00:02:57,519 Speaker 2: the bitcoin cycles. Okay, well do you want to know 67 00:02:57,560 --> 00:03:01,160 Speaker 2: what those are? Let's break them down now. I call 68 00:03:01,240 --> 00:03:04,320 Speaker 2: this the hidden engine. Now, the hidden engine is what 69 00:03:04,360 --> 00:03:07,880 Speaker 2: I'm calling a formula, a formula of how to understand 70 00:03:07,880 --> 00:03:10,000 Speaker 2: this all right, Now, I'm just gonna stay real quick. 71 00:03:10,040 --> 00:03:13,239 Speaker 2: Disclaimer again, nobody knows the tops or the bottoms until 72 00:03:13,240 --> 00:03:14,640 Speaker 2: you're looking backwards. 73 00:03:15,240 --> 00:03:16,919 Speaker 1: What we can figure out. 74 00:03:16,720 --> 00:03:20,160 Speaker 2: Is when things get over bought, over sold. We do 75 00:03:20,320 --> 00:03:23,120 Speaker 2: know when they're expensive or when they're cheap, and that's 76 00:03:23,160 --> 00:03:24,040 Speaker 2: what we're going to look at here. 77 00:03:24,120 --> 00:03:24,639 Speaker 1: Okay, So the. 78 00:03:24,560 --> 00:03:27,760 Speaker 2: First thing is that the old sort of driven model 79 00:03:27,800 --> 00:03:31,520 Speaker 2: of sort of bitcoin's forecast its future was either network 80 00:03:31,560 --> 00:03:35,800 Speaker 2: effects from Metcalf's law SOT. Metcalf's law says that as 81 00:03:35,960 --> 00:03:39,720 Speaker 2: each node, as we continue to add nodes, we multiply 82 00:03:39,800 --> 00:03:41,920 Speaker 2: the power of the network. So like one phone's not 83 00:03:42,000 --> 00:03:43,400 Speaker 2: very valuable if no one else in the world has 84 00:03:43,400 --> 00:03:45,600 Speaker 2: a phone, but if everyone has a phone, the phone's 85 00:03:45,640 --> 00:03:48,480 Speaker 2: more viable. Read's law is very similar, except for now 86 00:03:48,480 --> 00:03:51,279 Speaker 2: it's not just the nodes, but it's then the multiplication 87 00:03:51,400 --> 00:03:53,640 Speaker 2: of those nodes down below, so it's more exponential. But 88 00:03:53,760 --> 00:03:56,600 Speaker 2: that's sort of the old model. The new models we 89 00:03:56,640 --> 00:03:58,000 Speaker 2: have are a little bit different. So we're going to 90 00:03:58,040 --> 00:03:58,960 Speaker 2: break it down to three. 91 00:03:59,280 --> 00:03:59,680 Speaker 1: Fuel. 92 00:04:00,080 --> 00:04:02,560 Speaker 2: This is the global liquidity, and there's two ways we 93 00:04:02,640 --> 00:04:05,920 Speaker 2: have to look at this, GLI and GRS. 94 00:04:06,120 --> 00:04:09,680 Speaker 1: Okay, I'm gonna break those down. And this has about moves. 95 00:04:09,680 --> 00:04:12,720 Speaker 2: About seventy five percent of bitcoins moves are driven by 96 00:04:12,720 --> 00:04:13,360 Speaker 2: these two things. 97 00:04:13,800 --> 00:04:14,600 Speaker 1: Now, that's the fuel. 98 00:04:14,640 --> 00:04:16,680 Speaker 2: Then we have the pedals, the gas and the brake, 99 00:04:17,200 --> 00:04:21,200 Speaker 2: and that's really the leverage that goes into the system. 100 00:04:21,560 --> 00:04:23,599 Speaker 2: And then we have the valves, the blow off valves, 101 00:04:23,640 --> 00:04:27,200 Speaker 2: the reliefs valves, and this is the profitability behavior. And 102 00:04:27,240 --> 00:04:29,159 Speaker 2: we can look at this through on chain data. All right, 103 00:04:29,200 --> 00:04:31,800 Speaker 2: we're gonna break all this down. Buckle up, turn off 104 00:04:31,800 --> 00:04:34,279 Speaker 2: all your distractions, get a notepad, write this down. 105 00:04:34,440 --> 00:04:39,880 Speaker 1: Let's go. All right, So the first thing is the fuel. 106 00:04:40,000 --> 00:04:42,320 Speaker 1: This is what feeds the engine. All right, we're talking 107 00:04:42,360 --> 00:04:45,200 Speaker 1: about GLI and GLS. Now, a lot of people get 108 00:04:45,240 --> 00:04:47,279 Speaker 1: this wrong, so let me break it down for you. 109 00:04:47,400 --> 00:04:52,080 Speaker 2: GLI stands for global liquidity, global equity. Now where a 110 00:04:52,120 --> 00:04:54,440 Speaker 2: lot of people get this wrong is they look at 111 00:04:54,839 --> 00:04:55,600 Speaker 2: USM two. 112 00:04:56,000 --> 00:04:57,200 Speaker 1: But we're talking about global. 113 00:04:57,200 --> 00:04:59,599 Speaker 2: Bitcoin is a commodity, it's a global asset, and we 114 00:04:59,640 --> 00:05:02,560 Speaker 2: want to look at the global liquity. Now, I believe 115 00:05:02,600 --> 00:05:05,880 Speaker 2: the absolute master in this game is Michael How. I 116 00:05:06,000 --> 00:05:08,719 Speaker 2: reference his work all the time. He writes a newsletter 117 00:05:08,760 --> 00:05:11,359 Speaker 2: called Capital Wars. It's a paid subscription. I'm gonna be 118 00:05:11,360 --> 00:05:13,360 Speaker 2: referencing a lot of stuff from paid subscriptions that I 119 00:05:13,400 --> 00:05:15,320 Speaker 2: have because I pay for data. You might want to 120 00:05:15,320 --> 00:05:17,919 Speaker 2: pay for data as well Capital Wars Michael How or 121 00:05:17,960 --> 00:05:19,559 Speaker 2: you can just continue to subscribe it to my channel 122 00:05:19,560 --> 00:05:21,360 Speaker 2: and I'll break it down for you. But he talks 123 00:05:21,360 --> 00:05:24,360 Speaker 2: about the impact of global liquidity. He says, the biggest 124 00:05:24,360 --> 00:05:28,760 Speaker 2: and most direct impact comes from global liquity. It seems 125 00:05:28,760 --> 00:05:30,200 Speaker 2: like we should be paying attention to it. Let me 126 00:05:30,480 --> 00:05:33,080 Speaker 2: let me tell you why. All right, So we don't 127 00:05:33,120 --> 00:05:36,239 Speaker 2: want money, We want goods and services. Goods and services 128 00:05:36,279 --> 00:05:39,159 Speaker 2: a wealth. So when the government prints more money sends 129 00:05:39,160 --> 00:05:41,400 Speaker 2: it out a stemmy, that doesn't make more wealth. 130 00:05:41,440 --> 00:05:43,600 Speaker 1: They can't print wealth. So what we really have is 131 00:05:43,640 --> 00:05:44,400 Speaker 1: all the money. 132 00:05:44,160 --> 00:05:46,160 Speaker 2: Of the world divided by all the goods and services 133 00:05:46,160 --> 00:05:49,720 Speaker 2: of the world. As they print more money, the value 134 00:05:49,800 --> 00:05:51,640 Speaker 2: or the price of those goods and services go up. 135 00:05:51,839 --> 00:05:53,360 Speaker 1: So if we look at liquidity. 136 00:05:53,080 --> 00:05:55,600 Speaker 2: As they increase it, then we know that it has 137 00:05:55,680 --> 00:05:57,760 Speaker 2: to go somewhere, and it's going to go into these assets. 138 00:05:57,839 --> 00:05:59,920 Speaker 1: They're going to go up. That's why it's the driver. Okay, 139 00:06:00,120 --> 00:06:03,599 Speaker 1: this is the leading indicator, not a lagging indicator. Okay. 140 00:06:03,600 --> 00:06:06,200 Speaker 1: So he says it's the most important thing global equity. 