Today we are joined by veteran trader Gareth Soloway to talk about bitcoin, ethereum, altcoins, and more. Gareth is a Pro Trader with over 20 years of experience. We will talk about many different things. Why is Bitcoin going down? Will cryptocurrency rise again in 2022?
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Gareth’s Background
Welcome back, everybody, here with 20-year trading veteran Gareth Soloway. Thank you for joining me.
Thanks for having me. It’s truly a pleasure.
It’s a pleasure for me and just so our audience can, for those who don’t know you, get to know you a little better, and correct me if I’m wrong. When bitcoin last year was at 60k, you were calling for 20k. When bitcoin hit 20k, you were calling for a bounce, which happened. So I’m just here to talk to you about, where do you see bitcoin going?
Yeah, so it’s been a wild ride. Um, you know, one of the things I’m a little different from most crypto people is that I screw up with stocks, right, so I still do a ton of stocks. But what that enabled me to do is kind of start in the late 90s when the dot-com bubble was like, the crazy moves. And it was so interesting because it was like the beginning of my career and it was in 2021 when you had some of these dogecoin moves and stuff like that, because I’m like, “Wait a minute, I remember that happening exactly with like dot-com, like pets.com, like these weird random.com companies.” So I started to be a little bit more nervous. I’m like, this is exactly like a bubble, and, ultimately, we know what happens when bubbles collapse. You know, everything gets demolished, as we’ve seen. So yeah, bitcoin has had a big fall. I still remember last year in Dubai at the Blockchain Summit. I was the least popular guy there because I was warning people. I was like, “Bitcoin is going to collapse. Be ready.” It’s going to be $20,000, and, of course, no one wanted to talk to me. I still remember presenting. There was like a gasp when I said that because everyone was like “Oh, it’s a 100,000 by the end of November”. But yeah, fascinating stuff to watch and it’s the biggest thing to understand that this goes for everything commodity. «So when you’re trading anything, you’re not trading ethere. So, you’re trading humans’ emotions, right? So how do people feel? One of the reasons why I love charting is because it’s so pure in that. It’s not about what you’re trading; it’s just the people that are trading it. The human emotions that are driving it are greed and fear. The two most carnal emotional drivers of the human race, that’s what the rules price.
Gareth’s NEXT Price Target for Bitcoin?
I mean, it’s sort of a bounce right now, which would indicate greed, but I think the market still seems very fearful, so what are your general next price targets for bitcoin?
So if you don’t mind, I’ll show you my chart. We can kind of go over some things here. So what do we have here? And again, this is the beauty of it. It’s no coincidence that Bitcoin found a bottom right around that 2017 high. Technically speaking, that is a major retrace. Basically, you had the breakout right here and then the big long ups and downs and then we came back to settle in, so in the short term, that was support. It was kind of one of those easier calls for me to say, “Yeah, it’s going to bounce even in spite of having a voyager and a Celsius with the bankruptcies.”
You know, it’s still there was so much negativity that it’s hard for me when there’s that much negativity to not be slightly positive and bullish. I’ve just trained my mind to start kind of being a contrarian. So, what do we see? What we’ve seen here is this kind of choppy sideways action slowly moving up. I’ll show you the coolest chart here. So if we bring up a parallel channel and we just connect the recent lows, I want to show you what happens if we extend that up. You basically connect the recent highs right here. Right high pivot right to here and what that tells you is that right around $25,000 you’re going to start running into a little bit of resistance, $25,000.
And, interestingly enough, if you look at the Terra Luna collapse low, that happens to be right up in that same range, so expect some trouble for Bitcoin. I’m not saying it’s going to fall back and collapse back down from there. But I think 25,500 is my short-term price target and then after that, if it can get through 25,500, you have a good shot at going to about 28,000 – 30 000. Here you can see all these little kinds of sideways action. What that is, it’s creating this kind of resistance point. So if the price trades up into that, it will slam into it. And it’s going to have a lot of trouble getting out of that range, and let me just explain the psychology of this, I hope you don’t mind. You’re kind of going off on these tangents, but when what happens, when you the reason why this is now resistance is that, psychologically, you had a lot of people buying, right? That’s when you go sideways. So it tells you there’s an equal number of buyers and sellers, so there are a lot of new buyers that were kind of taking a stab right here and it broke down. So, all those people are underwater in their trade. And the reason why its resistance is when the price comes back to that level, those people are finally like, “Thank goodness I’m break even. Thank goodness, now sells I’m just done with this and I’m going to get out”, right?
