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Speaker 1: Hello everyone, and welcome to the latest episode from the

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Speaker 1: midweek edition of the Coin bureau podcast. Every week, I

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Speaker 1: pick out two of my favorite videos from coin bureaus

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Speaker 1: YouTube channel to present to you in podcast form. The

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Speaker 1: audio you're about to hear is from those videos I've

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Speaker 1: chosen this week, and I hope you enjoy listening. You'll

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Speaker 1: no doubt be pleased to hear that ft X doesn't

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Speaker 1: feature prominently in either of the sections you'll hear today.

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Speaker 1: It still hangs like a black cloud over the crypto industry,

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Speaker 1: but there are other things we need to focus on,

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Speaker 1: such as what Jerome Powell and his crew at the

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Speaker 1: Federal Reserve are thinking about the economy and why the

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Speaker 1: crypto market could still go lower from here. It's been

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Speaker 1: a few weeks since the folks that the Fed last

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Speaker 1: hiked interest rates, and many have been speculating or praying

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Speaker 1: that they may ease off on raising them any further.

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Speaker 1: As always, investors have been hanging on every scrap of

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Speaker 1: information to emerge from Fed HQ, and we've got a

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Speaker 1: whole dollarp of it recently, when the minutes of the

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Speaker 1: last FED meeting were published a couple of weeks ago,

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Speaker 1: so In the first part of today's video, you'll hear

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Speaker 1: our analysis of those minutes and what they could signal

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Speaker 1: for the US and other economies in the coming months.

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Speaker 1: There's still lots to be concerned about. Speaking of things

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Speaker 1: to be concerned about, the crypto bear market we're in

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Speaker 1: could still get more well bearish before things start to

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Speaker 1: look up. There are a number of macro and crypto

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Speaker 1: specific factors that could yet push prices lower, and they're

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Speaker 1: the topic for the second part of today's episode from

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Speaker 1: yet more f t X Contagion. I knew we'd touch

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Speaker 1: on it at some point too. Bitcoin miners struggling to

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Speaker 1: the stock market and beyond. Crypto has a minefield to

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Speaker 1: walk through before things can get better, and some of

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Speaker 1: those minds contain a lot of explosives. Have a listen

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Speaker 1: and watch your step. Thanks for listening to today's episode,

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Speaker 1: and there'll be more coming your way soon. And if

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Speaker 1: you want even more content from coin Bureau, be sure

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Speaker 1: to subscribe to our YouTube channel and visit us on

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Speaker 1: social media too. Last week, the Federal Reserve published the Minutes,

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Speaker 1: that is summary of its most recent meeting. The minutes

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Speaker 1: revealed that most Fed officials want to slow the pace

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Speaker 1: of interest rate hikes going forward. The news caused markets

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Speaker 1: to rally on the possibility that the FED will pivot.

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Speaker 1: The problem is that slowing the pace of rate hikes

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Speaker 1: is not the same thing as lowering rates themselves, and

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Speaker 1: the headlines don't tell the full story. That's why today

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Speaker 1: I'm going to take a closer look at the Fed's

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Speaker 1: most recent minutes, summarize what they say in simple terms,

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Speaker 1: and tell you exactly what it could mean for the

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Speaker 1: markets in the coming months. Okay, let's start with a

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Speaker 1: bit of background. As most of you will know, the

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Speaker 1: Federal Reserve is the central bank of the United States.

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Speaker 1: What most of you may not know is that the

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Speaker 1: FED itself consists of twelve regional banks that are scattered

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Speaker 1: across the United States, each of which has its own president.

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Speaker 1: As most of you will know, the FED is governed

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Speaker 1: by seven governors, which include FED Chairman Jerome Powell. What

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Speaker 1: some of you may not also know is that the

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Speaker 1: central banks monetary policy is decided by the Federal Open

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Speaker 1: Markets Committee, or f o m C. The f o

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Speaker 1: m C consists of the feds seven governors, the president

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Speaker 1: of the New York Fed, and four of the other

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Speaker 1: presidents of the fed's other regional banks. The regional FED

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Speaker 1: presidents who sit on the f o m C change

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Speaker 1: every year, save of course, for the President of the

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Speaker 1: New York Fed, who has a permanent seat. In theory,

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Speaker 1: each member of the f o m C casts a

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Speaker 1: vote supporting or opposing the committee's decision on whether or

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Speaker 1: not to raise or lower interest rates, and the final

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Speaker 1: vote determines the rate hike. In practice, however, the FED

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Speaker 1: Chairman in this case, Jerome, apparently has the final say.

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Speaker 1: In addition to Jerome, the f o m C currently

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Speaker 1: consists of the following personnel. Fed Governor's Lele Brainard, Michael Barr,

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Speaker 1: Michelle Bowman, Lisa Cook, Philip Jefferson, and Christopher Waller, New

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Speaker 1: York FED President John Williams, Boston Fed President Susan Collins, St.

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Speaker 1: Louis Fed President James Bullard, Kansas City President Esther George

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Speaker 1: and Cleveland FED President Loretta J. Mester. I'll quickly note

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Speaker 1: that Michael Barr actually wrote the law that created the

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Speaker 1: position of Vice chair for supervision, which he now holds.

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Speaker 1: Michael seems to be intent on using the laws he

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Speaker 1: wrote in the aftermath of two thousand and eight to

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Speaker 1: crack down on crypto. More about that using the link

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Speaker 1: in the description. Now, all twelve f O m C

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Speaker 1: officials were present at the FEDS last meeting. This is

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Speaker 1: in addition to around fifty other academics and economists who

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Speaker 1: work for the FED, including members of the fed's other

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Speaker 1: regional banks. The f O m c's last meeting took

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Speaker 1: place on the first and second of November. To clarify,

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Speaker 1: the minutes of these meetings are not released until around

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Speaker 1: three weeks after the meeting in question takes place. This

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Speaker 1: is presumably to give the markets guidance about interest rates

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Speaker 1: between FED meetings, which occur around every six weeks. Obviously,

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Speaker 1: what investors look for in the FEDS minutes is evidence

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Speaker 1: of the central bank's plans regarding interest rates. Every single

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Speaker 1: word is scrutinized to see if the f O m

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Speaker 1: C is being hawkish i e. Planning on raising interest

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Speaker 1: rates or dovish i e. Planning on lowering them. As

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Speaker 1: almost all of you will know, raising interest rates tends

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Speaker 1: to cause markets to crash, whereas lowering them tends to

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Speaker 1: cause markets to rally. Because markets are forward looking, assets

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Speaker 1: tend to react immediately to the FEDS minutes even though

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Speaker 1: the rate hike or rate cut hasn't actually happened yet.

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Speaker 1: So with that background under your belt, let's see what

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Speaker 1: the f o m C had to say. The first

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Speaker 1: part of the fed's meeting was a quote ethics discussion,

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Speaker 1: wherein FED Chairman Jerome Powell reminded everyone present to be

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Speaker 1: on their best behavior. In other words, no sharing of

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Speaker 1: insider information, no insider trading, and make sure to report

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Speaker 1: all your investments. Nudge nudge, wink wink. With that bit

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Speaker 1: of business done, the second part of the meeting was

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Speaker 1: about rate hikes. F O m C officials discussed how

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Speaker 1: they're planning to raise interest rates higher than they had

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Speaker 1: planned in September, something that Jerome had told the public

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Speaker 1: in the fed's subsequent press conference. We actually summarized Jerome's

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Speaker 1: press conference too, that will also be in the description now.

