Bitcoin – BTC BTC March ’23 Outlook | The Crypto Byte Foreign [Music] folks and welcome back to another edition of the crypto bite joined here with Monty last week we talked a lot about the concept of an echo bubble not only in Bitcoin but also in the U.S Equity Markets ever since we’ve seen quite an increase in prices Bitcoin went up to a high of roughly 24 200 but now has backed down and lost a little bit of momentum so we’re going to talk about the Recent pullback and more Monty would you like to start us off with um like some technicals we’ve been looking at Bitcoin at very specific levels um yeah you know do you want to start here with uh The 20 smooth moving average yeah CJ you know one great thing about Bitcoin and training in general is that like it’s a lot like history in the sense that it tends to repeat itself and patterns that have shown themselves in the past tend to uh reappear in the future and we’re definitely Seeing that right now with Bitcoin what we’re seeing now is very very reminiscent of 2019 and you know we saw a surprise move to the upside the RSI continually testing down to 50 and bouncing From that level and we tried it up for a good you know what was how long did we Trend up during that time in 2019 you know only a couple months that’s another point about the echo bubbles is that they Happen in a very quick period of time so the clock is ticking I think we’ll be done or topped out in terms of Bitcoin by April if not potentially sooner but like you said in 2019 here a lot Of good instances of where we came back down to the 50 level where kind of bullish momentum had to reset that was a really good level to buy at historically so what’s interesting to me is now We’re coming up against the 50 level on the RSI very close to it in Bitcoin in our current Trend we haven’t bounced from that level yet but uh I think it could be an interesting place to kind of reload things like bito calls or Bitcoin Futures going into like the month of March Think February is probably going to be a little bit more choppy but is there any like options trades you’re specifically looked at yeah I’m with you on those bito calls I think that you know like I said history tends to repeat itself and the same is true with Bitcoin it’s a very cyclical asset in the way it moves um and also just the psychology of the Traders hasn’t changed much since then but I would say that you know we have a few more months of potential positive price action in both the U.S equities and in Bitcoin therefore I’m looking out to about March 31st as a date where I would start to consider you know taking some profit that’s when an echo bubble typically will Have run its course that’s what we saw in 2019 and I’ll look for a break in those things that we talked about you know things like the 20 period smooth moving average if you’re if you’re a day Trader or just a um even an investor I implore you to try to use the 20 period smooth moving average it’s great during trending markets and we have certainly been in a trending Market whether Let me ask you this yeah how have you looked at uh and used the 20 smooth moving average when I’m looking at the dxy first of all let’s talk about the dxy and its importance and Confluence With Bitcoin right now yes super important the dxy I mean as we record this um is dictating a lot of the Market’s price action in my opinion and on the way down it dictated a lot of the Market’s price Action as well but one thing you’ll notice and this is getting back to that 20 period smoothing average thing put it on your chart look at the dxy on its way up each time we got overextended we Came right back down and retested that level and bounced higher so that is a level during trending markets where you can expect to find either support or resistance the dxy has actually been trending down now so now that same level that was Prior support is acting as resistance and we’re Seeing that very much uh be the case you know yesterday we came up and tested that level and are getting rejected and that was reflected in negative price action in the equity markets so it’s uh it’s interesting CJ the 20 period smooth moving average in conjunction with the RSI I think has been one of the most accurate in indicators I love looking for that sort of Confluence between the technicals and those two together specifically for the dxy and Bitcoin I think have been great predictors of like where to reload or where to uh you know take some profit Yeah we are approaching critical levels um so that is pretty interesting have not seen a reversal in the trend yet though however one other metric that I want to talk about that I think has been very interesting and effective when locating local tops and local Bottoms in The equity Market is specifically looking at the put to call equity ratio in other words like how many puts and calls are there in terms of open interest so if you can see this chart below each time this blue line spikes that is an indication that puts are being bought very Heavily relative to the Call’s open interest within the market and when we’ve seen these spikes in the blue line here that go above 1.2 or 1.1 we’ve seen a local bottom very quickly after the fact and as you can see you know we’re not there at all we’re actually