you know with all this bitcoin buzz lately
especially since
you know
we shifted from quantitative tightening to easing right
it's easy to get lost in the noise definitely
so today we're gonna dive deep into your notes okay
and the research paper you shared
navigating Bitcoin's short term price movements
that's good and our mission today is to
really equip you with the knowledge
to cut through all the hype
cut through the hot
and understand what's really driving
Bitcoin's price action right
both now and in the future
yeah we're even gonna tackle some of those
intriguing questions from your notes
all right like how political events impact Bitcoin
and why Bitcoin dominance should be on your radar
I like it I think
one of the most fascinating things about Bitcoin
is that you know
beneath the surface volatility
there are actually recurring patterns yeah
especially when you zoom out
and look at the historical data
for sure it's like clockwork
yeah it's pretty amazing
everyone talks about these four year cycles
yeah
but can we really predict what Bitcoin is going to do
based on some calendar cycle
well not exactly predicting the future okay
but understanding the phases within these cycles right
can definitely give you an edge
they give it like the seasons of the year okay
you know winter's coming
even if you don't know the exact date
yeah the first snowflake will fall okay
I like that analogy yeah
so walk me through these bitcoin seasons yeah
what are we looking at here
so after a correction okay
we enter the accumulation phase
accumulation phase yeah
things are quiet prices are relatively low
okay and savvy investors start accumulating Bitcoin
okay this is like the planting season yeah
you know where the seas for the next bull runner zone
this is the time to be greedy when others are fearful
right exactly okay
then comes the markup face
markup face right
where excitement bills
demand increases and prices climb
yeah FOMO kicks in
everyone's talking about it yeah
fear of missing out yep FOMO
that's right things can get a bit wild
definitely a little crazy
so this is our Bitcoin spring
that's a good way to put it
full of growth and potential
lots of potential but what happens when summer ends
right and the leaves start to fall
that's when we hit the distribution phase
distribution phase yeah
okay market peaks early
investors start taking profits okay
things plateau all right
this is like autumn a time of harvest and consolidation
so we enjoy the fruits of our labor yeah
but also prepare for the coming winter
exactly and winter arrives with the markdown phase
yes this is the correction
prices decline some people panic sell
it happens and the cycle begins anew
the cycle continues okay
so understanding where we are in this four year cycle
can give us a roadmap yeah
even if we can't pinpoint the exact turns but you know
there's another force at play here
that can feel a bit like a financial roller coaster
yeah quantitative tightening and easing
hmm to be honest
these terms make my head spin a little
I hear you it's like okay
what does this mean for Bitcoin
yeah it's easy to get lost in the jargon right
but grasping
how these monetary policies impact bitcoin is crucial
okay think of quantitative tightening or QT
like hitting the brakes on the economy
hitting the brakes the Fed reduces liquidity
less money flown around less money flown around
okay
and investors tend to move away from riskier assets
like Bitcoin towards safehavens
like bonds or even cash
so during QT bitcoin takes a hit
yeah while these so called safehavens get a boost
it's like a rotation interesting
and what's interesting is that altcoins okay
you know
those other cryptocurrencies other than Bitcoin right
right they usually suffer even more during QT
oh really
yeah their value drops faster compared to Bitcoin
wow and we say they bleed against bitcoin
bleed against bitcoin yeah
this is a key reason
why many investors favor a bitcoin heavy portfolio
during times of tightening
so QT is like a crypto winter
yeah you could say that
and Bitcoin is the warmest coat you can find
I like that analogy
but what about quantitative easing or Q E right
is that the thought exactly
Q E is like stepping on the gas okay
the Fed pumps money into the economy
increasing liquidity more money flowing
more money flowing okay
and encouraging investment in riskier assets
including bitcoin including bitcoin
so Q E is party time let's not get ahead of ourselves
okay the market always throws curveballs right
but we did just see the Fed cut rates okay
and we're already seeing large cap
socks and gold rising uh huh
this could indicate a shift towards a risk on
environment yeah
which typically benefits Bitcoin
okay I'm starting to see the pattern here
yeah it's four year cycles
QT and Q E acting like this economic weather
but how do things like elections
and global events fit into all of this
that's where it gets really interesting okay
your notes mention the Trump trade and the Harris trade
right