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Speaker 1: One thing that Jerome didn't tell the public during his

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Speaker 1: press conference was that most f o MC officials see

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Speaker 1: a fifty basis point hike as being appropriate at the

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Speaker 1: fed's next meeting. For context, the FED has been aggressively

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Speaker 1: raising rates at seventy five basis points a pop for

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Speaker 1: the last few months. This basically confirms what Jerome denied,

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Speaker 1: which is that the FED is planning on slowing the

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Speaker 1: pace of rate hikes. As I mentioned in the introduction,

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Speaker 1: this caused markets to rally across the board, except for

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Speaker 1: crypto because it was busy getting wrecked by the ft

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Speaker 1: X Alameda situation. The f o m C also mentioned

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Speaker 1: the blow up in UK government bonds in September and

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Speaker 1: cautioned that the early warning signs of a similar event

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Speaker 1: are starting to emerge in the US, namely low liquidity.

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Speaker 1: The f o m C also touched on how other

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Speaker 1: currencies are collapsing against the US dollar, but didn't have

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Speaker 1: much to say on the matter. What's interesting is that

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Speaker 1: the f o m C reveals that the Federal Reserve

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Speaker 1: and other central banks are actively losing money due to

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Speaker 1: higher interest rates. Fortunately for the central banks, they don't

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Speaker 1: technically need to be profitable, even though the FED is

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Speaker 1: technically a private company. The more you know, now. The

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Speaker 1: third part of the Fed's meeting was about the economy.

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Speaker 1: The f O m C officials discussed the surprisingly positive

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Speaker 1: GDP print for Q three in the United States, the

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Speaker 1: continually tight labor market, and the increase in the Personal

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Speaker 1: Consumption Expenditures Index or PCE, the feds favorite inflation gauge.

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Speaker 1: Oddly enough, the FED went on to discuss how labor

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Speaker 1: market conditions are looking for different minority groups, and seem

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Speaker 1: to blame most of the economic issues we're facing on

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Speaker 1: the war in Ukraine, China's zero COVID policy, and tighter

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Speaker 1: financial conditions as a result of higher interest rates. The

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Speaker 1: f O m C also touched on the rising inflation

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Speaker 1: in other countries, caused primarily by disruptions to energy supplies.

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Speaker 1: They noted that foreign central banks have raised interest rates

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Speaker 1: to try and fight this inflation, but have slowed their

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Speaker 1: rate hikes as they realize there's only so much demand

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Speaker 1: they can destroy. The fourth part of the fed's meeting

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Speaker 1: was about financial conditions. There's a lot to cover here,

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Speaker 1: so i'll just give you the highlights. First, the f

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Speaker 1: O m C seemingly took issue with the recovery in

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Speaker 1: the stock market that started in mid October. This would

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Speaker 1: make sense as it's essentially the markets challenging the Fed. Second,

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Speaker 1: investors have been selling off foreign assets and deploying that

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Speaker 1: dry powder into US s sts, mainly US government debt.

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Speaker 1: This makes sense given that US government debt is provided

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Speaker 1: increasingly higher interest rates and is also considered to be

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Speaker 1: the safest asset in the eyes of institutional investors. This

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Speaker 1: phenomenon of money flowing into the United States is actually

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Speaker 1: part of the so called dollar milkshake theory proposed by

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Speaker 1: an increasingly popular macro analyst named Brent Johnson. The t

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Speaker 1: l d R is that most of the world's money

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Speaker 1: will flow into the US as foreign countries and currencies collapse.

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Speaker 1: You'd think that this would be incredibly bullish for the U.

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Speaker 1: S Dollar and US assets, and it will be for

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Speaker 1: a while. The thing is that the dollar milkshake theory

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Speaker 1: ends with the US dollar and US assets collapsing. To

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Speaker 1: note that this process will take many years and possibly

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Speaker 1: decades to play out, assuming Brent's theory is true. Now.

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Speaker 1: The third thing that caught my eye in the f

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Speaker 1: O m c S Financial overview was the rapidly rising

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Speaker 1: interest rates on credit card debt in the United States.

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Speaker 1: This is concerning because credit card debt in the United

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Speaker 1: States recently hit an all time high of over nine

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Speaker 1: thirty billion dollars I reckon one trillion is just weeks away.

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Speaker 1: This relates to the fourth takeaway, and that's that the

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Speaker 1: housing market continues to slide on the back of rising

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Speaker 1: interest rates and that banks are becoming less eager to

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Speaker 1: lend to consumers. This is essentially true of auto loans

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Speaker 1: and credit card related loans, which is understandable given the

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Speaker 1: statistics I just mentioned regarding financial stability. Stress tests conducted

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Speaker 1: in conjunction with the largest US banks suggest that they

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Speaker 1: would be resilient in the event of a severe economic downturn. However,

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Speaker 1: the f o m C couldn't say the same for

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Speaker 1: hedge funds and other entities in the financial sector due

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Speaker 1: to their high levels of leverage. This ties into the

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Speaker 1: fifth part of the fed's meeting, which was about its

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Speaker 1: economic outlook. If I understand correctly, the f o m

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Speaker 1: C is projecting that output of the U S economy

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Speaker 1: will be quote below potential until five and that unemployment

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Speaker 1: will simultaneously stay above four until that time. This might

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Speaker 1: have something to do with the fact that the f

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Speaker 1: o m C raised its inflation projections for the coming quarters. Logically,

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Speaker 1: this means that the FED will have to continue raising

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Speaker 1: interest rates, or at least keep them higher for longer

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Speaker 1: to fight this inflation, resulting in the aforementioned economic conditions.

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Speaker 1: For what it's worth, the f O m C expects

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Speaker 1: inflation to come back down to two percent as measured

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Speaker 1: by the core PC in This is expected given that

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Speaker 1: what the f O m C is effectively forecasting is

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Speaker 1: a long recession that will last at least two years,

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Speaker 1: and recessions tend to reduce inflation. As a cherry on top,

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Speaker 1: the fo MC cautioned that their baseline projections are quote

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Speaker 1: skewed to the down side. Put simply, they know that

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Speaker 1: their economic projections are likely to get worse, not better,

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Speaker 1: as more economic data comes in. This makes sense given

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Speaker 1: that an energy crisis could happen over the winter. More

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Speaker 1: about that in the description. Anyways, The sixth part of

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Speaker 1: the Fed's meeting was again about current economic conditions. The

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Speaker 1: f O m C again blames Russia's invasion of Ukraine

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Speaker 1: as being a primary driver of inflation. I'll just remind

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Speaker 1: you that central banks printed trillions upon trillions of dollars

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Speaker 1: in response to the pandemic in early Most of the

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Speaker 1: inflation related to Russia's invasion of Ukraine also has to

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Speaker 1: do with sanctions that don't seem to be working. But

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Speaker 1: let's not go there. Funnily enough, the f O m

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Speaker 1: C says that another decline in real GDP would be

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Speaker 1: helpful in bringing inflation back down. As a fun fact,

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Speaker 1: Bank for America seems to have predicted the sudden g

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Speaker 1: d P spike in Q three this year. The rest

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Speaker 1: of its projection says that real g d P will

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Speaker 1: again go negative starting next year. Take note. The f

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Speaker 1: O m C also discussed the status of household balance sheets.

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Speaker 1: Believe it or not, but the still record levels of

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Speaker 1: savings in the U S economy thanks to all the

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Speaker 1: pandemic stimulus. The catch is that most of these savings

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Speaker 1: are concentrated with wealthier individuals and institutions. There's a surprise.

