Was today the start of a new Bitcoin Bull Market?

Was today the start of the new Bitcoin bull market? Probably not. But we don't know. Nobody knows. And I'll walk you through all the right way to think about all of this. Uh first of all, why do assets go through bull and bare markets? Bull markets meaning they're going up. Bare markets meaning they're going down. Remember, you can remember that because bulls attack by tossing their horns up and bears attack by slashing their claws down. It's a universal term that's used for markets, bullish and bearish. So, Bitcoin went from something like $63,000 today up to 70,000 in a day and then came back down to 68,500 when I started recording. So, uh this is common in a bare market, meaning a down market where there are rallies. And so one of those rallies will eventually be the rally that gets us out of the bare market and really kicks off in earnest the last bull market or sorry the new bull market. Now technically the bull market will start at the very low. So there's a chance that we are in a bull market and the low was $60,000. James Czech, my favorite Bitcoin analyst, still says there is a 60% chance. That $60,000 was the low, meaning we already had the low, meaning we are already in a bull market. But obviously, that means there's a 40% chance that we dip just below $60,000 at some point in the future and sort of reset the clock for where the bottom is, but nobody knows. Okay. So, uh, why do markets do this? And it's not unique to Bitcoin. all markets which includes gold and silver and copper and corn corn and soybeans and rice and wheat as well as major stocks like Amazon, Apple, Microsoft, Google, Nvidia, uh Facebook, uh all of those they all behave the same way. They go through bull and bare markets. So why is that? Well, James Czech would be the first to say uh things go through bare markets because immediately prior to the bare market, too many people bought too many things at too high a price. So, in the case of Bitcoin, too many people bought too many coins at too high a price and they did not have the ability to keep those down. So, when they got on the natural roller coaster of the market, they ended up vomiting those coins or those shares into the marketplace. uh this works the same whether it's Bitcoin or shares of stock or anything like that. So what this looks like in the real world is something is going up, everybody gets excited that it's going up. Everybody assumes it will keep going up and so people start using more and more money uh to buy into the thing while it is going up and it turns out that they are using money that they can't really afford. So uh sort of a gross analogy here but let's assume you eat breakfast. You eat a nice healthy breakfast. You ride a roller coaster, you know, the Veloca Coaster at Universal Studios. You're fine. Everybody's fine. You're You keep your food down. Everybody's good. But some of the people that are eating the amazing breakfast are not eating healthy. Some of them are eating bacon. Some of them are eating omelets that are practically swimming in grease or oil. And some of them are eating just way too much. Well, the question is, who's going to throw up on a roller coaster? Well, a high percentage of those people are going to be people who ate too much food too fast with too much grease right before they rolled the roller coaster. So, the reason for bare markets, too many people gobbled up too much of whatever it is with too much money they didn't have too close to proximity to where the price uh tipped. And because prices are always going up and down uh over time, when that happens, too many people gobble up too much stuff too fast, eventually the standard uh up and down of the marketplace catches them on the wrong side and somebody throws up their food. Well, somebody throws up their food and the price dips a little farther, which causes someone else to throw up their food. And the more people that throw up their food, the more people that throw up their food because when people are throwing up their food, it makes other people gag and throw up their food. So, same thing happens in stock markets. somebody uh can't keep their their uh you know can't keep their investment down and so they panic sell it. Well, they panic sell it and somebody else panic sells it and then that triggers somebody's stop loss who then panic sells it and then that triggers somebody else's uh cascading liquidation on a Bitcoin back loan. So then they're selling and then that triggers someone else's uh you know liquidation level on a 40 to1 uh you know leveraged bet on Bitcoin on BitMX or Binance or something like that and then that triggers it's just a cascade. So those cascades happen because too many people gobbled up too much of whatever it is at too high a price and couldn't keep it down. And again, this happens with all assets. And so you get this cascading liquidation effect where somebody, you know, throws up their their stuff and then it, you know, cascades down. Now, the they always end if the underlying asset is solid, which Bitcoin is, and so is, you know, the major stocks and the stock market and all of that. uh these cascades always come to an end because eventually the number of people that ate too much food too fast with too much grease right before right before they got on the roller coaster, those people eventually run out. You always eventually run out of those people. And when you run out of those people, then there's nobody to cause the next cascade of the price to go down. And when the last person does that and uh panic sells their stock or their bond or their commodity or their exchange traded fund or their Bitcoin, when the very last person is done doing