Dec 1, 2023

"The Crypto Trader" author Glen Goodman discusses his analysis and outlook for bitcoin (BTC) as the cryptocurrency rose about 10% for the month of November.

Video transcript

Everyone's talking about the excitement in the equity markets with stocks up in November. But you know, what else was up in November? Of course, Bitcoin, it rose 10% for the month. But where are we headed next? As the year winds down? Joining us now to discuss the crypto markets is the author of the crypto trader all around nice guy or a friend and your friend and a guy who lives up to his last name, Glenn Goodman. Welcome back, Glenn. It was a great introduction. Best ever. Thank you, you know, but, you know, I figured show your family later on, on youtube. Um So here we are. Uh you, you have, you have a chart highlighting a Bitcoin action. You did incredible amounts of technical analysis. You drew one line right across at 38,000 and lo and behold, that's where we are right now. What is this all about? Yeah, it took me well over a year to draw that line. So, you know, don't make too light of it. It's a lot of work went into that. Uh It's, you know, I like to keep my technical analysis very nice and simple. It's always served me well, that approach. And actually, you know, if you compare the uh idiotic influences on Twitter with tons of lines and loads of things going on with the uh the very rich traders who actually do well in the stock market and in the crypto market increasingly, uh they tend to keep their technical analysis pretty simple as well. And that's because clarity is very important when you're trading, you know, it helps you to, to really, you know, see the uh what is it, the wood for the trees, you can see the wood, not, not see the wood. So in this case, we've got this line here, which I've called the resistance line because it's a very significant line for one simple reason that as you can see if you draw it all the way back to, you know, March 2022. Uh You can see that that's pretty much where sort of officially the bear market began. Um I say officially, you know, there's no true definition of a bear market. Everybody differs in their definition. But my definition is simply, you know, when a chart breaks down to the degree that you can kind of see that it, you can kind of see it with your eyes, it's no longer a bull market, you can't make that argument anymore at that point. And so it becomes extremely psychologically important, that line. Um not just psychologically important, but also technically important because a lot of buying and selling goes on during that initial decline at the beginning of a bear market. Uh So you've got two effects here, you've got the technical effect of it being a place where many people bought and sold. So they're now looking at that level again, thinking is this a place I wanna buy slash sell right here and they're all fighting over it right now. Um But also psychologically, as I say, even if you weren't buying or selling at that line, people know that that was the point where the bear market began and it's something that they look back on. And so, you know, for that reason, you get a hell of a lot of fighting at this point, which is, you know, I, I drew the initial resistance line, I think about a year ago now and it still holds up for, for those reasons. I stayed up half the night last night, Laurence because, because, you know, I was waiting, this could be the moment when it really shoots through. So I was kind of waiting for that moment. Eventually I got bored and went to sleep and we got a little bit of a break out earlier on. But uh but the big one hasn't happened yet. Put it that way. Yeah, it's so that 38. And by the way, we, we want to just apologize to the folks, uh John Bollinger and the, the Tama Cloud uh drawers and everybody else on Twitter. Uh, I'm sure you didn't mean to hurt their feelings by the time. Have fun staying poor because the complicated stuff that they do there. Um, but nonetheless, um, you know, the, that $38,000 mark is that part of it is because I, I, you know, people like round numbers and I'm asking is this sort of that thing where it's like, it's not quite 40,000, it's not quite 35,000. It's a sort of in between part where they're not quite sure where is, is that what's going on there or is there some other significance to that 38,000 level? Uh that makes it, as you said, it was sort of like a miniature peak up there, uh, back a couple of years ago. But is, is it because it, it's just below 40,000 or is there something else involved here in trading? Round numbers are a thing? They are a proper thing if you read reminiscences of a stock operator by Jesse Livermore. Sort of one of, yeah, one of the all all time classic trading books, uh, that was written, you know, a hun, well, almost exactly 100 years ago. And, uh, you know, he talks about the round numbers in it, he talks about the, the, um, the sort of magnetic pull of, um, of the round number. I, I can't remember. It was specifically, it was something like a, a share going from uh going heading towards $2 and it was at about sort of 180. And then there's this magnetic pull as people sort of expect it to get to the $2 level. But obviously you've got other people who are fighting against that, who swing traders in particular, who would see the $2 as a perfect time to sell. So that's why you get these tremendous battles near round numbers And uh you know, we are near 40,000 and I expect that plays a part as well as the resistance line that I referred to Glenn. Are you gonna give me a prediction? Where, where could it head next? Let's say if you take a look