141 00:06:06,400 --> 00:06:09,960 Speaker 2: He says that bitcoin is not a substitute for global equity, 142 00:06:10,040 --> 00:06:11,680 Speaker 2: not a substitute. 143 00:06:11,080 --> 00:06:12,719 Speaker 1: But rather it's a barometer. 144 00:06:12,800 --> 00:06:14,240 Speaker 2: So it's a way to read it, a way to 145 00:06:14,279 --> 00:06:16,480 Speaker 2: gauge it right, way to tell us what's going on. 146 00:06:17,200 --> 00:06:19,440 Speaker 1: What's more, is it is a truly global asset. 147 00:06:19,480 --> 00:06:21,440 Speaker 2: Again, Bitcoin is a global asset, so we can see 148 00:06:21,480 --> 00:06:24,920 Speaker 2: what's going on with India and China and Japan, not 149 00:06:25,000 --> 00:06:28,240 Speaker 2: just the United States. Whether China prints money or the 150 00:06:28,320 --> 00:06:31,799 Speaker 2: US FED inject's liquidity. Either way, the price of bitcoin 151 00:06:31,800 --> 00:06:35,279 Speaker 2: should rise. It's the most sensitive asset to global liquidity, 152 00:06:35,600 --> 00:06:37,480 Speaker 2: all right. It's like a sponge, just soaks it up. 153 00:06:38,200 --> 00:06:40,680 Speaker 2: A little bit more from Michael Howe again the king 154 00:06:40,760 --> 00:06:43,920 Speaker 2: of global equity in my mind. In this article is 155 00:06:43,920 --> 00:06:45,960 Speaker 2: a two P series. He was writing Bitcoin and global liquidity. 156 00:06:46,240 --> 00:06:49,559 Speaker 2: He says that debt denominates wh're talking about global equity. 157 00:06:49,600 --> 00:06:51,080 Speaker 2: A lot of people want to know what is it 158 00:06:51,600 --> 00:06:53,599 Speaker 2: and where you go wrong is just looking at M two. 159 00:06:53,800 --> 00:06:55,919 Speaker 2: It's a very rough way to look at it. But 160 00:06:56,040 --> 00:06:59,400 Speaker 2: because we're in a debt based monetary system, all money 161 00:06:59,440 --> 00:07:03,120 Speaker 2: is created through debt issuance, debt creation, So we want 162 00:07:03,120 --> 00:07:04,960 Speaker 2: to be looking at debt. Okay, So we want to 163 00:07:04,960 --> 00:07:06,880 Speaker 2: look at the money, Yes, we want to look at 164 00:07:06,920 --> 00:07:11,360 Speaker 2: the availability of credit, the availability the ability. 165 00:07:10,880 --> 00:07:13,440 Speaker 1: For central banks to create more money. Okay. So it's 166 00:07:13,480 --> 00:07:14,960 Speaker 1: that debt dominates. 167 00:07:15,040 --> 00:07:17,960 Speaker 2: So what he's saying here is that currently in our system, 168 00:07:17,960 --> 00:07:20,559 Speaker 2: in this debt based monetary system, debt never gets paid, 169 00:07:20,760 --> 00:07:25,400 Speaker 2: it never gets extinguished, instead refinancing existing debts. So we 170 00:07:25,440 --> 00:07:27,600 Speaker 2: always refinance, if we kick the can down the road, 171 00:07:27,920 --> 00:07:31,200 Speaker 2: refinancing an existing debt. With about seventy five percent of 172 00:07:31,240 --> 00:07:37,800 Speaker 2: transactions now involving debt rollovers, this creates a dependency on collateral. 173 00:07:38,080 --> 00:07:42,160 Speaker 2: This is why we can have no deflation when debt 174 00:07:42,200 --> 00:07:45,080 Speaker 2: is issued. So money is created through debt issues. The 175 00:07:45,160 --> 00:07:50,800 Speaker 2: debt is the asset, The dollars are the liability, the debt. 176 00:07:50,640 --> 00:07:51,239 Speaker 1: Is the asset. 177 00:07:51,480 --> 00:07:54,640 Speaker 2: So the debt becomes the asset or collateral for more debt. 178 00:07:54,680 --> 00:07:56,720 Speaker 2: That's what he's saying right here. So we have to 179 00:07:56,920 --> 00:07:58,920 Speaker 2: roll the debt over. We can't pay the debt off 180 00:07:58,920 --> 00:08:01,280 Speaker 2: because it's collateral for more debt, so it has to 181 00:08:01,280 --> 00:08:05,240 Speaker 2: get rolled over. It creates a dependency on collateral. We 182 00:08:05,280 --> 00:08:08,600 Speaker 2: can't have a deflation, it says I e. Global liquidity. 183 00:08:09,240 --> 00:08:13,200 Speaker 2: The financial system is trapped in a debt refinancing loop. 184 00:08:13,440 --> 00:08:14,920 Speaker 1: So we're trapped. We have to. 185 00:08:14,920 --> 00:08:16,920 Speaker 2: Continue to roll it over. And in order to roll 186 00:08:16,920 --> 00:08:19,240 Speaker 2: it over, we have to create more of it. Right, 187 00:08:19,320 --> 00:08:23,040 Speaker 2: we're trapped in the system. There's two ways out. We 188 00:08:23,120 --> 00:08:26,720 Speaker 2: continue forward inflating the system in a debt based monetary system, 189 00:08:26,880 --> 00:08:29,559 Speaker 2: or we let the whole thing collapse and crash and 190 00:08:29,600 --> 00:08:32,360 Speaker 2: we start over. Now, there's no politician in the world, 191 00:08:33,040 --> 00:08:36,720 Speaker 2: or banker or elite or whoever that may have any controller, say, 192 00:08:36,840 --> 00:08:39,200 Speaker 2: is going to allow this system to crash and see 193 00:08:39,200 --> 00:08:42,160 Speaker 2: what happens next. It's always going to be continued. That's 194 00:08:42,160 --> 00:08:44,920 Speaker 2: why we're trapped in the system. Policy makers need to 195 00:08:45,080 --> 00:08:47,839 Speaker 2: continually expand liquidity. 196 00:08:48,840 --> 00:08:51,080 Speaker 1: Right, so all those doomers. 197 00:08:50,679 --> 00:08:53,240 Speaker 2: Out there that are calling for this market crash, they 198 00:08:53,320 --> 00:08:56,760 Speaker 2: don't understand the basics of the system that we're in. Okay, 199 00:08:56,800 --> 00:08:58,520 Speaker 2: let's go a little bit deeper and now Michael Hole 200 00:08:58,640 --> 00:08:59,360 Speaker 2: uses these charts. 201 00:08:59,360 --> 00:09:02,280 Speaker 1: I use them all the time, so you probably recognize these. 202 00:09:02,480 --> 00:09:05,600 Speaker 2: This is the global equity going back to twenty twenty one. 203 00:09:06,040 --> 00:09:07,160 Speaker 1: So it went up and then. 204 00:09:07,040 --> 00:09:09,160 Speaker 2: We had this big crash here in twenty twenty two. 205 00:09:09,200 --> 00:09:10,840 Speaker 2: October twenty two was when we were in like that 206 00:09:10,880 --> 00:09:13,079 Speaker 2: bear market. Everybody's saying the world's going to end, the markets, 207 00:09:13,080 --> 00:09:15,760 Speaker 2: we're all crashing down. I started making videos saying there's 208 00:09:15,760 --> 00:09:18,760 Speaker 2: no market crash coming. Here's why, And it was because 209 00:09:18,880 --> 00:09:21,960 Speaker 2: of this liquidity cycle starting now. You can see here 210 00:09:22,040 --> 00:09:24,440 Speaker 2: is just since this year, and we've had a big 211 00:09:24,520 --> 00:09:26,960 Speaker 2: run up in global equity this year as well. Again, 212 00:09:27,040 --> 00:09:29,240 Speaker 2: these charts are from Michael Howe. Okay, now here's another 213 00:09:29,320 --> 00:09:31,200 Speaker 2: chart on global equity. I mean, you can just go 214 00:09:31,200 --> 00:09:33,920 Speaker 2: Google searches and find any number of charts. I like 215 00:09:34,000 --> 00:09:35,679 Speaker 2: this one here because it kind of shows us a 216 00:09:35,720 --> 00:09:38,640 Speaker 2: couple different levels here. So in the green right here 217 00:09:38,720 --> 00:09:42,560 Speaker 2: is the global M two growth. The blue line is 218 00:09:42,600 --> 00:09:45,280 Speaker 2: the global M two supply, the money supply, and then 219 00:09:45,320 --> 00:09:47,560 Speaker 2: we're overlaying it with the orange of the red line, 220 00:09:47,559 --> 00:09:48,800 Speaker 2: which is the bitcoin price. 