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Speaker 1: On the lower end, individuals and institutions are starting to

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Speaker 1: report financial stress. I reckon the record levels of credit

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Speaker 1: card debt say it all. Even so. Jerome mentioned at

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Speaker 1: the fed's most recent press conference that the higher overall

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Speaker 1: savings should cushion the U. S economy from a severe recession.

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Speaker 1: Makes you wonder whether it was all planned. More about

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Speaker 1: that in the description. Now, after discussing the collective effects

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Speaker 1: the rising interest rates of central banks are having on

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Speaker 1: the global economy, the f o m C focused on

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Speaker 1: the supposedly tight labor market in the United States. I

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Speaker 1: say supposedly because there's lots of debate about how accurate

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Speaker 1: the unemployment statistics are. Case and point tech companies have

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Speaker 1: literally laid off over one hundred thousand people over the

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Speaker 1: last few months and are planning to lay off hundreds

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Speaker 1: of thousands more going forward. This might just be a

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Speaker 1: case of media bias, but it really looks like people

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Speaker 1: are starting to lose their jobs across the board. This

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Speaker 1: is implied by the f O m C in the Minutes,

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Speaker 1: as they note the supply of labor coming in line

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Speaker 1: with the demand for labor. They also note that most

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Speaker 1: of the demand for labor is coming from low skilled,

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Speaker 1: low paying jobs that recently fired six figure salaried software

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Speaker 1: developers probably won't be doing any time and soon. What

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Speaker 1: sucks is that the people working these low skilled, low

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Speaker 1: paying jobs are being squeezed the most by inflation. The

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Speaker 1: element that's been hitting most people the hardest is the

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Speaker 1: cost of accommodation i e. Rents. What really sucks is

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Speaker 1: the f O m C projects rents will be one

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Speaker 1: of the last inflation dominoes to fall now when it

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Speaker 1: comes to inflation expectations, the f O m C observed

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Speaker 1: that long term inflation expectations remain quote well anchored, as

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Speaker 1: Jerome loves to say. However, they cautioned that if long

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Speaker 1: term inflation expectations start to rise again, then it could

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Speaker 1: make their fight against inflation that much fiercer. What's fascinating

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Speaker 1: is that the f O m C seems to have

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Speaker 1: gotten into a small argument over how long it takes

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Speaker 1: for the Fed's rate hikes to affect the economy. The

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Speaker 1: section of the minutes breaking down this exchange is one

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Speaker 1: of the lengthiest by far, which is why I suspect

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Speaker 1: there was a lot of back and forth there. For

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Speaker 1: those who don't know, Jerome seems to believe that the

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Speaker 1: FEDS rate hikes have a near immediate impact on the economy.

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Speaker 1: His reasoning is that the economy has become so financialized

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Speaker 1: that it doesn't take more than a few months for

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Speaker 1: the effects of rate hikes to be felt. By contrast,

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Speaker 1: the academics on the f O m C argue that

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Speaker 1: it takes much longer for rate hikes to impact the economy.

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Speaker 1: This is because history suggests that it takes up to

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Speaker 1: eighteen months for the effects of rate hikes to be felt.

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Speaker 1: Jerome seems to have pushed back by pointing out that

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Speaker 1: this historical data is shaky at best. The f O

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Speaker 1: m C quote generally noted that their economic projections are

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Speaker 1: uncertain and they believe that inflation is more likely to

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Speaker 1: increase than decrease in the short to medium term. Some

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Speaker 1: members once again repeated that this is all Russia and

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Speaker 1: China's fault. Good thing, Jerome knows what's up. In terms

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Speaker 1: of U S. Treasuries, the f O m C one

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Speaker 1: again acknowledged that markets for US government debt are lacking liquidity,

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Speaker 1: but remain quote orderly. If you're wondering why liquidity is important,

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Speaker 1: that's because high liquidity means that you can sell a

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Speaker 1: large amount of an asset without moving its price. Now

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Speaker 1: I couldn't help but notice that some members of the

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Speaker 1: f O m C quote noted the risks posed by

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Speaker 1: non bank financial institutions amid the rapid global tightening of

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Speaker 1: monetary policy and the potential for hidden leverage in these

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Speaker 1: institutions to amplify shocks. I see you, Michael Barr. The

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Speaker 1: f O m C went on to agree on raising

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Speaker 1: interest rates by another seventy five basis points and patted

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Speaker 1: themselves on the back for raising rates so aggressively. They

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Speaker 1: agreed that the labor market is tight, at least on paper,

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Speaker 1: and that means they can continue raising interest rates while

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Speaker 1: claiming the economy is fine. After repeating the mantra that

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Speaker 1: the Fed is committed to bringing inflation back down to

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Speaker 1: its two pc target, the f O m C reiterated

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Speaker 1: that they want to slow the pace of rate hikes.

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Speaker 1: This is because they want to see how much the

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Speaker 1: already high interest rates will affect the economy and don't

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Speaker 1: want to risk breaking something. Now. The last part of

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Speaker 1: the Fed's meeting was about the f O m c

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Speaker 1: s monetary policy decisions. This part of the minute mostly

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Speaker 1: repeats everything from the previous sections. I couldn't help but

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Speaker 1: notice that the wording is almost identical to what Jerome

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Speaker 1: said during his press conferences. Copy paste is a powerful tool. Indeed,

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Speaker 1: in all seriousness, the f O m C agreed that

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Speaker 1: it must make it clear to the public that it

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Speaker 1: will continue to monitor incoming data when it comes to

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Speaker 1: future rate hikes. It seems that this is not being

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Speaker 1: underscored enough because what's currently being priced in by investors

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Speaker 1: is that the FED will pause and then pivot in

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Speaker 1: any case, The f O m C also agreed to

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Speaker 1: continue selling assets the central Bank's balance sheet. If you

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Speaker 1: watched our video about Jerome Pal's testa means to politicians,

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Speaker 1: you'll know he tacitly admitted that this balance sheet run

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Speaker 1: off will eventually lead to higher interest rates. Also something

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Speaker 1: nobody is noticing. Surprisingly, all members of the f O

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Speaker 1: m C voted in favor of the seventy five basis

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Speaker 1: point great hike and the other ongoing actions being taken

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Speaker 1: by the FED, such as the balance sheet run off.

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Speaker 1: This is surprising because it suggests that even the more

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Speaker 1: dovish members of the f O m C realize that

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Speaker 1: inflation will stick around for a while. This brings me

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Speaker 1: to the big question, and that's what all this means

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Speaker 1: for the markets in the coming months. In short, it

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Speaker 1: could really go either way. From where I'm standing, the

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Speaker 1: Fed has made it clear that it will adjust interest

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Speaker 1: rates in response to inflation and employment statistics. In case

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Speaker 1: you haven't noticed, things aren't looking too good on the

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Speaker 1: inflation front. Large amounts of stimulus, supply chain issues caused

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Speaker 1: by pandemic restrictions and yes, the war in Ukraine and China,

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00:21:06,880 --> 00:21:10,080
Speaker 1: zero COVID policies all look like they're going to keep

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Speaker 1: inflation high. The most inflationary factor, however, seems to be

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Speaker 1: the reassuring of supply chains. The disruptions to supply chains

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Speaker 1: caused by all the above has pushed many countries to

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Speaker 1: start bringing manufacturing back within their borders, especially the manufacturing

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Speaker 1: of microchips. If you watched our recent video about Goldman

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Speaker 1: Saxes analysis of the fed's two percent target, you'll know

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Speaker 1: it's possible that we will be entering a prolonged period

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Speaker 1: of higher inflation as a result. This begs the question

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Speaker 1: of whether the FED would accept a three or four

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Speaker 1: percent inflation rate, and the answer currently isn't clear. On

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Speaker 1: the employment side, things are looking kind of sketchy. I am,

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Speaker 1: by no means an expert in employment statistics, but I've

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Speaker 1: been hearing in many macro podcasts that these stats are

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Speaker 1: calculated in questionable ways. The same is true of inflation statistics,

357
00:22:06,160 --> 00:22:09,479
Speaker 1: but we all knew that already. This begs the question

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Speaker 1: of just how much the books can be cooked to

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Speaker 1: convince the American public that the job market is doing

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Speaker 1: just fine, or rather how hard. The f o MC

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Speaker 1: can squint at the numbers until they see what they want.