these are perfect examples of how political events
even those seemingly unrelated to crypto
can send ripples through the Bitcoin market
I'm all yours break it down
okay let's start with the Trump trade okay
what was that all about and how did it impact bitcoin
so after Trump's election in 2016
okay we saw a market surge
fueled by expectations of tax cuts and d regulations
okay so the overall positive sentiment in the market
driven by those policies spilled over into crypto
even though crypto wasn't directly involved
exactly investors were feeling more confident
okay and taking on more risk right
which benefited assets like Bitcoin
interesting plus
the Trump trade also LED to
an expansion of global liquidity
OK as policies aimed at economic growth
encouraged investment right
this surplus liquidity
further fueled the rise of Bitcoin
so a rising tide lifts all boats
even the Bitcoin boat I like that
but it's not always smooth sailing right right
what about this Harris trade
how does that factor in so
the Harris trade refers to
how investors are positioning themselves okay
in anticipation of policies
associated with Vice President
Kamala Harris particularly
her focus on social infrastructure
and sustainable initiatives okay
these policies while important
could potentially lead to higher
long term interest rates and higher interest rates mean
less investment in riskier assets
like bitcoin yeah
if investors can get decent returns
from safer investments like bonds right
they might be less inclined to put their money into a
volatile market
like crypto it's a domino effect
yeah politics influences interest rates
which in turn influence bitcoin
exactly it's all connected
it's all connected yeah
speaking of interconnectedness
the research you sent
points to a surprising connection between Bitcoin
and the US labor market right
specifically the unemployment rate
that's right it might seem counterintuitive
yeah but the research shows a clear correlation
yeah every time bitcoin has failed to break through
a certain price trend line
hmm it's coincided with a rising unemployment rate
hold on so if more people are out of work
bitcoin goes down that's the trend we've seen
why would that be it all comes back to risk okay
when the economy weakens and unemployment rises
investors get nervous and pull back from risky assets
like bitcoin they get scared
yeah
and move towards those safe havens we discussed earlier
towards bonds towards bonds
gold things like that
got it this explains why we've seen
bitcoins struggle to break through
certain price levels like
uh huh even while the SMP 500 keeps climbing
so even though the stock market might seem strong yeah
Bitcoin is picking up on these
subtle signals of potential economic trouble
yeah it's further out on the risk curve
through the unemployment rate
that's right interesting
so the unemployment rate is kind of lay arc
canary in the coal mine
yeah you could say that
it's a key indicator to watch
very important to watch speaking of big picture trends
there's one more piece I'm curious about okay
bitcoin dominance yeah
what exactly is that and why should I care
so bitcoin dominance measures
how much of the total cryptocurrency
market is made up of bitcoin okay
it's a way to gauge bitcoin strength
relative to all the other cryptocurrencies out there
so a high bitcoin dominance means
bitcoin is king of the hill
pretty much okay
but how does that translate into actionable insights
for me as an investor historically
maintaining a portfolio that's heavier on bitcoin
has been a successful strategy okay
particularly during those QT periods we talked about
right where alt coins tend to underperform exactly
they bleed against bitcoin yeah
so when the going gets tough
sticking with Bitcoin is the way to go
makes sense
and here's where it gets even more interesting okay
the research suggests that
Bitcoin dominance tends to peak
while Bitcoin is trading above its 20 week SMA okay
which is a
technical indicator called the Simple Moving Average
it's like a moving average of the price over
the past 20 weeks okay
helping us see the bigger trend
so
we're not just looking at Bitcoin dominance on its own
right
we're also looking at how it relates to this 20 week
SMA exactly
it's like putting together the pieces of a puzzle
got it and right now
Bitcoin is trading above its 20 week SMA
okay
and its dominance is nearing a predictive target of 60%
wow
this could be a significant signal for investors
okay I'm definitely adding Bitcoin dominance
and 20 week SMA to my watchlist
good idea so
all signs point to
Bitcoin being the king of the crypto castle
yeah especially in these uncertain times
it's been a good performer
but how do we take all this knowledge
and translate it into an action plan right
how do we navigate this current cycle
and make smart investment decisions
that's the million dollar question right
and thankfully
your research offers some really practical guidance
right lay it on me