at your technical analysis, where do you think it's headed next? I mean, look, it's predictions are silly. I use technical analysis for one for one reason and one reason only and that's to identify the points where the big fight is going on because when there's a big fight, uh the breakout, whether it goes up or whether it goes down is very often, you know, a real kind of a point where if you buy slash sale, depending on which way it's going, you can make a lot of money because things happen very quickly. Price moves very quickly. That's what technical analysis is for. Ultimately. Uh anybody who uses it to actually predict the future is just insane because I like, you know, you can you can work out where there's a higher probability of something happening. And for example, now we could say there's a higher probability of the price continuing to rise than it is to fall. And how do we know that we know that because trends have a tendency to persist. So the very fact that the price of Bitcoin has been rising for as long as it has fairly consistently now for many months, uh that in itself is a strong indication that the rise is more likely to continue than it is to reverse. That's just, that's just a sort of cast iron law of trading full stop. As I say, whether you're doing stocks, futures, um anything. So, you know, I'm not gonna stick my neck out and go, yeah, we're gonna be the, you know, it's gonna be 80,000 by this time next year. But what I will tell you, um is that I am slightly skeptical that this is the beginning of, you know, the big one, another big bull run um of the kind that we saw in 2020 20 beginning in 2020. And uh the one that was in 2017, 2016, 2017, I'm not convinced that it's the big one. It could be uh dare I say a repeat of 2019 where we had, you know, what was effectively a massive bear market rally. Um But the thing is, you know, you could, you could even call that a bull market back then because the price sort of quadrupled or more it is. If, if a price quadrupled in the stock market you wouldn't go. Oh, that's, that's a pretty good bear market rally. You'd call that a hell of a bull market, right? So, you know, it, it doesn't matter too much what you wanna call it. You can make money on it. That's the point. Stepping back though, you look at the price, you look at what's going on. We had the discussion earlier about liquidity issues uh with finance, you know, throwing water essentially on some of its leverage here. And now that uh CZ has legal troubles, uh FTX over the past couple of year and change going away. So this rally is happening unlike other rallies with what seems to be not as much leverage in the spot market, uh or excuse me, perpetual futures market, which essentially is, uh I mean, you know what that is, that's spot market. Uh And, and the CME future is being dominated, as we said by a handful of ETF S that are essentially playing into that market for regulatory reasons. This rally is happening and therefore not as much leverage there. Do you think that this is not as um I, is it a more substantial rally as volumes are not as, as big as they were before, so to speak? Or I I, in other words, is it a rally? You can trust does it happen? It's a good time as far as I'm concerned if leverage isn't that high yet because once leverage gets super high as we know, the market gets overheated, uh, people, you know, overstretch themselves and, uh, once the market reverses a little bit, a hell of a load of people are stopped out liquidated and that shoves the market far down and sometimes it can completely destroy a bull run altogether. So, what you wanna see is slow and steady, uh, for, uh, a bull market and that's what we've got so far. So, you know, if we get over that $38,000 mark, then you can start to think, you know, people will be able to legitimately argue this is now a bull market if we get past that point where the market was collapsing in, uh, 2021 with regards to that interview that you just did with pro shares there, I was, you know, you asked a great question, Lawrence. I was, I was desperately, uh, hoping he'd give a good answer about, uh, what's the makeup of the people who are actually buying, um, their Bitcoin futures ETF and, uh, unfortunately, he replied, and I quote a diverse group of folks with diverse time horizons, which, you know, I mean, I'm not blaming him if that's, if that's all the info they have, that's all the info they have. It's just a bit of a shame obviously because it would be nice to get a real insight into how much of it is institutional buying and how much of it is retail buying. But the fact is that, you know, the ETF S are starting to come in to their own more and they're making inroads into the, I suppose, what we could call the traditional, uh, crypto exchanges like Binance, the ones that have been around for a while now. And actually, if I look at the figures, um I can see, uh the trading volume figures. Uh Binance is still way ahead on the perpetual futures in terms of buying and selling. But, you know, there are lots of other exchanges now that are really catching up and that, you know, this time last year Binance was out there on its own way ahead of all other exchanges. Now, you've got coin tr pro big Turkish exchange, Digi Forex, OKX BBI loads of them are all with approximately half the daily perpetual futures volume as Binance has. So if you add all those up, they actually um are way ahead of Binance. You know, literally, if you, if you put those sort of four or five exchanges together, and that's a situation we haven't seen for a few years.

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