that, then the market goes up and there's nobody else to drag it back down. So, um that is why markets do that sort of stuff. Too many people buy too much of the thing at too high a price uh too fast and too close to the top and then they get on the wrong side of a small price change. It creates a cascade. It goes down again. This isn't common to all markets. So, uh, the good news, of course, is that there's always a bottom because not everybody who owned the asset bought too much of it too fast with money they couldn't afford, too close to the top with weak hands, uh, you know, uh, you know, a weak, you know, inability to hold it with too much leverage, etc., etc. So there's always there's always some number of people that have to get washed out of the market but that always is you know a relatively small percent of the total people that hold the asset. Uh but again every asset goes through bull markets and bare markets for this reason as well is because the underlying elements of whatever it is are changing. So in the case of Bitcoin, Bitcoin's in the strongest position it's ever been. Um but in the ups and downs, you know, it's just in a bare market for no good reason. Other times stocks are in bare markets for very good reasons. Uh sometimes they're, you know, they're having management upheaval. You know, sometimes they're badly run. Sometimes they're losing money. Sometimes, you know, regulations or laws change and they're going out of business or they end up on the wrong side of some major technological change. Those things do not apply to Bitcoin, but they do apply to other things. But if something is in a bare or a bull market really independent of the asset itself, which is what's happening with Bitcoin, again, it happens because too many people buy too much of the thing too fast, you know, with money they can't afford and they just can't keep it down and eventually they vomit whatever it is back onto the marketplace, which pushes the price down. But again, it always ends and it's always just a matter of time. So, how do we know when we're done pushing through whoever it is that's not going to be able to keep their breakfast down on the roller coaster of Bitcoin and uh finally going to be able to go up without those people, you know, upchucking their Bitcoin onto the marketplace? And the answer is there's no way to predict it, but typically it's preceded by some some time pain. So, what is time pain? time pain is when the price is grinding sideways and the rallies are met by people who could barely keep their Bitcoin down and are selling it because they're afraid this is the last time it's going to rally. So let's assume somebody bought Bitcoin at 80,000, 90,000, 100, 110, 120, whatever the price was and then the price they see it go all the way down to 60. Well, they have just enough courage to hold it all the way through 60. But as soon like today, earlier today when the price passed $70,000 for a brief minute, um they see $70,000 and they're like, "Okay, maybe I bought it at 80 or 90 or 100, but I can get 70 out and basically I want to get off the roller coaster." So they know they're going to take a loss, but they're so tired of the roller coaster. They're so close, you know, to losing their breakfast on the roller coaster that they want to get off at a loss. So that's why you get the rallies sometimes don't stick is because it rallies up from, you know, 63,000 to 70. And there's a bunch of people who are like, "Oo, the roller coaster is going up. I can get off the roller coaster for less of a loss than I was in before when it was down at, you know, 65, 63, 68, whatever." And so they sell their Bitcoin at 70,000 because they just can't they can't handle it. Uh again, the reason the reason these rallies often have to get knocked back a few times is because there's too many of those people. They may have not uh you know uh you know lost their breakfast into the marketplace at the very bottom, but they panic sell when they want to get off the roller coaster because they just can't take it anymore. And so typically it takes a few tries of Bitcoin rallies up to 70,000, then it falls back, then it rallies to 70,000, then it falls back. And each time it's because people who can't handle the roller coaster are wanting to get off at a price that's higher than, you know, 63 or 65 or 68. So when they see a number that starts with a seven, they're like, "Oo, I'm getting off. I can't take this anymore. This is totally not for me." They don't understand what they own. They don't understand what they hold. And so they want to get off the roller coaster. So eventually, you always run out of those people. And again, Bitcoin's been through this. So, like anybody that's worried, it's like look, back in 2011, Bitcoin went up to $32 and crashed to $2. This is a 94% price correction. In 2013, Bitcoin went up to $1,200 and crashed to $92. That's a 93% price correction. In 207, Bitcoin went up to I guess it was 20 whatever. Yeah, 2017, Bitcoin went to $19,000, came back down to 3,200. That is a 70 uh whatever 84% price correction. Then Bitcoin in 2021 went up to $69,000, came back to 15,500. That is a 77.5% price correction. So that was all before the Bitcoin ETFs. A lot has changed. The market is much more uh robust, much more liquid and it's uh much more institutionally owned now. And institutions do not have the same panic cell behavior of retail investors. And as uh time has passed, ownership of Bitcoin has rotated more into institutional hands in a rather than individual hands because institutions are smart enough to be buying it. And institutions still have not figured out what Bitcoin is. Sorry, individuals for the most part have still not figured out what Bitcoin is and that they need to hold it for the long haul. And so more and more Bitcoin is is owned in the exchange traded funds uh owned by boomers rather than, you know, panic cell uh people. and those sort of people just tend to leave their stuff in their retirement accounts and not worry about it. And so, um, anyway, so the draw downs are a lot lower now than they used to be, which is why I think there's a good chance 60,000 was the bottom or if not, it was close and all of that. But again, it doesn't matter because at the end of the day, the people who cannot keep their breakfast down will all eventually get off the roller coaster. 