in a very Bullish posture which means that this correction potentially could continue but if we reach that 1.1 or 1.2 level again where we’ve seen local Bottoms in the equity put to call ratio that’s a level that I’m going to be paying attention to very carefully and well probably looking to Get more calls or just Longs in general if we hit that level because I think it’s going to be instrumental in both the equity Market as well as Bitcoin absolutely and you need no more evidence Then go back to our our last episode of the crypto bite when we talked about you know some prediction from the big institutions and Banks they were all overwhelmingly negative for q1 and that Led a lot of retail traders to jump the gun buy puts and of course because of that you know they were forced to capitulate and we’ve had a very positive q1 so you know just go back and look at The last episode retail Traders were stacking up with the puts and that was actually a great sign that we were making on local bottom so now that uh you know we’re getting close to that again Um you know perhaps we are you know getting close to making the local bottom but I would keep an eye on that put call ratio because that has been a great indicator of you know where price is headed All right I want to talk about narratives now obviously AI is the biggest narrative people have been talking about lately kind of reminds me of like when we saw the metaverse hype and then that dies and then nobody talks about it I assume the chat gbt and AI technology will Probably follow a similar path but you know in crypto we’ve had AI narratives we’ve also had a like LSD narratives liquid staking derivatives like Lido has been really going parabolic but I think you’re starting to see the end of these particular Trends one asset that has really done Well in terms of crypto on its AI narrative is fetch AI so looks like we’ve peaked at 60 cents I mean do you think it’s time to think about I wouldn’t belong this I mean do you think about The AI narrative dying down and maybe shorting some of those um yeah I absolutely think about it but one thing that I have learned as a crypto Trader and any and training around narratives for years right we’ve talked about all these various narratives you mentioned the metaverse and you Know trading around it is and this is a classic quote the the market can remain irrational longer than you can remain solvent so yes AI may be a fad but it can continue for a long time and especially In crypto where you have people trying to fade these narratives stacking up with the leveraged shorts then you get liquidations that just drives price higher so I’m waiting on this one the AI Narrative still seems to be alive and for the time being you know I don’t want to get in the way of fetch it’s kind of like the opposite of catching a falling knife trying to short this one into um you know fading that narrative that AI narrative is tricky because it can Continue for a while and it seems like people um are still kind of banking on AI and trading kind of being the future of you know markets so I don’t know I’m not not looking along in Here but also very reluctant to short it because I’ve seen irrational pumps like this in the past and they can continue to run for a lot longer than you might think has already ran for so long all we hear about um the thing that’s interesting and you mentioned how You know these things can can go on for a long time it’s interesting to try to gauge the momentum and and see where we are in the cycle I think since we’ve had experience trading these alt Cycles it’s very important to understand when These pumps are starting to get faded very quickly on narratives so a really good example that I have here on the chart is near protocol this Spike that they had a couple days back was just them talking about an AI integration or an AI announcement nothing substantial or or deliverable Yet to announce something and to be part of that narrative just to pump their coin you know you’ve seen a lot of projects do that and typically when the market is strong and there’s still a lot of capital willing to like ape into these projects you’ll see continuation but within two Hours after that news announcement the move was virtually you know it round-tripped it was faded so you’re already starting to see like a Slowdown in momentum of the altcoins I think for the last two weeks the altcoin total market cap has not gone up so in other words it’s just been you know Basically trades getting recycled and capital rotations so that is a bit concerning but I I think it just bodes to the fact that we’re like I think we’re like sixth seventh inning in this Echo bubble and then we’ll probably continue a macro downtrend yeah so what are you looking at in Terms of like upside targets we’re talking about end of q1 March 31st you know what what price are you looking at for Bitcoin to be at at around that time to confirm the end of this Echo bubble thesis It’s Tricky um I was I would say I would be offloading everything above 28k doesn’t mean we can’t go to 30 or 35 or even 40 for that matter but the reason why I’ve dialed it back a little bit in recent times and I have less exposure is because Um you know we’ve seen tons of speculation in the altcoins