221 00:09:49,160 --> 00:09:51,199 Speaker 1: And so what the green is is the year over 222 00:09:51,280 --> 00:09:51,800 Speaker 1: year change. 223 00:09:51,800 --> 00:09:54,480 Speaker 2: So you can see We've had this massive print of 224 00:09:54,480 --> 00:09:55,679 Speaker 2: global equity. 225 00:09:55,600 --> 00:09:58,240 Speaker 1: During the pandemic right twenty twenty twenty twenty one, and. 226 00:09:58,240 --> 00:10:02,120 Speaker 2: So this pushed the p of these assets sky high. 227 00:10:02,440 --> 00:10:04,960 Speaker 2: Global equity went up, the bitcoin price went up because 228 00:10:04,960 --> 00:10:07,960 Speaker 2: of this massive volume here. Then we had this big 229 00:10:08,040 --> 00:10:11,160 Speaker 2: draw down both in global liquidity and in the bitcoin price, 230 00:10:11,640 --> 00:10:15,240 Speaker 2: coming down as the year over year month over month. 231 00:10:15,240 --> 00:10:16,760 Speaker 1: Changed and liquidy drained out. 232 00:10:16,960 --> 00:10:19,640 Speaker 2: And you can see here it's starting to pick back up, 233 00:10:20,000 --> 00:10:22,200 Speaker 2: and of course both of them are turning back up, 234 00:10:22,280 --> 00:10:24,240 Speaker 2: so you can start to see the correlation of this. 235 00:10:24,440 --> 00:10:26,320 Speaker 2: I've done a bunch of videos on this, and you 236 00:10:26,400 --> 00:10:28,760 Speaker 2: have to understand it's also important to realize it has 237 00:10:28,800 --> 00:10:31,280 Speaker 2: somewhere between like an eight to twelve week lag. Most 238 00:10:31,320 --> 00:10:34,360 Speaker 2: people just consider it three months or ninety days. Okay, 239 00:10:34,440 --> 00:10:36,679 Speaker 2: so that's the global liquidity. Here's the chart on Trading 240 00:10:36,760 --> 00:10:38,040 Speaker 2: View again. I just want to show you can get 241 00:10:38,080 --> 00:10:40,760 Speaker 2: these charts from anywhere. I like to pay for my information. 242 00:10:40,880 --> 00:10:42,719 Speaker 2: It's a much faster, easier way to get it. 243 00:10:42,840 --> 00:10:43,959 Speaker 1: But this is just Trading View. 244 00:10:43,960 --> 00:10:45,920 Speaker 2: This is my charting software, and you can see the 245 00:10:45,960 --> 00:10:49,040 Speaker 2: bitcoin price and global liquity, and you can. 246 00:10:48,920 --> 00:10:52,560 Speaker 1: See how closely tied they are together. So these are 247 00:10:52,559 --> 00:10:55,480 Speaker 1: the leading indicators. Okay, global equity. Now the next thing 248 00:10:55,520 --> 00:10:56,360 Speaker 1: we have to understand. 249 00:10:56,920 --> 00:11:02,280 Speaker 2: Remember the fuel is the Global Risk Score, call that GRS. Now, 250 00:11:02,320 --> 00:11:03,760 Speaker 2: this is where we start to get into some of 251 00:11:03,800 --> 00:11:06,680 Speaker 2: the predictive power of what these things tell us, because 252 00:11:06,720 --> 00:11:10,080 Speaker 2: again we're looking for leading data, not lagging tell us 253 00:11:10,120 --> 00:11:12,360 Speaker 2: what already happened. We want leading data tell us what's 254 00:11:12,440 --> 00:11:15,280 Speaker 2: going to happen. Okay, Now these charts are from Jamie 255 00:11:15,320 --> 00:11:18,480 Speaker 2: Counts over at Real Vision. He's an absolute master in these. 256 00:11:19,240 --> 00:11:22,920 Speaker 2: And this is the Global Liquidity Index GLI. And when 257 00:11:22,920 --> 00:11:25,480 Speaker 2: he's talking about the GRS or the Global Risk Score. 258 00:11:25,840 --> 00:11:29,080 Speaker 2: So the Global Riskcore attracts how far biquin's price deviates 259 00:11:29,120 --> 00:11:31,840 Speaker 2: from its liquidity. So if the liquid is driving it up, 260 00:11:32,200 --> 00:11:34,559 Speaker 2: the risk is when it starts to deviate away from 261 00:11:34,600 --> 00:11:35,040 Speaker 2: the liquidity. 262 00:11:35,080 --> 00:11:35,840 Speaker 1: That's what this tracks. 263 00:11:36,160 --> 00:11:40,199 Speaker 2: It's implied fair value based on a regression model regression 264 00:11:40,960 --> 00:11:44,000 Speaker 2: from the liquidy. It says here it shifts GLI Global 265 00:11:44,000 --> 00:11:48,319 Speaker 2: Liquidity from being just a macro backdrop to an actively 266 00:11:48,520 --> 00:11:50,720 Speaker 2: usable risk management tool. 267 00:11:51,400 --> 00:11:52,120 Speaker 1: So for risk. 268 00:11:51,960 --> 00:11:54,600 Speaker 2: Management, the most amateur investors just think about how much 269 00:11:54,600 --> 00:11:56,679 Speaker 2: money can I make? Tell me the hot crypto to 270 00:11:56,760 --> 00:11:58,600 Speaker 2: buy right, and they just want to buy it yolo 271 00:11:58,720 --> 00:12:00,439 Speaker 2: in hopefully you know, aross their fingers. 272 00:12:00,440 --> 00:12:01,480 Speaker 1: They make money. 273 00:12:01,600 --> 00:12:03,960 Speaker 2: But professional investors always want to think about the risk. 274 00:12:04,080 --> 00:12:08,000 Speaker 2: That's the name hedge funds, like hedge hedging, the positions. 275 00:12:08,000 --> 00:12:10,160 Speaker 2: It's always about risk, and so we want to use 276 00:12:10,200 --> 00:12:12,960 Speaker 2: this as a risk management tool. Even when I'm going 277 00:12:13,040 --> 00:12:15,520 Speaker 2: long to make money, I need to know how big 278 00:12:15,559 --> 00:12:18,360 Speaker 2: I should bet, how long I should go based off 279 00:12:18,400 --> 00:12:20,800 Speaker 2: of the risk of that cycle. And that's exactly what 280 00:12:20,840 --> 00:12:22,160 Speaker 2: this is going to break down for. So let me 281 00:12:22,160 --> 00:12:23,839 Speaker 2: show you what we're talking about. Okay, Now, the first 282 00:12:23,880 --> 00:12:27,360 Speaker 2: thing we have to understand is that liquidity, like most 283 00:12:27,400 --> 00:12:30,160 Speaker 2: things and moves in cycles. I talk about cycles all 284 00:12:30,160 --> 00:12:32,160 Speaker 2: the time, Okay, So what we can see, and in 285 00:12:32,160 --> 00:12:35,200 Speaker 2: this case we're calling them regimes, is we can see 286 00:12:35,200 --> 00:12:38,960 Speaker 2: that this liquidity moves up and then it consolidates in 287 00:12:39,000 --> 00:12:42,960 Speaker 2: a pattern. Why I've done a bunch of videos on this, 288 00:12:43,240 --> 00:12:45,520 Speaker 2: but it's because the debt has to get rolled over. 289 00:12:45,880 --> 00:12:48,120 Speaker 2: It's about an average of four year cycles of debt. 290 00:12:48,720 --> 00:12:51,720 Speaker 2: On year three, we start running out of liquidity until. 