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Speaker 1: I reckon it'll be hard to keep up the illusion

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Speaker 1: when the average person's own lying eyes start to notice

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Speaker 1: that everyone around them is losing their job. I'm sure

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Speaker 1: the fact checkers will come in with full force on

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Speaker 1: that one, But so long as free speech on Twitter exists,

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Speaker 1: the truth will find its way out. Thanks Ellen. In

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Speaker 1: some then, it's going to be a very uncertain few

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Speaker 1: months for both the FED and therefore the markets. Assuming

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Speaker 1: the FED follows through on slowing the pace of rate

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Speaker 1: hikes and pausing sometime early next year, we could finally

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Speaker 1: see some recovery rallies in stocks, cryptocurrencies, and other assets.

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Speaker 1: That said, I have a bad feeling that we're going

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Speaker 1: to see a bearish catalyst that takes all assets much

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Speaker 1: lower than they currently are, a catalyst that will shake

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Speaker 1: retail investors to the corps and cause institutional investors to

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Speaker 1: run screaming into the arms of the FED. Let's hope

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Speaker 1: I'm wrong about that one. Earlier this year, we made

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Speaker 1: two very important videos about crypto. One was about when

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Speaker 1: the crypto bear market could end, and the other was

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Speaker 1: about how low cryptocurrencies could go during the bear market.

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Speaker 1: Over the last few months, we've been keeping a close

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Speaker 1: eye on the indicators we identified in those two videos. Now,

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Speaker 1: the good news is that they seem to be accurate.

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Speaker 1: The bad news is that the bottom isn't in yet. Today,

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Speaker 1: I'm going to explain why the crypto bear market will

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Speaker 1: likely continue, when it's likely to end, and estimate how

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00:24:01,040 --> 00:24:05,280
Speaker 1: low cryptocurrencies could go before it's over. This is a

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00:24:05,359 --> 00:24:08,879
Speaker 1: video you don't want to miss. I want to start

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Speaker 1: by saying that nobody knows the future, not even me.

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Speaker 1: Everything in this video is based on the best information

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Speaker 1: my research team and I could find. Note that this

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00:24:18,680 --> 00:24:22,520
Speaker 1: is information that could change at a moment's notice. It

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00:24:22,560 --> 00:24:25,399
Speaker 1: should also go without saying that nothing in this video

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Speaker 1: is financial advice. That said, the first reason why the

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00:24:30,480 --> 00:24:34,320
Speaker 1: crypto bear market is likely to continue is because retail

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00:24:34,359 --> 00:24:39,000
Speaker 1: investors haven't capitulated yet. In other words, lots of regular

398
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Speaker 1: crypto investors are still holding on to their coins and

399
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Speaker 1: tokens despite some massive losses. This is also true for

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Speaker 1: stocks and other assets with retail exposure. Now, that second

401
00:24:51,240 --> 00:24:54,840
Speaker 1: point is significant because the prices of tech stocks and

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00:24:54,920 --> 00:25:00,560
Speaker 1: cryptocurrencies are highly correlated. This correlation has been as apparent

403
00:25:00,640 --> 00:25:03,879
Speaker 1: in recent weeks as crypto specific factors such as the

404
00:25:03,920 --> 00:25:08,120
Speaker 1: ft X Alameda situation have caused a slight decoupling. I'll

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00:25:08,119 --> 00:25:11,159
Speaker 1: come back to that in a moment now. There was

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Speaker 1: some retail capitulation in mid October when inflation in the

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00:25:15,720 --> 00:25:19,480
Speaker 1: United States came in hotter than expected. This crash the

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Speaker 1: stock market and caused a small flash crash in crypto. However,

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Speaker 1: some sources suggest that most retail investors were still buying

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Speaker 1: those dips. Not only that, but the stock market has

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Speaker 1: been rallying since its recent October lows. This seems to

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Speaker 1: be because the minutes of the Federal Reserves most recent

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Speaker 1: meetings suggest that the central Bank will start slowing the

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Speaker 1: pace of rate hikes in mid December. It's also believed

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Speaker 1: that stocks will see a Santa Claus rally at the

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Speaker 1: same time. It's possible that the stock market will crash

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Speaker 1: in December when pension funds are forced to sell assets

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Speaker 1: and regular people sell assets to finance their holiday shopping.

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Speaker 1: It's also possible that the Fed will raise rates higher

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00:26:06,680 --> 00:26:11,119
Speaker 1: than investors are currently pricing in. This would also crash

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00:26:11,160 --> 00:26:16,719
Speaker 1: the stock market. Given the brutal macro backdrop of energy shortages, inflation,

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00:26:17,000 --> 00:26:20,560
Speaker 1: rising interest rates, pandemic restrictions, and the war in Ukraine,

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Speaker 1: the likelihood of a dump seems higher than that of

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Speaker 1: a pump. The technicals for stock indices like the SMP

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00:26:28,320 --> 00:26:31,960
Speaker 1: also suggests that stocks will soon resume their long term

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Speaker 1: down trends. Regardless, the stock market will continue it's longer

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00:26:36,760 --> 00:26:40,760
Speaker 1: term down trend at some point. While the reversal could

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Speaker 1: happen as soon as December, it's possible that it won't

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Speaker 1: come until early next year when consumers realized they took

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Speaker 1: on a bit too much debt during the holiday season

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00:26:50,480 --> 00:26:55,240
Speaker 1: and start selling. When the stock market correction inevitably comes,

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Speaker 1: it will likely take the crypto market lower as well.

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Speaker 1: The technicals for the now stacks suggest it could fall

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00:27:02,080 --> 00:27:06,840
Speaker 1: by around twenty from its current price in the next correction.

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Speaker 1: This would bring the NASTAC back down to its pre

436
00:27:10,560 --> 00:27:14,439
Speaker 1: pandemic levels, which would make sense. As I mentioned a

437
00:27:14,440 --> 00:27:18,159
Speaker 1: few moments ago, the prices of tech stocks and cryptocurrencies

438
00:27:18,359 --> 00:27:21,480
Speaker 1: tend to move in parallel. The only difference is that

439
00:27:21,560 --> 00:27:25,840
Speaker 1: cryptocurrencies are more volatile. I have a high beta with

440
00:27:25,880 --> 00:27:30,240
Speaker 1: the market. In practical terms, a twenty to drop in

441
00:27:30,280 --> 00:27:33,760
Speaker 1: the NASTAC would translate to a forty to fift drop

442
00:27:33,800 --> 00:27:37,479
Speaker 1: in large cap cryptos, and much more for those with

443
00:27:37,600 --> 00:27:42,000
Speaker 1: smaller market caps. The second reason why the crypto bear

444
00:27:42,080 --> 00:27:45,040
Speaker 1: market is likely to continue relates to the first, and

445
00:27:45,119 --> 00:27:48,800
Speaker 1: that's all the speculation and leverage that we continue to

446
00:27:48,880 --> 00:27:51,919
Speaker 1: see in the crypto market. As some of you will know,