okay so it emphasizes avoiding emotional decisions
okay especially based on FOMO
you know it's easy to get swept up in the hype yeah
but a level headed approach is key
so no panic buying when
everyone's shouting from the rooftops about Bitcoin
going to the moon exactly
instead consider dollar cost averaging
dollar cost averaging what is that
that means investing a set amount at regular intervals
regardless of the price okay
this helps you write out the volatility
and takes the emotion out of the equation
so dollar cost averaging got it yep
what else think of yourself as an economic detective
an economic detective
keep an eye on key indicators like unemployment rates
inflation and treasure yields okay
they provide
valuable clues about the overall health of the economy
right which in turn influences the crypto market
so stay informed and be ready to adapt our strategy
precisely okay
remember those political events we discussed
yes stay up to date on policy changes okay
especially those that could impact global liquidity
like those potentially linked to the Harris trade right
keep an eye on the news
and understand the potential domino effects
that's it so we're dollar cost averaging
we're staying informed
we're keeping those political and economic
forces in mind yep
what about the structure of our portfolio
diversification is crucial
diversification while Bitcoin plays a central role okay
especially during times like QT
spreading
your investments across different asset classes is key
so
a diversified portfolio with a healthy dose of bitcoin
yeah what other assets should we be considering
large cap stocks yeah
can provides stability during uncertain times okay
they're like
the reliable work horses of the investment world
less volatile than smaller companies right
and then there's gold gold
the classic classic safe haven asset right
it tends to holds value during periods of inflation
or market turmoil
think of it as your financial anchor in stormy seas
stability this is safe haven right
those sound like solid additions yeah
what about something a bit more unconventional
I know a lot of people are curious about alt coins
alt coins yeah
the Wild West of crypto right
while Bitcoin is the undisputed king
uh huh the old coin landscape is vast
and full of possibilities
uh huh it's like exploring a new frontier
it is but with high risk comes high reward
so how do we even begin
to navigate this alt coin frontier
yeah it can feel overwhelming
it does absolutely
it seems like there's a new project popping up
every day there is
it's hard to keep up yeah
but a good place to start
is by focusing on specific sectors
okay within the crypto space right
you mention mean coins AI coins
gaming coins
RWA coins and layer 1 coins in your notes
I did each of these sectors has its own dynamics
and potential okay
so let's dive in right
meme coins meme coins
those are the ones with the funny dog logos right
coffin yeah
are they a serious investment or just a passing fad
meme coins are an interesting phenomenon
they are they often start as internet jokes or trends
right but some have gained significant value yeah
I've seen that driven by passionate communities
so investing in internet culture
is there any real substance behind those memes
that's the crucial question right
while some mean coins are purely speculative okay
others are actually building platforms and utilities
trying to leverage the power of their communities
to create something valuable
so even in the meme coin world
it's about separating hype from substance
exactly what about AI coins
AI coins yeah
those sound a bit more serious
they are linked to projects
using artificial intelligence
okay to build innovative solutions in various fields
ranging from finance to healthcare okay
it's a rapidly evolving space with lots of potential
investing in the future of tech
that sounds promising it is promising
but how can we tell which AI
projects have real potential right
and which are just writing the AI hype wave
look for strong teams innovative use cases
okay and a clear roadmap for development
and as always thorough research is key
research is key got it
don't let the buzzwords
distract you from the fundamentals
what about gaming coins gaming coins
they seem to be gaining a lot of traction yeah
they're part of the exciting world of blockchain gaming
blockchain gaming
where players can own and trade in game assets
oh wow
potentially earning real world value
so it's like combining the fun of
gaming with the potential of investing
yeah exactly
are these gaming economies sustainable in the long run
though that's the big question right
some gaming projects have seen tremendous growth
yeah but you need to carefully evaluate the gameplay
uh huh the toconomics
okay and the long term vision of the project right
look for games that are fun to play
it has to be fun it does right
and offer real ownership and utility for their players
it needs to be more than just hype
it needs to be a game people actually wanna play
exactly okay