291 00:12:51,480 --> 00:12:53,920 Speaker 1: The next tron just put in. Then we're off to 292 00:12:53,920 --> 00:12:54,840 Speaker 1: the races for the next four year. 293 00:12:54,880 --> 00:12:58,000 Speaker 2: So we have this upcycle liquidity, we have a consolidation 294 00:12:58,120 --> 00:12:58,640 Speaker 2: pattern and. 295 00:12:58,600 --> 00:12:59,600 Speaker 1: Here is the breakout. 296 00:13:00,640 --> 00:13:03,680 Speaker 2: This breakout puts us into the next super Bowl cycle. 297 00:13:04,080 --> 00:13:06,800 Speaker 2: And now we take off, we go into a consolidation 298 00:13:06,920 --> 00:13:09,680 Speaker 2: right here, and then we break out consolidation right here. 299 00:13:10,000 --> 00:13:11,280 Speaker 1: And the reason why I'm showing. 300 00:13:11,040 --> 00:13:14,880 Speaker 2: You this is because we're sitting right here, right now 301 00:13:15,200 --> 00:13:19,880 Speaker 2: on the third breakout. Now, if you're an elementary kid 302 00:13:19,920 --> 00:13:24,319 Speaker 2: looking at patterns, we have a consolidation breakout, consolidation breakout. Here, 303 00:13:24,320 --> 00:13:26,880 Speaker 2: We've had a consolidation and we're breaking out. What do 304 00:13:26,880 --> 00:13:30,320 Speaker 2: you think happens next? Well, if you see this arrow 305 00:13:30,320 --> 00:13:32,800 Speaker 2: shooting up, you would be exactly right. But again we 306 00:13:32,840 --> 00:13:35,600 Speaker 2: want to understand one. We're in this breakout of this 307 00:13:35,640 --> 00:13:37,800 Speaker 2: regime shift, but we want to look at the risk. 308 00:13:38,040 --> 00:13:41,160 Speaker 1: Okay, so how does this work? Again? This is from 309 00:13:41,240 --> 00:13:41,880 Speaker 1: Jamie Coutch. 310 00:13:42,040 --> 00:13:45,600 Speaker 2: This is a global equity risk score and basically we 311 00:13:45,679 --> 00:13:50,200 Speaker 2: have five levels level one, level two, level three, level four. 312 00:13:50,200 --> 00:13:51,960 Speaker 1: And level five. You can see that. 313 00:13:52,559 --> 00:13:55,880 Speaker 2: And this is overlaid with the price of bitcoin going 314 00:13:55,920 --> 00:13:58,720 Speaker 2: back here to twenty seventeen, and of course this is 315 00:13:58,760 --> 00:14:02,040 Speaker 2: current right here. So what this shows us, right now 316 00:14:02,480 --> 00:14:05,480 Speaker 2: is that we are currently at level three. 317 00:14:05,640 --> 00:14:06,840 Speaker 1: Which is basically neutral. 318 00:14:07,280 --> 00:14:10,840 Speaker 2: Basically neutral, right, we're not at the bitcoin lows right 319 00:14:10,880 --> 00:14:12,760 Speaker 2: here where we're back here when we are. 320 00:14:12,720 --> 00:14:13,240 Speaker 1: Only at one. 321 00:14:13,720 --> 00:14:16,640 Speaker 2: We've come up a lot in the bitcoin price, but 322 00:14:16,679 --> 00:14:18,840 Speaker 2: we're only at level three, a neutral score. 323 00:14:18,960 --> 00:14:20,760 Speaker 1: We're not at five yet. 324 00:14:20,960 --> 00:14:22,800 Speaker 2: What does that tell us, Well, it tells us we're 325 00:14:22,960 --> 00:14:25,360 Speaker 2: sort of like a medium risk. We're not the lowest 326 00:14:25,440 --> 00:14:28,080 Speaker 2: risk ever, but we're nowhere near the top either. So 327 00:14:28,120 --> 00:14:31,800 Speaker 2: what this tells us is potentially bitcoin has a lot 328 00:14:31,880 --> 00:14:34,400 Speaker 2: of room to go up from this one hundred thousand 329 00:14:34,440 --> 00:14:36,760 Speaker 2: dollars price point that we're in before we start getting 330 00:14:36,800 --> 00:14:39,600 Speaker 2: into level four level five risk. Now, even when we 331 00:14:39,600 --> 00:14:41,880 Speaker 2: get into level five, we can keep going for a 332 00:14:41,880 --> 00:14:42,400 Speaker 2: long time. 333 00:14:42,480 --> 00:14:45,080 Speaker 1: These do not predict absolute tops. 334 00:14:45,240 --> 00:14:47,040 Speaker 2: They only know let us know when things are cheap 335 00:14:47,880 --> 00:14:50,440 Speaker 2: level one or expensive level five. 336 00:14:50,480 --> 00:14:50,760 Speaker 1: That's it. 337 00:14:50,920 --> 00:14:52,840 Speaker 2: So you can see here we hit level five, but 338 00:14:52,880 --> 00:14:55,440 Speaker 2: look how long I continue on to that pattern? So 339 00:14:55,520 --> 00:14:58,280 Speaker 2: this is one thing. But again in this risk score, 340 00:14:58,400 --> 00:15:01,360 Speaker 2: we're only at level three. Okay, there's a lot more 341 00:15:01,360 --> 00:15:02,680 Speaker 2: to go over, so let's keep going. 342 00:15:03,520 --> 00:15:06,400 Speaker 1: All right. Now, we talked about the fuel for the engine. 343 00:15:06,800 --> 00:15:08,920 Speaker 2: Now we want to talk about the accelerator and the 344 00:15:08,920 --> 00:15:11,880 Speaker 2: brake pedals. So now the fuel's in the cars going, 345 00:15:11,920 --> 00:15:13,200 Speaker 2: how do we control this, How do we speed it 346 00:15:13,240 --> 00:15:15,240 Speaker 2: up or how do we slow it down? Okay, this 347 00:15:15,320 --> 00:15:17,560 Speaker 2: is the leverage or the drs. 348 00:15:17,880 --> 00:15:19,200 Speaker 1: Okay, this is the derivative market. 349 00:15:19,440 --> 00:15:22,520 Speaker 2: This is all the bets, all the side bets that 350 00:15:22,560 --> 00:15:24,000 Speaker 2: are happening on bitcoin. 351 00:15:24,160 --> 00:15:25,600 Speaker 1: So in the old days, we just looked at bitcoin, 352 00:15:25,640 --> 00:15:27,240 Speaker 1: look at the network effects, looked at the. 353 00:15:27,160 --> 00:15:29,560 Speaker 2: On chain data, the number of addresses growing, the number 354 00:15:29,600 --> 00:15:31,720 Speaker 2: of walls holding one or more bitcoin, things like that. 355 00:15:32,160 --> 00:15:35,320 Speaker 2: But now we have derivatives. Now, derivatives are again where 356 00:15:35,320 --> 00:15:37,600 Speaker 2: I can bet on the side of where the price 357 00:15:37,680 --> 00:15:41,560 Speaker 2: is going. Leverage bets, leverage, longs, leverage, shorts. 358 00:15:41,280 --> 00:15:41,960 Speaker 1: All those things. 