447
00:27:52,400 --> 00:27:55,159
Speaker 1: an easy way to measure speculation in the crypto market

448
00:27:55,320 --> 00:27:59,240
Speaker 1: is to look at bitcoin dominance. For those unfamiliar, bitcoin

449
00:27:59,320 --> 00:28:01,800
Speaker 1: dominance is a measure of how much of the total

450
00:28:01,880 --> 00:28:06,920
Speaker 1: crypto market cap is just BTC. Because BTC is seen

451
00:28:07,040 --> 00:28:11,160
Speaker 1: as the safest cryptocurrency, Bitcoin dominance tends to rise when

452
00:28:11,240 --> 00:28:15,680
Speaker 1: the entire crypto market is falling, and bitcoin dominance tends

453
00:28:15,680 --> 00:28:19,680
Speaker 1: to fall when the entire crypto market is rising. As

454
00:28:19,720 --> 00:28:23,560
Speaker 1: you can see, bitcoin dominance has been stuck at around

455
00:28:22,800 --> 00:28:25,920
Speaker 1: for more than a year, and though it did rise

456
00:28:25,960 --> 00:28:29,359
Speaker 1: to almost fifty percent in June after terror collapsed, it

457
00:28:29,520 --> 00:28:34,280
Speaker 1: has since fallen back down to around What this means

458
00:28:34,400 --> 00:28:37,760
Speaker 1: is that money has resumed moving into all coins, and

459
00:28:37,840 --> 00:28:42,760
Speaker 1: that means there's still lots of speculation. The caveat is

460
00:28:42,840 --> 00:28:46,040
Speaker 1: that it's possible that E has also become a safe

461
00:28:46,040 --> 00:28:49,240
Speaker 1: haven in the eyes of crypto holders. This means that

462
00:28:49,440 --> 00:28:55,160
Speaker 1: part of Bitcoin's dominance is essentially being shared with ethereum. Unfortunately,

463
00:28:55,280 --> 00:28:58,240
Speaker 1: the dominance for both has been on the decline, and

464
00:28:58,320 --> 00:29:02,320
Speaker 1: this arguably proves that lots of speculation is indeed present.

465
00:29:03,080 --> 00:29:06,040
Speaker 1: If you need more proof, consider that meme coins like

466
00:29:06,120 --> 00:29:09,960
Speaker 1: doge coin were pumping as recently as last week. There

467
00:29:09,960 --> 00:29:13,080
Speaker 1: have also been a few headlines about small and medium

468
00:29:13,120 --> 00:29:15,920
Speaker 1: cable coins that have more than doubled in price over

469
00:29:15,960 --> 00:29:19,280
Speaker 1: the course of just a couple of days. That is

470
00:29:19,440 --> 00:29:24,760
Speaker 1: pure speculation or price manipulation. Until we stop seeing dog

471
00:29:24,840 --> 00:29:27,800
Speaker 1: coin pump by double digits every time Elon Musk teases

472
00:29:27,840 --> 00:29:31,320
Speaker 1: Twitter's upcoming features, then it's safe to assume that the

473
00:29:31,320 --> 00:29:36,800
Speaker 1: crypto bear market bottom isn't in yet. Now, speculation is

474
00:29:36,880 --> 00:29:41,440
Speaker 1: mostly the retail side of the equation. Leverage is where

475
00:29:41,480 --> 00:29:44,880
Speaker 1: the institutions come in. Some of you may recall that

476
00:29:44,960 --> 00:29:48,239
Speaker 1: there was a record level of eath liquidations at the

477
00:29:48,440 --> 00:29:51,720
Speaker 1: end of October when leverage traders got wrecked to the

478
00:29:51,760 --> 00:29:55,760
Speaker 1: tune of half a billion dollars over two days. The

479
00:29:55,800 --> 00:29:59,320
Speaker 1: collapse of ft X and Alameda also led to around

480
00:29:59,320 --> 00:30:02,240
Speaker 1: a billion dollar of liquidations for BTC and E in

481
00:30:02,280 --> 00:30:06,520
Speaker 1: the days that followed. Funnily enough, recent research by coin

482
00:30:06,600 --> 00:30:10,760
Speaker 1: shares suggests that institutional investors have been shorten the crypto

483
00:30:10,800 --> 00:30:15,320
Speaker 1: market at record levels. This logically means that they will

484
00:30:15,360 --> 00:30:19,360
Speaker 1: get liquidated at record levels if the crypto market somehow

485
00:30:19,440 --> 00:30:23,240
Speaker 1: rallies in December, which is possible given what I mentioned earlier.

486
00:30:23,800 --> 00:30:27,760
Speaker 1: It's important to remember that leverage doesn't just mean trading either.

487
00:30:28,440 --> 00:30:32,760
Speaker 1: Many institutions in cryptocurrency have given each other massive loans

488
00:30:32,880 --> 00:30:35,800
Speaker 1: over the last couple of years. Some of these loans

489
00:30:35,880 --> 00:30:41,000
Speaker 1: involved cryptocurrencies which have since fallen significantly. The elephant in

490
00:30:41,040 --> 00:30:43,440
Speaker 1: the room in this regard is f t X and

491
00:30:43,560 --> 00:30:47,320
Speaker 1: Alameda Research, whose ft T back loans eventually led to

492
00:30:47,360 --> 00:30:51,000
Speaker 1: their bankruptcies. If the headlines didn't make it clear enough,

493
00:30:51,200 --> 00:30:56,040
Speaker 1: the contagion of leverage between these and other crypto companies continues,

494
00:30:56,200 --> 00:30:59,680
Speaker 1: and it looks like Genesis Global will be the next

495
00:30:59,760 --> 00:31:04,400
Speaker 1: two collapse. More about that in the description anyways. The

496
00:31:04,560 --> 00:31:07,560
Speaker 1: third reason why the cryptobar market is likely to continue

497
00:31:07,840 --> 00:31:11,760
Speaker 1: is because Bitcoin's hash rate hasn't crashed yet. For context,

498
00:31:12,040 --> 00:31:15,840
Speaker 1: bitcoined hash rate has historically fallen by between forty and

499
00:31:15,920 --> 00:31:19,680
Speaker 1: fifty around the time that BTC hit its bottom, and

500
00:31:19,720 --> 00:31:23,360
Speaker 1: of course BTC leads the rest of the crypto market.

501
00:31:24,000 --> 00:31:28,120
Speaker 1: Bitcoin's hash rate collapsing around btc's bottom makes sense on

502
00:31:28,240 --> 00:31:32,440
Speaker 1: both sides of the cause and effect relationship. If BTCS

503
00:31:32,520 --> 00:31:37,160
Speaker 1: price falls, then it becomes unprofitable to mine BTC. This

504
00:31:37,480 --> 00:31:40,560
Speaker 1: forces the least profitable bitcoin miners to shut up shop,

505
00:31:40,680 --> 00:31:44,480
Speaker 1: which causes Bitcoin's hash rate to fall. As some of

506
00:31:44,520 --> 00:31:47,760
Speaker 1: you may have heard, lots of bitcoin mining companies are

507
00:31:47,840 --> 00:31:51,920
Speaker 1: starting to struggle, particularly the publicly traded ones. To give

508
00:31:51,960 --> 00:31:56,560
Speaker 1: two examples, in late September, Compute North filed for bankruptcy,

509
00:31:56,640 --> 00:32:00,120
Speaker 1: and in late October Core Scientific warned it was on

510
00:32:00,160 --> 00:32:03,320
Speaker 1: the brink of doing the same. This is because the