what about those RWA coins
RWA coins I'm not a familiar with those
RWA stands for real world asset
real world asset
these are tokens backed by tangible assets
like real estate or commodities okay
it's about bringing traditional
assets into the cryptoworld
so why tokenize these real world assets right
what's the advantage
tokenization can make these assets more accessible
liquid in transparent okay
it can streamline transactions
and open up new investment avenues
for people
who might not have had access to these markets before
interesting so
it's about making traditionally ill
liquid assets more liquid and accessible
that's the idea okay
last but not least let's talk about those layer 1 coins
layer 1 coins what are those all about
those are the native cryptocurrencies
okay of blockchain platforms
that act as foundations for other applications
and projects they're like
the bedrock upon which the crypto world is built
so
investing in the infrastructure of the crypto universe
yeah in a way
but with so many layer 1 platforms out there
how do we choose the right ones
scalability security
and developer activity are cue factors to consider
okay look for platforms with a solid track record
uh huh
a vibrant community of developers building on them
right and a clear vision for the future
this is a lot to take in it seems like
the Alcoin universe is vast and constantly evolving
it is
any final words of wisdom for navigating this space
approach it with a healthy mix of curiosity and caution
okay do your research
diversify your investments
and don't be afraid to ask questions
good advice and remember
the crypto space is constantly evolving
so continuous learning is key
it seems like
navigating the crypto market successfully
is about
much more than just understanding the price of Bitcoin
yeah it's about understanding the bigger picture
the economic forces the political landscape
and even the psychology of the market
you hit the nail on the head
yeah it's about seeing the interconnectedness of it all
it is and most importantly
it's about managing risk and making informed
decisions that align with your goals
and risk tolerance speaking of risk management
I remember that powerful line from your research
protect your psyche so that you don't lose confidence
when the real Bull Run starts
yeah it's a reminder that this is a Marathon
not a sprint for sure
and staying mentally strong is just as important
as having a solid strategy
absolutely this market can be a roller coaster ride
it can be protect your capital hmm
but also protect your mindset right
don't let fear in greed dictate your actions
great advice so we've talked about bitcoin cycles
monetary policy
political events and the altcoin landscape
click forward a lot we have
we've Learned about dollar cost averaging
diversification and the importance of staying informed
right but what does all of this mean for the future
okay what are some potential scenarios for Bitcoin
and how can we position ourselves for success
regardless of what unfolds right
so we've laid a really solid foundation here yeah
but let's look ahead okay
what does the future hold for Bitcoin
yeah that's the big question
how can we position ourselves for success right
no matter what surprises the market throws our way
well well
we can't predict the future with certainty right
we can use what we've Learned
to develop a robust strategy okay
your research outlines two primary scenarios okay
the bullish one and a bearish one okay
and as we've discussed
the unemployment rate is a major factor right
the canary in the coal mine
exactly okay
let's start with the optimistic outlook okay
what is that bullish scenario look like
in this scenario the unemployment rate stabilizes
or even starts to decline okay
the Fed eases off on those rate cuts
and we steer clear of a recession
this points to a more positive economic outlook right
which as we know
tends to favor risk assets like Bitcoin
so we're talking smooth sailing
a healthy economy and Bitcoin potentially taking off
remember the market loves to keep us on our toes right
there are always unforeseen factors that can pop up
of course but in this bullshit area
we could see Bitcoin
finally breaking through that lower
high pattern okay
and embarking on a significant upward movement
a breakout to the upside that's what we like to hear
that's the bold case but let's face the flip side okay
what happens in that bearish scenario
if the unemployment rate continues to climb okay
exceeding the feds target
then a recession in 2025 becomes more likely
and a recession usually triggers a flight to safety
okay investors get spooked
pull back from riskier assets like bitcoin
yeah and seek refuge in those safer havens
we discussed earlier bonds and gold
exactly okay
this could have
result in another significant dip in the crypto market
so the unemployment rate is our canary in the coal mine
it's a good analogy low unemployment means party time
high unemployment means batting down the hatches
