Is Bitcoin Still In The Accumulation Phase? — Transcript

Full transcript

1. 0:00Hey guys, what's going on? It's Rex
2. 0:01Capital. Welcome back to the Rex Capital
3. 0:02channel. Let's dive into today's update
4. 0:05on whether Bitcoin is in a macro
5. 0:07accumulation range or it's actually
6. 0:09going to be transitioning into macro
7. 0:11reaccumulation before further upside.
8. 0:14Subscribe to the channel for more videos
9. 0:15like this in the future. Like this video
10. 0:16if you enjoy content like this going
11. 0:18forward and let's dive into it. But
12. 0:20before we dive in, I do just want to
13. 0:21mention that I've been away from YouTube
14. 0:23for quite a while because I lost my
15. 0:26voice. I lost my voice in the summer
16. 0:28period and that's when we saw quite a
17. 0:30lot of volatility take place as well. So
18. 0:33I lost my voice for 3 weeks, couldn't
19. 0:35make videos and the way I went about it
20. 0:39in the newsletters was that I can still
21. 0:41write. So I still was active on Twitter.
22. 0:43I was still active in the newsletters
23. 0:46writing
24. 0:47as as much as I could to compensate for
25. 0:50my voice loss.
26. 0:52But that being said, it took a while to
27. 0:54recover.
28. 0:56But now that I'm back, I'm more than
29. 0:58happy to be making these videos a lot
30. 1:01more frequently. So I'm very glad to be
31. 1:03able to speak and share this video with
32. 1:05you today. So let's dive into Bitcoin's
33. 1:08price action at long last. This is 2023
34. 1:11here and we've seen quite a lot of
35. 1:14analysis online about comparing 2023
36. 1:18with this current cycle here. And I
37. 1:20think it's quite important to talk about
38. 1:22the analogous levels
39. 1:24to that prior cycle with this cycle
40. 1:26because there have been many different
41. 1:27interpretations and the way I always go
42. 1:30about things is to be faithful to the
43. 1:33technicals, to look at the recurring
44. 1:35price tendencies, to look at the
45. 1:37recurring reactions from key levels. And
46. 1:40if we focus on each of these portions of
47. 1:44price action, we can truly delineate and
48. 1:47come up with what those particular
49. 1:49phases represent and what do they
50. 1:52correspond to. So if we look at this
51. 1:54current price action here, this looks
52. 1:56like a ascending triangle and it has
53. 1:59occurred
54. 2:01below this key level here. So, this is a
55. 2:03bit of a deviation,
56. 2:05but a bullish market structure
57. 2:07nonetheless. Premium buying behavior at
58. 2:10the lows, representing a new technical
59. 2:12uptrend which we break out from.
60. 2:15And it's the same sort of pattern here.
61. 2:17Ascending triangle at the lows,
62. 2:19deviating below this level, premium
63. 2:22buying behavior in graphical graphic
64. 2:25form here before we break out quite
65. 2:27strongly. And so, these breakouts are
66. 2:30very similar in in this regard here to
67. 2:34the point where if we focus on these two
68. 2:36bars, this this price action, we then
69. 2:39cluster for a little while. And we
70. 2:42cluster for a little while here as well.
71. 2:44And in this cycle 2023, we broke out to
72. 2:47new highs. We we broke out from this
73. 2:50resistance region. And this resistance
74. 2:52region
75. 2:54was roughly 24K at the time and we
76. 2:56rejected from this region here, rejected
77. 2:59from here as well, and then broke beyond
78. 3:02here to then develop a reaccumulation
79. 3:05range at top this overall macro range.
80. 3:09And so, if we're going along with that
81. 3:12same logic here, this cluster developing
82. 3:15beneath this resistance, then indeed
83. 3:18we're seeing a lot of the same
84. 3:20similarities,
85. 3:22but rather than break out powerfully and
86. 3:25maintain a range above the top of that
87. 3:29old macro range, because at the end of
88. 3:31the day, this is a macro range of macro
89. 3:33accumulation, and so is this, really.