359 00:15:42,600 --> 00:15:47,880 Speaker 2: The derivatives make up three to five times the total 360 00:15:48,040 --> 00:15:51,560 Speaker 2: volume of bitcoin. So just looking at on chain data 361 00:15:51,560 --> 00:15:55,080 Speaker 2: alone today doesn't really give us the total picture. It's great, 362 00:15:55,120 --> 00:15:57,200 Speaker 2: we should definitely be holding bitcoin on chaining in your 363 00:15:57,200 --> 00:15:59,720 Speaker 2: cold storage, but if we really want to understand price action, 364 00:15:59,840 --> 00:16:03,200 Speaker 2: we have to go back and look at the derivative market. Now, 365 00:16:03,280 --> 00:16:05,000 Speaker 2: what we can see is that in March of twenty 366 00:16:05,080 --> 00:16:09,160 Speaker 2: twenty four, the derivative market was about seventy five percent 367 00:16:09,880 --> 00:16:12,920 Speaker 2: of the bitcoin price action. Now again this goes back 368 00:16:12,920 --> 00:16:15,480 Speaker 2: to about twenty twenty and it comes to current And 369 00:16:15,520 --> 00:16:19,240 Speaker 2: what this shows us is these derivatives bets going higher 370 00:16:19,320 --> 00:16:23,160 Speaker 2: and then the red is going lower, going higher, going lower. 371 00:16:23,160 --> 00:16:26,520 Speaker 2: And of course as the derivative action is going higher, 372 00:16:26,680 --> 00:16:30,280 Speaker 2: what happens to the price action goes up When the 373 00:16:30,320 --> 00:16:33,240 Speaker 2: derivative market is coming down, then of course we have 374 00:16:33,360 --> 00:16:36,400 Speaker 2: down action. We had this long consolidation period when there 375 00:16:36,400 --> 00:16:38,600 Speaker 2: wasn't a whole lot of derivative action going on. Here 376 00:16:38,640 --> 00:16:40,560 Speaker 2: we have the increased derivative action. You can see we're 377 00:16:40,600 --> 00:16:42,560 Speaker 2: heading back up. And is we want to be looking 378 00:16:42,600 --> 00:16:45,920 Speaker 2: at this because again most of the price action is 379 00:16:45,920 --> 00:16:49,240 Speaker 2: happening there. It's what's creating a lot of rallies and crashes. 380 00:16:49,320 --> 00:16:50,760 Speaker 1: Why well, very. 381 00:16:50,600 --> 00:16:53,880 Speaker 2: Simply, markets stop going up when there's normal buyers, they 382 00:16:53,920 --> 00:16:56,400 Speaker 2: stop going down those normal sellers. And what happens with 383 00:16:56,440 --> 00:16:59,320 Speaker 2: the derivative traders. They're adding all this leverage under the system. 384 00:16:59,680 --> 00:17:02,840 Speaker 2: In a bull market, they're piling on, piling on, piling on, 385 00:17:02,880 --> 00:17:06,119 Speaker 2: which pushes it up even faster than normally would. But 386 00:17:06,200 --> 00:17:08,680 Speaker 2: also when it's going down, not only are people exiting, 387 00:17:09,200 --> 00:17:11,400 Speaker 2: but they're also starting to pile on the shorts, which 388 00:17:11,440 --> 00:17:13,440 Speaker 2: pushes it down even further, so it creates a lot 389 00:17:13,480 --> 00:17:18,760 Speaker 2: more volatility. But basically, the DRS this score, it quantifies 390 00:17:19,160 --> 00:17:21,840 Speaker 2: the excess that we have in the system. Again, this 391 00:17:21,920 --> 00:17:24,960 Speaker 2: charts from Jamie Coowts over at Real Vision, and this 392 00:17:25,160 --> 00:17:27,440 Speaker 2: is giving us the same type of a score again 393 00:17:27,760 --> 00:17:30,919 Speaker 2: level one, level two, level three, level four, level five. 394 00:17:31,720 --> 00:17:34,600 Speaker 2: So where are we in the derivvorous score. 395 00:17:34,880 --> 00:17:35,960 Speaker 1: Well, let's take a look. 396 00:17:36,119 --> 00:17:38,640 Speaker 2: What we can see is right now we're sitting at 397 00:17:38,640 --> 00:17:43,800 Speaker 2: about a two, not a one, not the lowest, certainly 398 00:17:43,880 --> 00:17:45,000 Speaker 2: nowhere near a five. 399 00:17:45,320 --> 00:17:47,119 Speaker 1: We're only at a level two. 400 00:17:47,240 --> 00:17:49,280 Speaker 2: So what this means is that the bitcoin price can 401 00:17:49,359 --> 00:17:52,840 Speaker 2: run way further up before we start getting too a 402 00:17:52,960 --> 00:17:56,359 Speaker 2: risky situation, not predicting the top, but getting close to that. 403 00:17:56,560 --> 00:17:58,960 Speaker 2: And as you can see, at a level two, we 404 00:17:59,080 --> 00:18:01,199 Speaker 2: have a long way for the bitcoin price to run 405 00:18:01,320 --> 00:18:03,480 Speaker 2: up from this risk adjusted model. 406 00:18:04,000 --> 00:18:06,919 Speaker 1: All right, that's two. We can keep going. Now we 407 00:18:07,040 --> 00:18:09,080 Speaker 1: have the valves. What are the blowoffs? 408 00:18:09,280 --> 00:18:12,760 Speaker 2: How does the market move when we have these other things? Well, 409 00:18:12,880 --> 00:18:17,240 Speaker 2: this is the network profitability, So this is gauging how 410 00:18:17,240 --> 00:18:19,720 Speaker 2: many people on the bitcoin network are in profit or 411 00:18:19,760 --> 00:18:23,159 Speaker 2: at a loss, because depending on where they're at with profitability, 412 00:18:23,359 --> 00:18:25,880 Speaker 2: we can start to guess and gauge what they might 413 00:18:25,920 --> 00:18:29,440 Speaker 2: do next. It drives their decision making. If I'm sitting 414 00:18:29,480 --> 00:18:32,520 Speaker 2: in a massive profit, I might want to scoop a 415 00:18:32,520 --> 00:18:33,280 Speaker 2: little cream. 416 00:18:33,040 --> 00:18:34,320 Speaker 1: Off the top right, I might want to sell a 417 00:18:34,359 --> 00:18:36,440 Speaker 1: little bit. If I'm sitting in a major loss, I 418 00:18:36,520 --> 00:18:38,920 Speaker 1: might try to hold until I get back into profitability. 419 00:18:39,480 --> 00:18:41,960 Speaker 2: And so what this does is we can look at 420 00:18:41,960 --> 00:18:44,479 Speaker 2: this and here's a couple on chain indicators here. So 421 00:18:44,520 --> 00:18:48,800 Speaker 2: these are ones from Bitcoin magazine. I recently did a 422 00:18:48,840 --> 00:18:51,680 Speaker 2: video where I talked about the five on chain indicators 423 00:18:51,680 --> 00:18:53,840 Speaker 2: that I like to watch the most. We'll link to 424 00:18:53,840 --> 00:18:55,520 Speaker 2: that and then the show description down below if you 425 00:18:55,520 --> 00:18:57,480 Speaker 2: want to go watch that video. But this is the 426 00:18:57,800 --> 00:19:00,960 Speaker 2: MVRV score. You've probably heard about this. It's the market 427 00:19:01,040 --> 00:19:03,879 Speaker 2: value versus the realized value. And so what you can 428 00:19:03,920 --> 00:19:06,920 Speaker 2: see here is the black line is the price of 429 00:19:07,000 --> 00:19:10,639 Speaker 2: bitcoin and this gold line here is the Z score. 