we’ve seen a lot of capital come into things like Phantom Aptos optimism Lido the list goes on and we didn’t have that in 2019 virtually All the capital was a vacuum into Bitcoin and you saw Bitcoin dominance go up you saw Bitcoin go um you know straight to four to six to eight to 14K and ethereum very much like was just lagging The whole time so I asked myself like okay if there’s a limited amount of capital that’s coming in the space or being recycled around the space um and it’s already being deployed in altcoins is it Going to go back into Bitcoin or is it already missed the boat does that does it kind of make sense like it’s like yeah yeah that absolutely makes sense and I think that just has to do with The fact that you know I think sometimes we as as U.S Traders Overlook the importance of Asia and the role that they play in this market but they play an incredibly important role especially when It comes to speculating into all coins like you see it a lot um you know look at the volume that binance does and Perpetual Futures in terms of like their altcoin exchange it’s incredible like they are speculating into the alt so yeah I agree that right now we are seeing speculation into the Alts that could have something to do with the fact that you know you have things like the Cosby the nikai the Hang Seng Index all have been performing pretty well uh showing signs of v-shaped recovery and I think allowing some of these you know uh Eastern Traders room to Speculate and I think all that Capital will flow back into Bitcoin eventually and that will Mark the top then eventually we’ll get some all coin speculation you know some wild crazy altcoin moves that we typically get when Bitcoin tops but I agree with you that around 28k is a feasible Target for like end of quarter and would line up with what we’ve seen in previous Echo bubbles two more things I want to talk about I’ll talk about the bito options in just a moment but you know we’ve had long exposure price has gone down from 24 to 22k roughly How do you like to hedge or what do you think is a good option to hedge if you still have long exposure during a correction of the echo bubble yeah that’s an interesting question because it’s kind of a counterintuitive answer and if you ask like a risk manager they would say that Um that’s not a proper hedge but what I like to do is actually short coinbase by coinbase puts even though Bitcoin and coinbase are highly correlated the times in which we see Bitcoin move the most tends to be during liquidations flash whether it’s a flash crash or or sharp move up It’s during liquidations that’s something that doesn’t affect coinbase coinbase doesn’t have Perpetual futures of course they have options being traded but not Perpetual Futures so we’ve actually seen divergences between Bitcoin and coinbase like today you know coinbase is down tremendously while bitcoin’s hanging in there Um that has to do with the Perpetual Futures and also the role that Asia plays they’re not speculating in a coinbase that’s mostly Western speculators that are trading you know stocks that are in the queues and in the s p so again that’s another thing that I think Bitcoin Has going for it and that you can use that allows you to use coinbase puts as a hedge is the fact that one Perpetual Futures are playing a huge role in this market and two so is Asia those Are two variables that don’t affect coinbase and thus I think makes it a valid Hedge for uh your long Bitcoin position nice yeah the long Bitcoin position I have is still March 31st the 1618 call spread so being able to hedge that out in the interim whether it be through shorting altcoins Like Aptos or Phantom or you know hedging some downside with puts and Bitcoin related companies I think that’s a definitely a nice strategy um anyways if you guys would like to learn more feel free to check out our service below at marketrebellion.com forward slash try crypto not Only do we discuss crypto trade ideas but we’ve been trading a lot of FX lately there’s been a Aussie dollar trade and dollar Yen trade that have been quite interesting lately as well as many macro equities and uh so on so without further Ado thanks Monty and um take care everyone [Music] foreign #echobubble #longplay #outlook2023 Matt and CJ trace their Bitcoin outlook to March 31st based on the echo bubble they called in the last episode.They also discuss what other indices may be playing with $BTC’s price at the moment.Gain a crypto trading edge with Market Rebellion: https://marketrebellion.com/subscriptions/crypto-trading-room/?utm_source=youtube&utm_medium=organic&utm_campaign=cryptobyte Check out our free crypto trading guide: https://marketrebellion.com/ultimate-crypto-trading-guide/?utm_source=youtube&utm_medium=organic&utm_campaign=cryptobyte DISCLAIMER: Our feedback and viewpoints are for educational and informational purposes only.The views expressed by us are our own, and not necessarily that of Market Rebellion.We are not giving investment advice, tax advice, legal advice, or other professional advice.If we refer to a specific cryptocurrency, token, or coin (“Digital Asset”), that should not be construed as a recommendation to buy, sell, or hold that Digital Asset.
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