511
00:32:03,440 --> 00:32:07,560
Speaker 1: average cost of mining a BTC is currently around eighteen

512
00:32:07,680 --> 00:32:10,920
Speaker 1: k and the BTC price is below that at the

513
00:32:10,960 --> 00:32:15,080
Speaker 1: time of shooting. This means that most bitcoin miners are

514
00:32:15,160 --> 00:32:18,960
Speaker 1: losing lots of money and have likely been selling lots

515
00:32:19,000 --> 00:32:23,480
Speaker 1: of their existing BTC to stay afloat. This is evidenced

516
00:32:23,480 --> 00:32:27,840
Speaker 1: by glass nodes Minor net position change indicator, which suggests

517
00:32:27,880 --> 00:32:31,920
Speaker 1: bitcoin miners have been aggressively selling BTC since it's price

518
00:32:32,000 --> 00:32:35,840
Speaker 1: dropped below twenty k. It's possible that this selling has

519
00:32:35,840 --> 00:32:39,440
Speaker 1: suppressed BTCS price, but it's probable that most of this

520
00:32:39,560 --> 00:32:43,840
Speaker 1: BTC is being sold over the counter or OTC. If

521
00:32:43,840 --> 00:32:47,240
Speaker 1: you watched our video about bitcoin miners selling BTC, you'll

522
00:32:47,280 --> 00:32:50,320
Speaker 1: know that the lowest price BTC can go before the

523
00:32:50,360 --> 00:32:54,600
Speaker 1: Bitcoin blockchain is at risk is eight k. The thing

524
00:32:54,760 --> 00:32:58,000
Speaker 1: is that this was back in August, when Bitcoin's difficulty

525
00:32:58,280 --> 00:33:02,400
Speaker 1: was twenty lower, and it therefore required much less energy

526
00:33:02,640 --> 00:33:06,920
Speaker 1: to mine one BTC. What this means is that the

527
00:33:06,960 --> 00:33:10,080
Speaker 1: lowest price BTC could go before Bitcoin itself is in

528
00:33:10,120 --> 00:33:14,720
Speaker 1: trouble is now just under ten k. However, this assumes

529
00:33:14,920 --> 00:33:18,200
Speaker 1: that the Bitcoin difficulty will stay the same or increase.

530
00:33:18,840 --> 00:33:23,000
Speaker 1: This is unlikely, as Bitcoin's hash rate has finally started

531
00:33:23,040 --> 00:33:28,120
Speaker 1: to decline. As miners go bust, difficulty will decline. Accordingly,

532
00:33:28,640 --> 00:33:31,120
Speaker 1: this brings me to the other side of the cause

533
00:33:31,160 --> 00:33:34,680
Speaker 1: and effect relationship of Bitcoin's hash rate and BTCS price.

534
00:33:35,080 --> 00:33:38,560
Speaker 1: As I just explained, a decline in BTCS price can

535
00:33:38,600 --> 00:33:42,600
Speaker 1: cause a decline in Bitcoin's hash rate. However, a decline

536
00:33:42,640 --> 00:33:45,600
Speaker 1: in Bitcoin's hash rate can also cause a decline in

537
00:33:45,680 --> 00:33:50,240
Speaker 1: BTCS price. China's crackdown on crypto mining. Last May is

538
00:33:50,280 --> 00:33:54,240
Speaker 1: a great example. Bitcoin's hash rate fell first as miners

539
00:33:54,280 --> 00:33:59,040
Speaker 1: were forced offline and BTCS price followed. This is because

540
00:33:59,160 --> 00:34:01,800
Speaker 1: the news of a crypto mining ban in China was

541
00:34:02,120 --> 00:34:05,920
Speaker 1: very bearish, especially since other countries started raising concerns about

542
00:34:06,000 --> 00:34:09,360
Speaker 1: Bitcoin's energy use. You can find out why those concerns

543
00:34:09,400 --> 00:34:12,760
Speaker 1: are unfounded using the link in the description. I digress

544
00:34:13,600 --> 00:34:16,360
Speaker 1: now believe it or not, but Bitcoin could be about

545
00:34:16,400 --> 00:34:19,319
Speaker 1: to see the same cause and effect relationship play out.

546
00:34:20,040 --> 00:34:23,279
Speaker 1: That's because winter is coming and countries are trying to

547
00:34:23,400 --> 00:34:27,759
Speaker 1: conserve energy. The European Union recently warned that it would

548
00:34:27,800 --> 00:34:30,440
Speaker 1: put a pause on crypto mining in the event of

549
00:34:30,520 --> 00:34:34,120
Speaker 1: an energy shortage. In Canada, the province of Quebec is

550
00:34:34,160 --> 00:34:36,839
Speaker 1: trying to get approval from the federal government to end

551
00:34:36,880 --> 00:34:41,000
Speaker 1: its contracts with crypto minors, citing energy use concerns. The

552
00:34:41,120 --> 00:34:43,759
Speaker 1: U S state of New York recently passed a two

553
00:34:43,840 --> 00:34:47,359
Speaker 1: year crypto mining ban for environmental reasons, and we could

554
00:34:47,440 --> 00:34:51,719
Speaker 1: see similar degrees from other states. I suspect that a

555
00:34:51,800 --> 00:34:55,719
Speaker 1: crash in BTCS price, combined with crypto mining bands in

556
00:34:55,800 --> 00:34:59,319
Speaker 1: certain countries, will be enough to bring bitcoin's hash rate

557
00:34:59,400 --> 00:35:03,160
Speaker 1: down by the forty to it has fallen in previous

558
00:35:03,200 --> 00:35:08,759
Speaker 1: cryptobear markets. Again, chances are that BTCS price will bottom

559
00:35:08,800 --> 00:35:13,000
Speaker 1: around the time this happens, along with other cryptos. The

560
00:35:13,040 --> 00:35:15,880
Speaker 1: fourth reason why the cryptobear market is likely to continue

561
00:35:16,000 --> 00:35:19,520
Speaker 1: is the upcoming global energy crisis that's already being felt

562
00:35:19,560 --> 00:35:23,160
Speaker 1: acutely in many countries. The one that comes to mind

563
00:35:23,160 --> 00:35:26,360
Speaker 1: the most for me is Ukraine, with eighty percent of

564
00:35:26,400 --> 00:35:30,000
Speaker 1: the country reportedly being without power due to Russian attacks.

565
00:35:30,320 --> 00:35:34,120
Speaker 1: Although Ukraine will likely be able to repair most of

566
00:35:34,200 --> 00:35:37,680
Speaker 1: its energy infrastructure, it probably won't be enough to prevent

567
00:35:37,719 --> 00:35:42,040
Speaker 1: another wave of refugees from fleeing to neighboring European countries.

568
00:35:42,320 --> 00:35:45,640
Speaker 1: In case you missed the memo, other European countries aren't

569
00:35:45,680 --> 00:35:49,040
Speaker 1: doing so well on the energy side either. As such,

570
00:35:49,360 --> 00:35:52,560
Speaker 1: the influx of refugees alone could lead to blackouts in

571
00:35:52,600 --> 00:35:57,359
Speaker 1: some countries. This is because many European countries have said

572
00:35:57,480 --> 00:36:02,120
Speaker 1: they can avoid blackouts if citizens can't serve enough energy.