90. 3:37Instead of breaking out powerfully,
91. 3:39transitioning into a trendless
92. 3:42environment, because that's what
93. 3:43consolidation is, it's non-trending
94. 3:44price action within a very specified
95. 3:47environment, we haven't really seen that
96. 3:51environment develop on top of this level
97. 3:54of 82 and 1/2. We haven't seen a
98. 3:56reaccumulation range develop at top this
99. 3:59region. And that's where it should
100. 4:01roughly be developing if we're going to
101. 4:03be continuing to follow prior cycles
102. 4:06because the macro accumulation portion
103. 4:08[clears throat]
104. 4:09and the re-accumulation portion, those
105. 4:12represent two distinct phases and to
106. 4:15transition into well, to transition out
107. 4:19of one phase of macro accumulation and
108. 4:21transition into the next phase of
109. 4:23re-accumulation, we simply need to turn
110. 4:26the key level of prior resistance into
111. 4:29new support
112. 4:31before we can rally higher and
113. 4:33transition into this environment here.
114. 4:35So, what's interesting is that here we'd
115. 4:38reject and and drop to new lows and then
116. 4:40the next time we'd reject from this
117. 4:43range high, we'd drop a lot less which
118. 4:46is the very definition of shallower
119. 4:48pullbacks each time we tag this
120. 4:51resistance. And that's typically what
121. 4:54happens when we see a point of rejection
122. 4:57weaken over time. And when we break
123. 4:59beyond that region, we then actually
124. 5:02turn that level into almost a new
125. 5:04support and that's the psychological
126. 5:06story where sellers are strong, then
127. 5:09they weaken to the point where sellers
128. 5:12become buyers at very similar levels
129. 5:16compared to months prior. And that
130. 5:19psychology isn't quite evident yet. Yes,
131. 5:22we've seen a strong rejection into new
132. 5:24bear market lows. Yes, we've seen a much
133. 5:27shallower pullback.
134. 5:29But, we're now in this moment in time
135. 5:34turning this level potentially into a
136. 5:36new resistance. And so, because of the
137. 5:38fact that we haven't been able to turn
138. 5:40this level into a new support and then
139. 5:41transition into the re-accumulation
140. 5:43range,
141. 5:43turning this back into a new resistance
142. 5:46potentially means that we're still in
143. 5:48this phase here. And if we're talking
144. 5:50about this phase, then it's worth
145. 5:52denoting that maybe this is a left
146. 5:55shoulder, head, right shoulder and the
147. 5:58same thing taking place here. Maybe
148. 6:00we're still in the right shoulder
149. 6:02development. But, if we look at this
150. 6:05bottom of that right shoulder here, we
151. 6:07still deviated below it quite
152. 6:09substantially. And here, we haven't
153. 6:12really deviated too much. There was a
154. 6:13bit of a deviation, but testing this
155. 6:16level potentially, that could give us a
156. 6:18bit more of a right shoulder
157. 6:20development. Overall, of course, if we
158. 6:23turn 82 and 1/2 into a new support, then
159. 6:27we're effectively going to be
160. 6:28transitioning into that reaccumulation
161. 6:30range, and we could spend quite a of
162. 6:32time
163. 6:34in that environment.
164. 6:35It's just that we haven't transitioned
165. 6:37into that environment, and many people
166. 6:39are already saying that maybe this is
167. 6:41already the reaccumulation range. It's
168. 6:42just that we can't really see a
169. 6:44reaccumulation range within a macro
170. 6:48accumulation range. And so, we're in
171. 6:50between worlds at the moment. We're not
172. 6:52really reaccumulating, we're more
173. 6:56accumulating rather than reaccumulating,
174. 6:58because we need to break out from this
175. 7:01range to exit accumulation, and then
176. 7:03rally into reaccumulation. And at the
177. 7:06moment, we can't quite build the
178. 7:09necessary buy side momentum to
179. 7:11transition us into that next phase in
180. 7:14the cycle.
181. 7:16So, this has been a chart that I've been
182. 7:18sharing for quite a while.