So that’s why that selling pressure should come out there. So, the bottom line is, I am still bullish on bitcoin in the near term, but I expect 25,500 to be resistance if it can get through that. 28,030 is kind of my upside secondary target there. So yeah, it’s fun stuff. I mean, I love charting. I love being able to kind of look at things from the psychological aspect of reading human emotions, and it’s amazing how you start. If you think about that and you look back when we were at 68,000 and the bullish sentiment was so pervasive, think about now saying, “Wait a minute now.” I know emotions and you do the opposite. Maybe I shouldn’t have been long at 68, 000.
Will The Fed Crash Bitcoin Later This Year?
When the Federal Reserve announced 75 basis point rate hikes last week, it was a good indicator that they may have peaked. Talk to me about the long-term outlook for Bitcoin at the end of 2022 and into 2023. How do all those macro-factors play into bitcoin?
Yeah, and that’s such a good question because the Fed absolutely has an impact. One of the things that I always say to crypto traders is to remember when you’re in crypto. It’s not an isolated bubble. You need to know what the Fed’s doing. You need to watch the dollar even the stock market. We know that bitcoin has followed the Nasdaq very closely in terms of technology because it’s a risk-on asset. So when it comes to the Fed, the Fed just recently raised rates by 75 basis points. The key here is to understand what their outlook is after that. So going into this, everyone knew they were going to raise 75. I saw it everywhere on Twitter and people were right. The question was, and the reason why we’ve seen a continued rally is because the statement afterwards when Jerome Powell did his press conference was very dovish. He basically admitted that they were almost done hiking. If they’re almost done hiking, that means a more lenient Fed, which means more money in the system, which is a positive for Bitcoin. More money can go into bitcoin, and you can see it go up in the short term. I would say over the next couple, like the next month or so, I’m bullish on that aspect. Now you asked me about six to twelve months out. This is the kicker and this is what I’m really fearful about. One of the reasons why I still think we have one more leg down on bitcoin is that we have inflation still at 10%. It’s going to come down. We’ve seen commodity prices drop substantially. So that tells us it’s going to come down, but it’s not going back to 2%. It’s probably going to stay around four to 5%.
The reason why that’s really bad is because as we go into a recession, and we saw the GDP number today basically telling us we’re in a recession, the Fed cannot save us like in past recessions. So, if you go back to 2009, we had this great recession. The Feds printed trillions of dollars. COVID comes up with trillions of dollars. Well, that was all okay because inflation was 2% or under with 5% inflation. If they start printing again, you’re going to see inflation at 15-20%. So they can’t do that, and so how do they save the economy? If bitcoin is still a risk asset, if the Nasdaq collapses, if the SP collapses, I think again, bitcoin has one more leg down to probably around $12-13,000. So my six to twelve month target is one more leg lower, then a bottom is put in and then I think the next great Bull Run starts, probably in late 2023 or later. And then again, you’re looking at an easy 100, maybe above.
Can Bitcoin Fall Below 10k?
So you don’t think a sub-10K bitcoin is in the cards in the most probable sense. Anything’s in the cards in your opinion?
I’m hoping it’s not. So there you have it. This is the worst case scenario right here. This is the one that has bitcoin going down, maybe as low as 25,000. But let’s try not to talk about it too much, but basically, if you look at the dot-com bubble, the similarities are eerie, like, for instance, just a couple similarities when bitcoin was topping out last year. We had February. This February was known as the crypto-crypto super bowl. We had a slew of crypto-Super Bowl commercials. If you go back to the dot-com era just before the collapse, all these things were known as the “dot-com super bowl.” The market caps are $3.1 trillion at the highest for bitcoin and crypto and $2.9 trillion for cons. The same sorts of things are replicated. The reason I bring that up is that if Amazon was a $112 stock back then, it collapsed to about $6 during the dot-com bubble, and then it went to $350. So think about the x times from $6 to $350. If bitcoin drops that amount, it puts it at about the 350 mark. That is the worst-case scenario. I don’t think anyone wants to see that, but that would be the absolute washout of the crypto space, which I think you would agree with Austin that you almost need to see some sort of washout. Because how does a spaceship work with 20,000 cryptocurrencies? I just don’t know. It just seems like too much for me.
