Number one is what happens in bear markets. What I mean by that is that we saw the Terra Luna situation. We saw the UST collapse. Anything that’s not made to be on a firm foundation ultimately in bear markets. It’s shown to be faulty right. Now we’re seeing Celsius. I think they’re not allowing withdrawals right now which is sending shock waves. I mean that’s the equivalent in the crypto space of in the financial system. If a bank said you can’t withdraw your money. I mean that is not a good thing. I mean if this is an isolated Celsius incident that’s one thing if it becomes something that many of these other crypto brokers have then that’s really bad. But I will tell you this what we’re seeing today in the price action is what I would consider blood in the crypto streets which is just the same as blood in the wall street kind of wall street period. This is what I start saying for a short-term bounce. It is starting to be likely and again – it’s scary. But you have to just kind of keep out the emotion and focus on the charts.
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Let me bring up the charts and take a look and what you can see here is that. There’s this little interim support right over here at around 23 000 or so. That’s kind of what we’ve been dangling right on top of. So, that’s your short-term support on bitcoin. I ultimately still am holding strong that I think at the high end of a target. You’re talking about these 20 000 markers here, so I still think we’re going there. But again generally you don’t go straight to these levels. It’s very rare to see a collapse from where we were you know 32 000 or 31 000 a few days ago or a week ago down to 20 000 that quickly. Usually, you get to a level you bounce a little bit. Then you flush again ultimately, I still think that we could go as low as 12 000 12 000 is this pivot going back to 2019 one of the reasons why I think you could go that low there’s actually a few numbers one is it’s a measured move. If you take this distance from this high to this low which was basically a straight shot down.
Then you do a measured move that same distance from here let me zoom out from here it takes you down to 12 000. this would be the same distance repeating which again in technical analysis it’s called a measured move. It’s some of the symmetry of stocks and charts and crypto and then the other thing to keep in mind is that 12 000 also is the 80 to 85 correction move which is a standard kind of bitcoin crypto winter right so again 20 000 is my high end. That’s where I start kind of accumulating a hottle position where I plan to hold it for a little bit longer. But what I’ll do is I’ll divide my ultimate max that I want to buy into about five portions so let’s just say for Pete’s, for example, say gets twenty. It was a hundred thousand dollars. I would do twenty thousand at twenty thousand and then at maybe seventeen thousand another twenty worth et cetera all the way down.
Again, there’s lots of ways here. I’m still a long-term huge bull this is kind of exactly what I was expecting it’s the dot-com flush out you need to see 95 cryptos. Honestly, go away during this next one to two-year period. It’s why I’ve said so many times when I invest in cryptos I generally only invest in the top 20 because the top 20 hopefully will still be around to tell the tale just like in the dot coms. Obviously, that one flourished afterward. But I mean it is it is nuts out there. There’s no doubt about it. Painfully, nutty out there and investors don’t use leverage. I mean that’s just the bottom line; you use leverage in a bear market. You’re going to get slaughtered notoriously when I’m accumulating like I did a little buying of Ethereum today. I put four percent additional in my portfolio of Ethereum that’s it.
I do have about 20 positions in my portfolio of Ethereum here for a balance. Ethereum has broken down sharply and really Ethereum is leading the drop. I mean if you look at the relation to bitcoin Ethereum. This was your 2017 high and it’s already through that right. Here’s your Ethereum chart. Again, you can see how it’s leading bitcoin. It’s already taken out the 2017 highs right here. I think you have a couple of levels coming up the big one for me is going to be these 800 levels right here that’s going to be very big support so again basically below a thousand. I really start to think that there’s good value here. If you can say a cryptocurrency has value no one thought it would go here. I mean we were almost at five thousand dollars, so at a thousand dollars you’re basically down 80 percent on Ethereum. We’re getting awfully close to that trading at 12 25 right now. So, yes, it is nasty.
But again, if you’re someone that has that long-term vision and you’re not using leverage, and you’re trying to build a long-term accumulation portfolio. Then you start to, just a little bit, and you kind of say. Listen, I understand that these positions could go down 50. That’s just the crypto market right even from here. But, if you have that view of long term then there’s a lot more reward down the line on these good quality names. I mean and I’m not going to compare what’s going on with Celsius or UST necessarily to like a Bernie Madoff. But that’s when Bernie Madoff was discovered. When the bear market in 2008 began right because he could no longer, just fabricate. The X number of gains that he was on paper because people were saying. My goodness the markets are crashing. I need to pull money out well guess what Celsius is finding the same thing right now. They’ve stopped allowing that, so I mean really bear markets expose the weak hands or the fraudulent hands.
That’s what you’re starting to see and it makes a lot of sense I mean the crypto market is probably one of the shadiest unregulated markets out there, so in these types of environments. Those bad areas are going to get exposed. Everyone wants to be decentralized, no one wants these big institutions to control so much of it. But then when you get into a bear market, everyone’s like: “Oh my goodness!”. I hope the institutions come out and save the day and it’s like well in this environment like you said the institutions are not. This is beyond their risk tolerance right. They’re already cutting back risks by selling Tesla and selling some of these tech stocks. They’re not going to come into something that’s dropping by 20 a day and step in at these levels now. At some level hedge funds who really do take risks like that they will step in.
But they wait for the absolute collapse. They’ll wait on bitcoin to sub 20 000 probably, even sub 15 like you’re saying before they step in. I think this goes to the kind of thesis of like like, so I’ve been nibbling on bitcoin down here and I’ve been nibbling on Ethereum down here.
As we’re getting to this kind of crazy over short-sold short-term levels. Some of the things that I’m intrigued by is you have something called a time count here, which is two four six seven straight days in a row. If you look at charts they tend to bounce after if you get seven red candles or seven green candles in a row, you tend to get a short-term reversal in trend. It may only be short-term. But, for me, as a swing trader that’s an opportunity. But again, what I’m doing here is. I’m not like betting the farm right.
People are just so insane when they do this, especially in a bear market when you’re going counter-trend to the market. You literally dip that toe in the water, so you’re talking about four percent two percent of my portfolio. What I’m putting at risk initially, and then maybe I’ll add another two or four percent. But you’re not going like 10 times leveraging praying and hoping that this is the bottom because that’s how you go broke in a bear market. Again things have changed investors have to understand that the days of 2021 are now gone because the fed has said: “We are not continuing to print money and the government is in that same position”. You don’t have enough people saying. Let’s do this spending bill or this spending bill and so all of a sudden the sprocket’s been cut off and the market’s kind of left naked.
This article is a transcription of a video made by Jamie Tree
Original video: https://youtu.be/D25Zd3lVd1g