573
00:36:02,480 --> 00:36:05,520
Speaker 1: Something tells me they didn't factor in the demand coming

574
00:36:05,560 --> 00:36:10,560
Speaker 1: from millions of new refugees. European politicians also don't seem

575
00:36:10,600 --> 00:36:13,600
Speaker 1: to be factoring in the practical effects their proposed price

576
00:36:13,640 --> 00:36:16,960
Speaker 1: cap on natural gas will have. Setting a price cap

577
00:36:17,120 --> 00:36:19,880
Speaker 1: means that the demand for gas won't come down to

578
00:36:20,000 --> 00:36:25,000
Speaker 1: match supply. This means that gas shortages are almost guaranteed,

579
00:36:25,080 --> 00:36:33,239
Speaker 1: and history as shown this to be the case. If

580
00:36:33,280 --> 00:36:36,160
Speaker 1: that wasn't bad enough, the United States and its allies

581
00:36:36,160 --> 00:36:39,440
Speaker 1: will be imposing a price cap on Russian oil starting

582
00:36:39,560 --> 00:36:43,160
Speaker 1: on the fifth of December. Naturally, the U s Department

583
00:36:43,200 --> 00:36:46,359
Speaker 1: of the Treasury has threatened to sanction any country that

584
00:36:46,480 --> 00:36:50,960
Speaker 1: violates this price cap. Meanwhile, the Russian government recently announced

585
00:36:50,960 --> 00:36:54,120
Speaker 1: that it will stop exporting oil to any country that

586
00:36:54,200 --> 00:36:57,120
Speaker 1: goes along with the price cap. This means that the

587
00:36:57,160 --> 00:37:00,160
Speaker 1: countries that comply with the price cap could soon be

588
00:37:00,200 --> 00:37:03,040
Speaker 1: short on oil, and this comes at a time when

589
00:37:03,080 --> 00:37:08,040
Speaker 1: OPEC has cut global oil production already on the demand

590
00:37:08,120 --> 00:37:10,880
Speaker 1: side of the equation. Meanwhile, we have the United States,

591
00:37:10,920 --> 00:37:14,600
Speaker 1: which will soon be looking to refill its Strategic Petroleum Reserve,

592
00:37:14,880 --> 00:37:17,600
Speaker 1: which has been emptied by the current administration in a

593
00:37:17,600 --> 00:37:21,800
Speaker 1: bid to keep inflation low. Many investors are also expecting

594
00:37:21,920 --> 00:37:25,319
Speaker 1: China's economy to open up again sometime early next year.

595
00:37:25,960 --> 00:37:30,240
Speaker 1: The recent protest against the CCPs pandemic policies suggest China's

596
00:37:30,239 --> 00:37:34,799
Speaker 1: reopening could happen much sooner than initially expected. If it does,

597
00:37:35,280 --> 00:37:39,400
Speaker 1: it will create a massive surge in manufacturing related energy demand.

598
00:37:40,160 --> 00:37:44,040
Speaker 1: These and other factors will cause energy prices around the

599
00:37:44,080 --> 00:37:48,320
Speaker 1: world to skyrocket over the winter. This will do direct

600
00:37:48,440 --> 00:37:51,240
Speaker 1: damage to the economy in the form of higher prices,

601
00:37:51,360 --> 00:37:53,840
Speaker 1: and it will do indirect damage to the economy in

602
00:37:53,880 --> 00:37:57,120
Speaker 1: the form of higher interest rates from central banks trying

603
00:37:57,160 --> 00:38:01,360
Speaker 1: to fight inflation. Obviously, it's difficult to see how the

604
00:38:01,400 --> 00:38:04,560
Speaker 1: crypto market could go in any other direction, but down

605
00:38:04,960 --> 00:38:08,840
Speaker 1: in these kinds of conditions. Never mind the crypto mining bands,

606
00:38:09,040 --> 00:38:12,239
Speaker 1: there will be millions of people selling everything they can

607
00:38:12,560 --> 00:38:15,400
Speaker 1: to keep the lights on in their homes and businesses.

608
00:38:15,920 --> 00:38:20,600
Speaker 1: That includes cryptocurrencies. The fifth reason why the crypto bear

609
00:38:20,680 --> 00:38:23,520
Speaker 1: market is likely to continue ties into the fourth, and

610
00:38:23,600 --> 00:38:27,080
Speaker 1: that's the uncertainty around how high interest rates will go

611
00:38:27,560 --> 00:38:31,640
Speaker 1: and how high they will stay. This ultimately depends on

612
00:38:31,680 --> 00:38:35,240
Speaker 1: how high inflation goes and how high it will stay,

613
00:38:35,560 --> 00:38:39,280
Speaker 1: something will only know in a few months time. This

614
00:38:39,440 --> 00:38:43,320
Speaker 1: is probably why investors currently expect the Fed to stop

615
00:38:43,480 --> 00:38:47,480
Speaker 1: raising interest rates sometime early next year. To be clear,

616
00:38:47,840 --> 00:38:51,520
Speaker 1: stopping rate hikes isn't the same as bringing interest rates

617
00:38:51,640 --> 00:38:56,160
Speaker 1: back down. Rate cuts aren't expected to occur until later

618
00:38:56,280 --> 00:38:59,200
Speaker 1: next year at the earliest, and could come as late

619
00:38:59,239 --> 00:39:03,560
Speaker 1: as early to four. Then again, rate cuts could come

620
00:39:03,640 --> 00:39:06,800
Speaker 1: much sooner if something in the economy starts to break

621
00:39:06,880 --> 00:39:10,560
Speaker 1: because of high interest rates. This is basically why there

622
00:39:10,640 --> 00:39:13,840
Speaker 1: is a correlation between the FED dropping interest rates and

623
00:39:14,040 --> 00:39:17,480
Speaker 1: the bottom of a stock market cycle. Something broke, so

624
00:39:17,600 --> 00:39:22,279
Speaker 1: the FED dropped interest rates in response. More often than not,

625
00:39:22,680 --> 00:39:26,120
Speaker 1: the thing that would break was the stock market. This

626
00:39:26,200 --> 00:39:29,759
Speaker 1: is why investors have become so conditioned to buy the dip.

627
00:39:30,320 --> 00:39:32,960
Speaker 1: They expect the FED to step in to save the

628
00:39:32,960 --> 00:39:36,560
Speaker 1: stock market every time it crashes to record lows, because

629
00:39:36,600 --> 00:39:39,120
Speaker 1: this is what the FED has been doing for years.

630
00:39:40,040 --> 00:39:43,040
Speaker 1: This time it's different, however, and I know it's a

631
00:39:43,080 --> 00:39:47,239
Speaker 1: cliche to say that, but it really is. Inflation is

632
00:39:47,280 --> 00:39:51,320
Speaker 1: the highest it's been in almost half a century. Central

633
00:39:51,360 --> 00:39:54,920
Speaker 1: banks must bring this inflation down at all costs, or

634
00:39:54,960 --> 00:39:57,800
Speaker 1: else it will do even more damage to the economy

635
00:39:58,000 --> 00:40:02,760
Speaker 1: and could even lead to hyper inflation of some fear currencies. However,

636
00:40:02,920 --> 00:40:06,560
Speaker 1: this doesn't mean the FED won't blink when something breaks.

637
00:40:07,040 --> 00:40:09,800
Speaker 1: It's just that the threshold for what needs to break

638
00:40:10,080 --> 00:40:13,440
Speaker 1: is much higher than the stock market dropping by double digits.