it's a bit more nuanced than that right
but you've got the right idea okay
that unemployment rate gives us crucial insights
into the overall health of the economy
right and its impact on risk appetite makes sense
it's a key indicator to monitor closely
okay two potential paths
bullish breakout or bearish downturn
how do we prepare for both possibility yeah
this is where those risk management strategies
we discussed come into play great
it's not about trying to perfectly time the market okay
it's about having a plan for different scenarios right
a plan that protects your capital
and your peace of mind okay
risk management 1:01 exactly
let's recap those core principles
all right what's the first rule
never invest more than you can afford to lose okay
this is fundamental to any investment right
but especially important in the world of crypto
where volatility is the name of the game
so don't go all in exactly
no matter how tempting it might feel
that's right got it
what else is crucial diversification
diversification diversification
okay I'm hearing you
we can't trust this enough right
spread your investments across different asset classes
bitcoin large cap stocks
gold Treasury bonds
and maybe a sprinkle
those old coins you're curious about right
a little bit of everything exactly
this helps to balance your portfolio
and manage your overall risk
diversification is Q check
yeah but what about timing right
when should we buy or sell
ah the million dollar question right
there's no magic formula right
but dollar cost
averaging can be a really effective strategy
especially in a market as volatile as crypto
remind me how that works again
instead of trying to time the market perfectly okay
you invest a set amount of money at regular intervals
regardless of the price hmm
this helps you
average out your purchase price over time
okay
and takes the emotion out of your investment decisions
so it's a discipline consistent approach
exact no impulsive buys or panic sells
that's it that makes a lot of sense
but what about those times when the market goes wild
okay
like during a massive Bull Run or a sharp correction
should we adapt our strategy
then flexibility is essential okay
while dollar cost averaging is a great foundation right
you might want to adjust your approach
depending on market conditions and your risk tolerance
so it's not a set it and forget it approach right
we need to stay engaged
keep learning and adapt to the ever changing landscape
absolutely stay informed
uh huh
monitor those key indicators like the unemployment rate
right and be ready to make adjustments okay
this has been incredibly insightful
good we've covered so much ground today
we have but before we wrap up
I have one last question okay
what about you uh huh
how are you positioning yourself
for the future of bitcoin right
what's your personal strategy
well
I firmly believe in the long term potential of bitcoin
okay I think it's a game changer
uh huh a technology that could revolutionize finances
we know it so you're in it for the long haul
absolutely
but I'm also realistic about the risks involved
that's why I stick to the principles we've discussed
a diversified portfolio
consistent dollar cost averaging into Bitcoin
right and staying informed about market developments
staying informed and what about those alt coins
are there any projects on your radar
that you're particularly excited about
I'm fascinated by the decentralized finance space
also known as Defi Defi
there's a lot of innovation happening there
and I'm curious to see how it unfolds
yeah Defi is definitely a hot topic
anything else catching your eye
I'm also intrigued by the potential of nfts
or nonforgible tokens
I think they could reshape how we view ownership
and digital assets right
it's a whole new world
they're creating entirely new economies
in ways of interacting online
defi NFTs
you're definitely keeping your finger on the pulse
of the cryptoworld trying to
but most importantly
you're approaching it all with a balanced perspective
combining your enthusiasm with caution
and smart risk management
that's the key takeaway
I hope our listeners will embrace
yeah Bitcoin
and the crypto space offer tremendous opportunities
but it's crucial to approach them with a clear head
a sound strategy
and a commitment to continuous learning
there's always more to discover
and the landscape is always evolving
beautifully said
this deep dive has been a fantastic journey
it has been
thank you so much for sharing your expertise with us
today it's been my pleasure
and to our listeners out there yes
the crypto world is full of surprises
stay curious stay informed
and never stop exploring
could have said it better myself
and on that note we'll wrap things up for today
but the conversation doesn't end here
we'll be back soon with more
deep dives into the fascinating worlds of finance
technology
and all the exciting intersections in between
until then happy investing
and remember knowledge is your greatest asset