430 00:19:10,920 --> 00:19:13,159 Speaker 2: So what you can see is when it shoots really high, 431 00:19:13,240 --> 00:19:15,639 Speaker 2: that was a bitcoin top shot really high. That was 432 00:19:15,680 --> 00:19:18,320 Speaker 2: a bitcoin top shot really high. That was a bitcoin 433 00:19:18,400 --> 00:19:19,320 Speaker 2: top But as you. 434 00:19:19,280 --> 00:19:23,440 Speaker 1: Can see we're nowhere near shooting all time high. We're 435 00:19:23,480 --> 00:19:24,120 Speaker 1: way down here. 436 00:19:24,240 --> 00:19:26,679 Speaker 2: So we need to see this go way up to here, 437 00:19:27,640 --> 00:19:30,960 Speaker 2: and this would go way up to here before that happens. 438 00:19:31,160 --> 00:19:33,760 Speaker 2: So again the indicators are telling us we're nowhere near 439 00:19:33,840 --> 00:19:36,560 Speaker 2: that level. Here's another on chain indicator that we can 440 00:19:36,600 --> 00:19:40,520 Speaker 2: look at. This is the net unrealized profit and loss. 441 00:19:40,600 --> 00:19:43,560 Speaker 2: So again this is showing how much profit people are 442 00:19:43,560 --> 00:19:47,160 Speaker 2: sitting on unrealized right. And again when this gets high 443 00:19:47,200 --> 00:19:49,200 Speaker 2: or low, it starts to show. So this got high 444 00:19:49,240 --> 00:19:51,960 Speaker 2: here at this top. This got really high at this top. 445 00:19:52,160 --> 00:19:54,840 Speaker 2: But here we are way down here. So this price 446 00:19:54,880 --> 00:19:56,960 Speaker 2: needs to come up, and this needs to come back 447 00:19:57,040 --> 00:20:00,199 Speaker 2: up somewhere right around there. Hey, don't worry, I'm going 448 00:20:00,240 --> 00:20:01,920 Speaker 2: to show you some predictions of price if you stick 449 00:20:01,920 --> 00:20:02,359 Speaker 2: around with me. 450 00:20:02,440 --> 00:20:04,920 Speaker 1: Okay, Another one we want to take a look at 451 00:20:05,200 --> 00:20:07,080 Speaker 1: is the spo R. 452 00:20:07,520 --> 00:20:11,600 Speaker 2: Now, the spo R is basically the spent output profit ratio. 453 00:20:11,880 --> 00:20:15,120 Speaker 2: And again when we see a high volume, this sort 454 00:20:15,160 --> 00:20:17,040 Speaker 2: of marks the top of cycles. 455 00:20:17,119 --> 00:20:19,320 Speaker 1: But again, look how low that volume is right now. 456 00:20:20,040 --> 00:20:23,160 Speaker 2: Again, these don't predict where we're going, but they help 457 00:20:23,240 --> 00:20:25,920 Speaker 2: us to understand when things are expensive or cheap. 458 00:20:25,960 --> 00:20:28,960 Speaker 1: Now, the NPRS is. 459 00:20:28,920 --> 00:20:31,360 Speaker 2: Basically taking all of these signals and put them together 460 00:20:31,440 --> 00:20:34,119 Speaker 2: in a single source to make it much easier. And 461 00:20:34,200 --> 00:20:36,320 Speaker 2: again this is from my friend Jamie Couch over at 462 00:20:36,560 --> 00:20:37,119 Speaker 2: Real Vision. 463 00:20:37,280 --> 00:20:38,320 Speaker 1: They do amazing work. 464 00:20:39,240 --> 00:20:41,879 Speaker 2: And so what we can see is the network Profitability 465 00:20:42,160 --> 00:20:44,639 Speaker 2: risk Score, and again sort of same framework. We have 466 00:20:44,720 --> 00:20:47,639 Speaker 2: level one, level two, level three, level four, and level 467 00:20:47,720 --> 00:20:51,600 Speaker 2: five five being the most risky, one being least. Where 468 00:20:51,640 --> 00:20:54,760 Speaker 2: are we today on this risk score? Well, right now 469 00:20:54,800 --> 00:20:57,480 Speaker 2: we're sitting right around about a two and a half 470 00:20:58,160 --> 00:21:02,119 Speaker 2: two point seven percent risk, so just below neutral, a 471 00:21:02,119 --> 00:21:04,879 Speaker 2: little bit less risky the neutral, which again means this 472 00:21:04,920 --> 00:21:07,119 Speaker 2: needs to run way higher in order for this to 473 00:21:07,200 --> 00:21:10,120 Speaker 2: run way higher. And so again we're well below We're 474 00:21:10,160 --> 00:21:13,400 Speaker 2: not at the lowest price levels ever. Obviously we've come 475 00:21:13,480 --> 00:21:16,399 Speaker 2: off this bottom all the way up. We're obviously not 476 00:21:16,560 --> 00:21:19,800 Speaker 2: here anymore, but we're nowhere near the top. Based off 477 00:21:19,800 --> 00:21:22,359 Speaker 2: of these things, it looks like this market has a 478 00:21:22,600 --> 00:21:24,719 Speaker 2: long way to go. You're gonna think of this as 479 00:21:24,760 --> 00:21:27,920 Speaker 2: like an emotional heartbeat, because again, like if I'm sitting 480 00:21:27,960 --> 00:21:29,880 Speaker 2: on a lot of profit, I'm probably going to take 481 00:21:29,920 --> 00:21:31,880 Speaker 2: some profits. Maybe I'll pay off my house or buy 482 00:21:31,960 --> 00:21:34,400 Speaker 2: something new, right, or if I'm if I'm at a loss, 483 00:21:34,400 --> 00:21:36,719 Speaker 2: I want to hold this. It plays with my emotions 484 00:21:36,960 --> 00:21:39,280 Speaker 2: and so it sort of gives us that leading indicator 485 00:21:39,440 --> 00:21:42,359 Speaker 2: of what the market may do. Okay, So the question 486 00:21:42,480 --> 00:21:44,280 Speaker 2: is if we combine all these where are we now? 487 00:21:44,320 --> 00:21:45,840 Speaker 1: And I've kind of already given that away. 488 00:21:45,960 --> 00:21:50,879 Speaker 2: If we add the grs, the drs, and the nprs together. 489 00:21:51,359 --> 00:21:51,919 Speaker 1: Where are we? 490 00:21:52,000 --> 00:21:55,639 Speaker 2: But what I haven't given away is based off historical returns, 491 00:21:56,280 --> 00:21:58,359 Speaker 2: where do we go from here? If we look at 492 00:21:58,440 --> 00:22:01,880 Speaker 2: past market cycles that we've seen this, what could potentially 493 00:22:02,320 --> 00:22:04,880 Speaker 2: happen from here on out? Let's take a look, all right, 494 00:22:04,920 --> 00:22:07,359 Speaker 2: So if we go back and we put all these 495 00:22:07,359 --> 00:22:11,320 Speaker 2: together again and combine them, what we can see is 496 00:22:11,320 --> 00:22:13,840 Speaker 2: we're right here in about two point six two point seven, 497 00:22:14,200 --> 00:22:16,679 Speaker 2: So that means we need to go a lot higher 498 00:22:16,720 --> 00:22:18,760 Speaker 2: here for this to come up a lot higher. Here, 499 00:22:19,520 --> 00:22:23,400 Speaker 2: we're already up quite a bit off the bottom. Doesn't 500 00:22:23,440 --> 00:22:26,960 Speaker 2: mean we're at the top. You have to understand market cycles, right, 501 00:22:27,200 --> 00:22:30,560 Speaker 2: So we're above right, we're at new all time highs, 502 00:22:30,800 --> 00:22:32,280 Speaker 2: but at the midpoint of. 503 00:22:32,200 --> 00:22:34,080 Speaker 1: The cycle, not at the top of the cycle like 504 00:22:34,080 --> 00:22:34,960 Speaker 1: we were last time. 505 00:22:34,960 --> 00:22:37,879 Speaker 2: We were there, So based off of the combined score, 506 00:22:38,359 --> 00:22:40,679 Speaker 2: we can see we're in about a neutral market. 507 00:22:40,720 --> 00:22:42,880 Speaker 1: Again, we're not anywhere near caution. 