639
00:40:14,040 --> 00:40:17,480
Speaker 1: As it so happens, some Fed officials are starting to

640
00:40:17,520 --> 00:40:20,919
Speaker 1: get concerned that something big will break if they keep

641
00:40:21,000 --> 00:40:25,520
Speaker 1: hiking rates. This is why the Federal Open Markets Committee

642
00:40:25,600 --> 00:40:28,560
Speaker 1: or f o m C, agreed it would be appropriate

643
00:40:28,600 --> 00:40:32,040
Speaker 1: to start slowing the pace of rate hikes. If you

644
00:40:32,080 --> 00:40:36,040
Speaker 1: watched our video summarizing the minutes of the feds aforementioned meeting,

645
00:40:36,360 --> 00:40:40,000
Speaker 1: you'll know the Central Bank may stop raising rates as

646
00:40:40,080 --> 00:40:44,080
Speaker 1: soon as January. Now, this is all well and good,

647
00:40:44,239 --> 00:40:48,400
Speaker 1: but I'll reiterate that pausing is not the same as pivoting.

648
00:40:49,200 --> 00:40:52,920
Speaker 1: Depending on the inflation situation, we could see lots of

649
00:40:52,960 --> 00:40:57,080
Speaker 1: capital flow to traditionally safe haven assets like government bonds

650
00:40:57,360 --> 00:41:02,839
Speaker 1: and precious metals. It's possible that cryptocurrencies like BTC will

651
00:41:02,920 --> 00:41:05,400
Speaker 1: be a part of this basket, but the fact of

652
00:41:05,400 --> 00:41:09,480
Speaker 1: the matter is that investors see bitcoin and other large

653
00:41:09,520 --> 00:41:14,680
Speaker 1: cap cryptocurrencies as being akin to tech stocks. These kinds

654
00:41:14,680 --> 00:41:18,280
Speaker 1: of assets will continue to struggle in a high interest

655
00:41:18,360 --> 00:41:24,320
Speaker 1: rate environment, which again could last until the final reason

656
00:41:24,360 --> 00:41:27,399
Speaker 1: why the crypto bear market is likely to continue has

657
00:41:27,480 --> 00:41:30,480
Speaker 1: to do with technical analysis. If you're subscribed to my

658
00:41:30,520 --> 00:41:32,880
Speaker 1: weekly newsletter, or have been keeping up to date with

659
00:41:32,920 --> 00:41:36,080
Speaker 1: our weekly crypto reviews, you'll know that I've been watching

660
00:41:36,080 --> 00:41:39,560
Speaker 1: a massive bare flag form on Bitcoin's monthly chart for

661
00:41:39,680 --> 00:41:44,160
Speaker 1: months now. This massive bare flag seemed to have finally

662
00:41:44,239 --> 00:41:47,960
Speaker 1: broken last month. I had initially expected it to break

663
00:41:47,960 --> 00:41:50,759
Speaker 1: back in July, but BTC managed to hold on for

664
00:41:50,920 --> 00:41:55,640
Speaker 1: three more months before breaking down. This begs the question

665
00:41:55,800 --> 00:41:58,520
Speaker 1: of just how low this bare flag will go, and

666
00:41:58,560 --> 00:42:01,719
Speaker 1: the answer really depends on how you measure it. If

667
00:42:01,719 --> 00:42:04,600
Speaker 1: you measure from the initial bare flag from three months ago,

668
00:42:04,880 --> 00:42:07,759
Speaker 1: then BTC is headed for the ten k range, and

669
00:42:07,920 --> 00:42:12,120
Speaker 1: in my opinion, this is the last stop. However, if

670
00:42:12,160 --> 00:42:15,440
Speaker 1: you measure from the more recent breakdown, then it's possible

671
00:42:15,520 --> 00:42:18,440
Speaker 1: that we've already seen the bear market bottom at around

672
00:42:18,480 --> 00:42:21,839
Speaker 1: fifteen K. What's interesting is that we saw the same

673
00:42:21,960 --> 00:42:25,239
Speaker 1: double bare flag pattern on btc's monthly chart during the

674
00:42:25,320 --> 00:42:30,560
Speaker 1: previous crypto bear market in back then. The second breakdown

675
00:42:30,640 --> 00:42:33,239
Speaker 1: initially looked like the bear market bottom, but in the

676
00:42:33,280 --> 00:42:36,680
Speaker 1: months that followed, BTC hit the target of the initial

677
00:42:36,760 --> 00:42:40,720
Speaker 1: break down to four K. As the saying goes, history

678
00:42:40,840 --> 00:42:45,080
Speaker 1: doesn't repeat, but it does rhyme. Considering all the factors

679
00:42:45,120 --> 00:42:48,600
Speaker 1: I've mentioned in this video and others. It's quite possible

680
00:42:48,680 --> 00:42:52,200
Speaker 1: that we will see something similar happen again. After all,

681
00:42:52,480 --> 00:42:56,160
Speaker 1: there's no shortage of bullish crypto catalysts coming in early

682
00:42:56,280 --> 00:43:00,160
Speaker 1: to mid twenty three that could cause a recovery. More

683
00:43:00,200 --> 00:43:04,040
Speaker 1: about that in the description. Now, before I go, I

684
00:43:04,080 --> 00:43:07,080
Speaker 1: want to bring your attention to one last indicator, and

685
00:43:07,160 --> 00:43:11,359
Speaker 1: that's the balance of BTC on cryptocurrency exchanges. As you

686
00:43:11,400 --> 00:43:14,239
Speaker 1: may have heard, the balance of BTC on exchanges is

687
00:43:14,280 --> 00:43:17,920
Speaker 1: the lowest it's been in almost five years. This means

688
00:43:18,160 --> 00:43:21,239
Speaker 1: that btc s price is going to be very volatile

689
00:43:21,280 --> 00:43:23,640
Speaker 1: in the coming months, and that means that the kind

690
00:43:23,680 --> 00:43:27,680
Speaker 1: of technical analysis we just did maybe way off the target.

691
00:43:28,280 --> 00:43:32,439
Speaker 1: For instance, BTC could temporarily for much lower than ten

692
00:43:32,520 --> 00:43:36,120
Speaker 1: k due to a lack of liquidity and liquidations by

693
00:43:36,160 --> 00:43:39,560
Speaker 1: any leverage traders who are left. This means that you

694
00:43:39,640 --> 00:43:42,960
Speaker 1: need to be extremely careful if you're planning on trading

695
00:43:43,000 --> 00:43:46,880
Speaker 1: cryptocurrencies in the coming months. I will be dollar cost

696
00:43:46,920 --> 00:43:50,359
Speaker 1: averaging into promising crypto projects, and you can find out

697
00:43:50,400 --> 00:43:53,200
Speaker 1: which ones are be accumulating by signing up to my

698
00:43:53,239 --> 00:43:57,520
Speaker 1: weekly newsletter. The link for that will be in the description. Anyways,

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00:43:57,600 --> 00:43:59,959
Speaker 1: Thank you so much for watching guys, and I will

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00:44:00,080 --> 00:44:03,960
Speaker 1: see you next time. Thank you so much for listening

701
00:44:04,040 --> 00:44:06,680
Speaker 1: to the coin Bureau podcast. If you'd like to learn

702
00:44:06,800 --> 00:44:10,279
Speaker 1: more about cryptocurrency, you can visit our YouTube channel at

703
00:44:10,360 --> 00:44:13,600
Speaker 1: YouTube dot com forward slash coin Bureau. You can also

704
00:44:13,680 --> 00:44:16,320
Speaker 1: go to coin bureau dot com for loads more information

705
00:44:16,320 --> 00:44:18,920
Speaker 1: about all things crypto. You can follow me on Twitter

706
00:44:19,040 --> 00:44:22,040
Speaker 1: at at coin bureau or one word, and I'm also

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00:44:22,120 --> 00:44:24,399
Speaker 1: active on TikTok and Instagram too,