100% of them will get off the roller coaster. A lot of them did get off the roller coaster in the price correction down to $60,000. That wiped a lot of the people who could not keep their breakfast down off the roller coaster. When that dropped to 60,000, a bunch of them pushed the button and said, "Get me out. I cannot take this anymore." And again, time pain. A bunch more have been sort of ground out of the market over the last 3 weeks as it's gone mostly sideways to slightly down. And as those people get out of the market, we don't have to worry about them anymore. Um, which again leaves uh the the the remaining people there are probably some so James Czech if somebody said is this you know the end of the market dip James Czech would say well probably not because it hasn't quite been long enough to grind out uh to you know in the in the process of markets which scare you out and wear you out. The scare you out part is mostly complete or hopefully all the way complete but the wear you out part probably isn't. It hasn't been long enough for Bitcoin to rally and then get knocked back down and then some people panic sell and then rally and get knocked back down and then some people panic sell. Once it's done that enough times, then the market can finally go up because these people that can't handle it have finally finished upchucking their Bitcoin and they're finally off the roller coaster and that clears the way to go much higher. Again, this is not unique to Bitcoin. All markets work this way. Anything that trades in a market that goes up and down, which is all markets, anything that trades in a market behaves this way. Uh the difference with Bitcoin is people just can watch it 24/7, uh 24 hours a day, 7 days a week. Uh the stock market, you can't watch 24/7 because it's not even open most of the time. Uh but with Bitcoin, it is. And so people watch it a lot. And for a lot of people, it's the first time they've ever experienced the market. They've never uh they don't have experience with the stock market. So they don't realize that things just go up and down all the time. And if you were watching Amazon or Apple or Microsoft all day long, you'd be say seeing the same behavior for a stock that you see today with Bitcoin. So what does that all mean? What that all means is maybe today's rally is the start of a big new bull market. Maybe everybody who can't keep their breakfast down is off the roller coaster. But probably not. It's probably going to take some time pain. It's probably going to take grinding sideways for people who think they can get they can keep their breakfast down to realize they don't even want to try anymore and get off the roller coaster. And that's what happens. You know, maybe you can take the Veloci Coaster at Universal Studios for, you know, two and a half minutes or however long it actually runs. But, you know, when people start realizing, hey, I'm going to be on this roller coaster for 30 minutes, suddenly they're like, uh, that's a lot of Yeah, that's a lot of ups and downs. Maybe I don't want to be on that long. But eventually they'll all get off, which is fine. Everybody who doesn't have the conviction and the courage to hold Bitcoin will get off the Bitcoin train. And that's fine. And the people left on the Bitcoin train will benefit by acquiring more Bitcoin at cheaper prices and more upside in the future, which is just how that works. So quite a few people have been reaching out to me saying, "Hey, prices seem pretty cheap. I'm considering putting a significant investment in Bitcoin." Or telling me that they actually have put a significant investment in Bitcoin. Good for them. A lot of Bitcoin is being picked up by high conviction long-term holders in the 60,000s. There's no bad time to buy Bitcoin. Bitcoin was a good price at 126 and it's an even better price at 60, but there's no bad price to buy Bitcoin. Obviously, the lower it is, the better. But since we don't know what low and high is in advance, we don't have a choice. So, same advice as always, buy as much Bitcoin as you can, hold on to it for as long as conceivably possible. Uh we are in the you know second half hopefully second quarter or sorry last quarter whatever you want to call it of this Bitcoin bare market. Most of the pain is behind us. What lies ahead if there's more pain is probably time pain and not price pain meaning it's just grinding in the 60,000s or a little above or a little below. That is much more likely than uh you know than major drops and things like that but it still wears a lot of people out. So, great time to buy Bitcoin. If you're considering buying Bitcoin, I consider it very much on sale right now. And if you have any questions, let me know. Otherwise, this Bitcoin will be bare market will end at some point if it has not already as soon as everybody who can't handle what they hold is off the roller coaster. Then we go much higher, which is the way it always works in every market where the underlying asset is solid. And in the case of Bitcoin, it's been rock solid for 17 years and counting. Have a great evening, everyone. X.