100%, Chip, Doge. They’re still in the top 15. And you know they’re above an avalanche and some of these others. So, does a washout still make sense to me?
Yeah, I mean, I’m guessing 12-13,000. We’ll see, but you might be right. And you know, I kind of hope it’s not, but if that’s what it takes to clean out the junk, think about the Darwinian thought process of the strong surviving. That’s the healthiest thing. So a lot of crypto traders are like, “Oh my goodness, I hope that doesn’t happen.” But if you really believe in crypto, the long term of crypto, that’s the healthiest thing to happen because, I mean, look at Amazon, and look at Google. I mean, all these companies were around right around that time frame, and you had to get rid of the junk so that they could become multi-trillion dollar companies.
Once Bitcoin Bottoms How Long Until New ATH?
So once we do bottom, how long will it take, in your opinion, for bitcoin to reach a new all-time high at around what price?
So I would say again, you’re probably bottoming in the next 6 to 12 months and then I think you’ll kind of repeat what you did in 2017, which is you’ll have this choppy sideways time for like six months and then you’ll start your incline. I think by 2024 you should be hitting that new all-time high zone. I know it’s not what people want to hear. They want to hear it’s instantaneous, but let it breathe, let it kind of get some energy back and then we’ll all be rewarded later on.
Safest Place To Invest Your Money in 2022?
What would you say to somebody coming into the market today? What would be a safe place, the safest place to put your money in 2022?
Of course, that would be gold. I think long-term bitcoin far outperforms gold. But you can’t deny the fact that if you go back to the beginning of this year, gold was the best performing asset between bitcoin and the stock market. It’s been the safest place to go, and I also think that’s because of the uncertainty about regulation of crypto. It’s keeping a lot of money out. And so I think the safest play is, if you’re like, hey listen, I want to put my money someplace. I might only make 5% or 10% on it in a year, but that would be gold right now. I think it’s the safest place eventually. I think gold. But bitcoin outperforms, but it’s going to take that. This bear market is over.
Why The Stock Market Will Go Lower in 2022
Talk to me about the stock market. I’d also like to return to the Fed. The next Fed meeting is in September, and you said a potential bottom is in the next six to eight months. I believe you. Do you think that correlates with the stock market bottoming and the Fed meeting pushing the final rate hike up?
Yeah, so I think, with the stock market, it’s going to be really interesting. So, I believe another big flush is on the way for the Nasdaq and the S&P 500. I think you’re seeing another 20-25% down on those and I think Bitcoin’s going to get affected. I think a minimum of 12-13,000. We talked about the worst-case scenario. But I think there’s going to be a flip point where at some point you’re going to see an economy. That’s mired in stagflation, which means higher inflation with no growth, which is kind of like the bogeyman for economists, right. It’s the worst case scenario, and I think at some point, bitcoin will flip and start to go up during that period while the markets languish. That’s the reason, I think. That is because eventually we’re going to be stuck in this recession and the fed is going to have to start printing again, and as soon as the fed does that, you’re going to see people saying, hey, you know they can’t print too much because the economy can’t handle inflation. But it’s just that signal that causes bitcoin to become a safer bet, as more and more money flows into that safe haven asset, which, once again, bitcoin’s not a safe haven asset right now, but I do think it will eventually become that digital gold, and that’s where it starts to outperform. So I kind of see a really tough road for the economy for the next multiple years, but I think bitcoin bottoms out before the end of that and actually starts to move back up so much perspective.
I want this interview to be a companion piece to your thoughts on ethereum altcoins. So if you know this one was first, be ready for that ethereum video with Gareth dropping the same day, but just final thoughts for the audience on the recession.
The biggest thing is that in recessions we find out that we don’t know everything right. So I think in bull markets, everyone thinks they’re a genius, right? Everyone makes money in bear markets. We realize that we have to learn, and so I preach to people to get educated because if you can learn one new thing about trading every day, you will be a different trader in a year. In 10 years, you’ll be making so much more money. Education is so important. Remember that and again, thank you for having me. It’s great to talk, and I hope we do it more often.
[This article is a transcription of a video made by Altcoin Daily]
[Original video: https://youtu.be/qvmhbrASoYU]