508 00:22:43,000 --> 00:22:44,919 Speaker 2: We're not at four, we're not a five, and that 509 00:22:45,000 --> 00:22:46,480 Speaker 2: sort of tells us that we have a long way 510 00:22:46,520 --> 00:22:50,640 Speaker 2: to go now based off of past performance, which again 511 00:22:50,680 --> 00:22:53,159 Speaker 2: is no guarantee of future performance, but based off of 512 00:22:53,240 --> 00:22:56,919 Speaker 2: past performance when we've seen these levels before, what is 513 00:22:56,960 --> 00:22:57,800 Speaker 2: bigcoin done? 514 00:22:58,040 --> 00:22:58,280 Speaker 1: Now? 515 00:22:58,359 --> 00:23:00,320 Speaker 2: If we look at each of these indicators on it own, 516 00:23:00,520 --> 00:23:03,240 Speaker 2: they all have different data, but if we combine the 517 00:23:03,320 --> 00:23:05,080 Speaker 2: three we get something different. 518 00:23:05,119 --> 00:23:05,439 Speaker 1: Okay. 519 00:23:05,520 --> 00:23:10,520 Speaker 2: So Network Profitability Risk Score NPRS performance and basically right 520 00:23:10,560 --> 00:23:11,360 Speaker 2: now we're sort. 521 00:23:11,160 --> 00:23:13,879 Speaker 1: Of in this neutral range. We're a little bit lower 522 00:23:13,880 --> 00:23:16,120 Speaker 1: than neutral, but let's just call it neutral for this 523 00:23:16,119 --> 00:23:16,760 Speaker 1: this exercise. 524 00:23:17,240 --> 00:23:19,960 Speaker 2: Okay, So what this says about almost sixty percent of 525 00:23:19,960 --> 00:23:23,120 Speaker 2: the time this has worked in thirty days, we'll see 526 00:23:23,200 --> 00:23:26,840 Speaker 2: eleven percent ninety days of forty five percent, one hundred 527 00:23:26,840 --> 00:23:31,960 Speaker 2: and eighty days a ninety six percent return double. Okay, 528 00:23:32,720 --> 00:23:36,200 Speaker 2: it's not guaranteed sixty percent, so that means it's a 529 00:23:36,320 --> 00:23:38,560 Speaker 2: base case. So what we want to do is we're 530 00:23:38,600 --> 00:23:39,600 Speaker 2: always looking at the odds. 531 00:23:39,600 --> 00:23:42,080 Speaker 1: Again. Poor mentality thinks about how much money can I 532 00:23:42,119 --> 00:23:43,000 Speaker 1: make and they go low end. 533 00:23:43,720 --> 00:23:48,880 Speaker 2: But smart money always makes structured strategic bets. How much 534 00:23:48,880 --> 00:23:51,400 Speaker 2: should I allocate, Well, depends on what my odds are. 535 00:23:51,800 --> 00:23:54,280 Speaker 2: If I have a ninety percent chance of winning the bet, 536 00:23:54,520 --> 00:23:55,600 Speaker 2: I'm going to bet more. 537 00:23:55,920 --> 00:23:58,480 Speaker 1: If I have a ten percent chance ten percent odds of. 538 00:23:58,440 --> 00:24:01,160 Speaker 2: Winning the bet, I'm gonna bet a very bit obviously, right, 539 00:24:01,240 --> 00:24:03,639 Speaker 2: if we want to understand the odds and what the 540 00:24:03,680 --> 00:24:07,320 Speaker 2: probabilities are, and based off of where we're at right now, 541 00:24:08,320 --> 00:24:10,320 Speaker 2: we have a long way to go, right, We have 542 00:24:10,480 --> 00:24:12,160 Speaker 2: a long way to go now. 543 00:24:13,080 --> 00:24:16,240 Speaker 1: Understanding this gives us new tools. But how do we 544 00:24:16,359 --> 00:24:19,000 Speaker 1: use all this? How do we use all this? Again? 545 00:24:19,080 --> 00:24:21,280 Speaker 2: So the first thing is this is not a crystal ball. 546 00:24:21,520 --> 00:24:24,480 Speaker 2: This doesn't predict the future. This doesn't tell us exactly 547 00:24:24,840 --> 00:24:26,680 Speaker 2: what bitcoin's price is going to be on what date 548 00:24:26,680 --> 00:24:27,200 Speaker 2: and one's. 549 00:24:27,000 --> 00:24:29,480 Speaker 1: Going to turn around. It doesn't tell us if there's 550 00:24:29,480 --> 00:24:31,400 Speaker 1: another big dip coming that you should wait to buy 551 00:24:31,400 --> 00:24:31,800 Speaker 1: the dip. 552 00:24:32,359 --> 00:24:35,159 Speaker 2: What it does tell us is if it's expensive or 553 00:24:35,160 --> 00:24:37,560 Speaker 2: if it's cheap. It does tell us if we're starting 554 00:24:37,600 --> 00:24:41,000 Speaker 2: to get overbought or over sold. It does tell us 555 00:24:41,080 --> 00:24:43,080 Speaker 2: maybe when we should be pressing in harder. Because the 556 00:24:43,119 --> 00:24:45,200 Speaker 2: odds are with us, or we might want to pull 557 00:24:45,240 --> 00:24:47,960 Speaker 2: back a little bit because the odds are against us. Now, 558 00:24:48,240 --> 00:24:51,479 Speaker 2: I would strongly advise against trying to time this and 559 00:24:51,640 --> 00:24:54,360 Speaker 2: sell out and buy back in because what happens. Let's 560 00:24:54,359 --> 00:24:58,560 Speaker 2: take twenty seventeen for example. In twenty seventeen, bitcoin ran 561 00:24:58,600 --> 00:25:01,760 Speaker 2: from one thousand to twenty thousand in one. 562 00:25:01,640 --> 00:25:06,040 Speaker 1: Year, okay, from twenty times. It's pretty amazing. 563 00:25:06,240 --> 00:25:09,560 Speaker 2: But if you were looking at these indicators around I 564 00:25:09,560 --> 00:25:11,879 Speaker 2: don't know, it was around four to five thousand, it 565 00:25:11,960 --> 00:25:13,720 Speaker 2: started flashing that it was at the top of the market, 566 00:25:13,760 --> 00:25:15,920 Speaker 2: it was overbought, it had gone up four or five times. 567 00:25:15,960 --> 00:25:18,359 Speaker 2: It's amazing. If you're a traditional investor, this is the 568 00:25:18,400 --> 00:25:20,800 Speaker 2: best returns you've ever seen in your life. And so 569 00:25:20,840 --> 00:25:23,080 Speaker 2: the indicators were showing it was very expensive, and so 570 00:25:23,119 --> 00:25:25,400 Speaker 2: if you're following that and trying to time the market, 571 00:25:25,440 --> 00:25:26,920 Speaker 2: you would have sold out, you would have cashed it, 572 00:25:28,080 --> 00:25:29,639 Speaker 2: and you would have missed the run from four or 573 00:25:29,720 --> 00:25:33,359 Speaker 2: five grand up to twenty grand. Now what happened is, 574 00:25:33,400 --> 00:25:35,960 Speaker 2: of course it crashed all the way back down, and 575 00:25:36,040 --> 00:25:37,720 Speaker 2: you were going to try to time the bottom. But 576 00:25:37,760 --> 00:25:39,800 Speaker 2: of course nobody wants to catch a falling knife, So 577 00:25:39,840 --> 00:25:42,160 Speaker 2: you're waiting for something to turn, some sentiment to turn. 578 00:25:42,359 --> 00:25:44,320 Speaker 1: The charts are turned to tell you when to start buying. 579 00:25:44,560 --> 00:25:48,000 Speaker 2: But bitcoin moved so violently that really quickly it moved higher, 580 00:25:48,160 --> 00:25:50,159 Speaker 2: and now you're buying back in at six or seven K. 581 00:25:50,680 --> 00:25:52,440 Speaker 2: So if you tried to sell out at four or five, 582 00:25:52,600 --> 00:25:54,440 Speaker 2: you missed this, and then you bought it at six 583 00:25:54,520 --> 00:25:55,200 Speaker 2: or seven. 584 00:25:55,359 --> 00:25:56,760 Speaker 1: You actually got behind. 585 00:25:57,040 --> 00:25:59,840 Speaker 2: Now, if you're like you know, whatever your circumstances, maybe 586 00:25:59,840 --> 00:26:01,680 Speaker 2: you're older, you're on a fixed income, you don't have 587 00:26:01,720 --> 00:26:02,400 Speaker 2: a long timeframe. 588 00:26:02,920 --> 00:26:04,679 Speaker 1: Maybe maybe the four or five times. 589 00:26:04,400 --> 00:26:05,919 Speaker 2: On your money was amazing. It was the best praturny 590 00:26:05,960 --> 00:26:08,520 Speaker 2: you've ever had in congratulations. And if you're just trying 591 00:26:08,520 --> 00:26:10,520 Speaker 2: to get more US dollars, you can trade it from 592 00:26:10,560 --> 00:26:12,680 Speaker 2: one to four, you can trade it from six to 593 00:26:12,720 --> 00:26:14,119 Speaker 2: twenty again, and you can. 594 00:26:13,960 --> 00:26:15,119 Speaker 1: Make that spread, and that's cool. 595 00:26:15,480 --> 00:26:17,960 Speaker 2: But if you're a long term bitcoin hoddler like I am, 596 00:26:18,200 --> 00:26:20,879 Speaker 2: and you expected to hit one million dollars by twenty thirty, 597 00:26:21,160 --> 00:26:21,879 Speaker 2: like I do. 598 00:26:22,080 --> 00:26:23,480 Speaker 1: Then I'm not trying to time this. 599 00:26:23,800 --> 00:26:25,600 Speaker 2: What I'm going to do is I'm gonna start adding 600 00:26:25,880 --> 00:26:30,400 Speaker 2: aggressively here so when it gets here, I'm not as 601 00:26:30,520 --> 00:26:33,160 Speaker 2: adding as aggressively. So I'm buying super heavy. Right here 602 00:26:33,680 --> 00:26:36,119 Speaker 2: around here, I start slowing down. Maybe I'm not going 603 00:26:36,200 --> 00:26:38,080 Speaker 2: to put any in. Maybe I'll just kind of wait. 604 00:26:38,240 --> 00:26:40,879 Speaker 2: I'm not selling, but I wait. Then when it starts 605 00:26:40,880 --> 00:26:42,960 Speaker 2: coming down right around here, I start deploying again. 606 00:26:43,040 --> 00:26:44,199 Speaker 1: I'm gonna buy all the. 607 00:26:44,200 --> 00:26:47,120 Speaker 2: Way through this dip. When it gets here, I start 608 00:26:47,119 --> 00:26:50,000 Speaker 2: waiting again. That's how I use this Now. We also 609 00:26:50,160 --> 00:26:52,240 Speaker 2: that's positioning versus chasing. 610 00:26:52,480 --> 00:26:54,440 Speaker 1: I'm not trying to predict. I'm not trying to time. 611 00:26:55,320 --> 00:26:59,919 Speaker 2: I'm positioning myself correctly to take full advantage of this cycle. 612 00:27:00,600 --> 00:27:02,240 Speaker 1: Again, we want to use tiered entries. 613 00:27:02,520 --> 00:27:04,840 Speaker 2: So again I'm not going to exit, but I'm not 614 00:27:04,880 --> 00:27:07,840 Speaker 2: going to do massive entries at the top of the market. 615 00:27:08,000 --> 00:27:10,800 Speaker 2: I'm going to I'll pause these entries here we're nowhere 616 00:27:10,840 --> 00:27:13,560 Speaker 2: near that yet, and then I'll start tearing in my 617 00:27:13,760 --> 00:27:16,960 Speaker 2: entries over here. We do this based off of conviction 618 00:27:17,440 --> 00:27:21,280 Speaker 2: weighted allocations. Remember the percentages, so based off. 619 00:27:21,119 --> 00:27:21,760 Speaker 1: Of where we're at. 620 00:27:21,800 --> 00:27:24,320 Speaker 2: As we're starting to get more expensive here, as the 621 00:27:24,400 --> 00:27:26,880 Speaker 2: odds the percentages are coming down, it's less so it's 622 00:27:26,960 --> 00:27:31,320 Speaker 2: conviction weighted allocations. Another thing about to take talking about 623 00:27:31,320 --> 00:27:33,640 Speaker 2: in this video is the treasury stacking. So now there's 624 00:27:33,920 --> 00:27:37,360 Speaker 2: this new breed of treasury companies, Bitcoin Treasury companies. Micro 625 00:27:37,400 --> 00:27:40,800 Speaker 2: Strategy launched it, Metaplanet, all matatoral these other ones that 626 00:27:40,840 --> 00:27:43,680 Speaker 2: are blowing up, and you might want to consider stacking 627 00:27:43,720 --> 00:27:45,480 Speaker 2: into some of these as well. If you're going to 628 00:27:45,480 --> 00:27:47,119 Speaker 2: break down a whole video on that, let me know 629 00:27:47,520 --> 00:27:51,960 Speaker 2: down in the comments. Okay, so I do want to 630 00:27:52,000 --> 00:27:55,520 Speaker 2: just press on something here. This is not static, Okay, 631 00:27:55,880 --> 00:27:58,560 Speaker 2: these charts the change. This is dynamic. 632 00:27:58,640 --> 00:27:59,280 Speaker 1: It's moving. 633 00:27:59,560 --> 00:28:01,159 Speaker 2: So if you're looking at any type of indicator a 634 00:28:01,200 --> 00:28:04,199 Speaker 2: two hundred moving to average, for example, it's moving with 635 00:28:04,280 --> 00:28:04,720 Speaker 2: the price. 636 00:28:05,000 --> 00:28:07,000 Speaker 1: So you can't go off of what we just said. 637 00:28:07,119 --> 00:28:08,720 Speaker 2: That's why we can't predict the top or we can't 638 00:28:08,720 --> 00:28:11,080 Speaker 2: predict a time because these are moving. So what we're 639 00:28:11,080 --> 00:28:14,680 Speaker 2: doing is we're seeing the signs as it developed. Now 640 00:28:14,720 --> 00:28:18,960 Speaker 2: the cycles are not random. They happen in proper sequence, 641 00:28:19,160 --> 00:28:21,640 Speaker 2: but not to the exact time or date. But it's 642 00:28:21,680 --> 00:28:23,679 Speaker 2: always going to be the same thing. It's always going 643 00:28:23,720 --> 00:28:26,840 Speaker 2: to be liquidity that's the leading indicator. It's always going 644 00:28:26,880 --> 00:28:28,919 Speaker 2: to be leverage built up in this system. That's the 645 00:28:28,960 --> 00:28:31,200 Speaker 2: derivatives and it's always going to be the human emotion 646 00:28:32,000 --> 00:28:36,600 Speaker 2: because we drive humans. We're driven by pleasure, greed, and 647 00:28:36,640 --> 00:28:37,359 Speaker 2: fear pain. 648 00:28:37,720 --> 00:28:38,080 Speaker 1: That's it. 649 00:28:38,440 --> 00:28:40,080 Speaker 2: So we want to look at those three things and 650 00:28:40,120 --> 00:28:42,720 Speaker 2: again not trying to predict the top or the bottom, 651 00:28:42,880 --> 00:28:46,800 Speaker 2: but instead measuring the risk and the location of our 652 00:28:46,840 --> 00:28:49,080 Speaker 2: investments to the cycle. If you follow this, we're going 653 00:28:49,120 --> 00:28:51,479 Speaker 2: to have massive success. And if you want to know 654 00:28:51,600 --> 00:28:54,280 Speaker 2: the top five on chain indicators that I'm watching to 655 00:28:54,280 --> 00:28:57,680 Speaker 2: help me understand this, watch this video right here and 656 00:28:57,720 --> 00:28:58,520 Speaker 2: I'll see you over there.