183. 7:21And it does showcase some of the key
184. 7:24technical milestones. We've spoken a lot
185. 7:26about these milestones already, that we
186. 7:29need to turn 82 and 1/2 into a new
187. 7:32support, because that prior resistance,
188. 7:35which then turns into support in the
189. 7:37reaccumulation period,
190. 7:39that hasn't materialized yet. We haven't
191. 7:43yet turned that old resistance into new
192. 7:46support. If anything, we broke that
193. 7:48resistance, tried to turn it into
194. 7:49support, and now we're treating it as
195. 7:51resistance potentially once again. And
196. 7:54so, it's interesting because at this
197. 7:56moment in time, it's not quite clear if
198. 7:59that resistance is going to flip into
199. 8:00support, or if it's going to actually
200. 8:03still
201. 8:04act as a resistance. But, in the future,
202. 8:07once we do break out, we might actually
203. 8:09revisit these very same levels in the
204. 8:11future to actually build out a base atop
205. 8:16this macro accumulation zone. So, that's
206. 8:18quite interesting where this isn't
207. 8:21really a confirmed trend just yet
208. 8:24because we could still be in right
209. 8:26shoulder development. Uh we're not in
210. 8:30reaccumulation development right right
211. 8:32now. We're more in the macro
212. 8:34accumulation range for as long as we
213. 8:36stay below 82 and 1/2.
214. 8:38But, when we do reclaim 82 and 1/2, then
215. 8:40then we can absolutely start developing
216. 8:42that reaccumulation range. And it would
217. 8:45probably take a bit of time to develop.
218. 8:48But, right now, that trend isn't quite
219. 8:50confirmed. But, in the moment where we
220. 8:52do break out from the accumulation
221. 8:54range, and then we drop into the top of
222. 8:57that accumulation range, which would be
223. 8:59effectively the bottom of the
224. 9:00reaccumulation range, then we would have
225. 9:03a confirmed trend because we would know
226. 9:05that the bottom of that reaccumulation
227. 9:06range would be a retest of the top of
228. 9:09that macro accumulation range, and this
229. 9:11would probably be the bottom.
230. 9:13So, it's interesting how right now this
231. 9:15price action could be closer to a local
232. 9:17top. And and indeed, it's been close to
233. 9:19a local top. Uh 87K is where we
234. 9:22rejected, and we're still probably in
235. 9:24this right shoulder phase right now. So,
236. 9:26we're closer to overextended maybe
237. 9:28conditions. But, when we do rally to 100
238. 9:32or 93 in in the future, whether that's
239. 9:34in a few months or or even in the
240. 9:36pre-halving year of 2027,
241. 9:39if we do pull back into the low 80s,
242. 9:41then that would probably be a floor. So,
243. 9:44right now, it's acting as a ceiling, and
244. 9:46in the future, it'll probably be a
245. 9:47floor. And it's interesting how the same
246. 9:50price can show distinct different roles.
247. 9:54It plays different roles even though the
248. 9:56price is the same. And so, if we're
249. 9:58still rejecting from this region, then
250. 10:01that is potentially a sign of overbuying
251. 10:04and that we do need to see above
252. 10:05breather, especially with the midterms
253. 10:08uh around the corner. And if like to see
254. 10:10midterms analysis from me, feel free to
255. 10:14drop a like or even just uh drop a
256. 10:16comment, and I'll be sure to to prepare
257. 10:18that video for you if if there's
258. 10:19interest at all. But, we are in between
259. 10:22worlds here. Is it still macro
260. 10:24accumulation? And I think we're still in
261. 10:27macro accumulation because as long as
262. 10:29we're uh below 82 and 1/2,
263. 10:31then we're still in the macro
264. 10:33accumulation range. And so, as a result,
265. 10:36maybe we get a right shoulder
266. 10:38development.
267. 10:39But, one of the last things I do want to
268. 10:41mention here
269. 10:42is that in the price cycle, we had this
270. 10:44expansive
271. 10:46deep left shoulder take place. And then
272. 10:49the right shoulder itself was much more
273. 10:52compressed. And we can ignore the
274. 10:55downside wick uh for just showcasing
275. 10:59that this is an outlier. We spend very
276. 11:01little time in and around this level.
277. 11:03Just showcasing that the candle body
278. 11:05cluster itself was a lot
279. 11:08shallower, a lot more clustered, a lot
280. 11:10more and less broad. It was definitely a
281. 11:13very different cluster, and it was a lot
282. 11:15more elevated. Even the downside wick
283. 11:18here was elevated compared to the lows
284. 11:21at this left shoulder. So, this was not
285. 11:23by no means a symmetrical
286. 11:25uh inverse head and shoulders. And so,
287. 11:27to get an asymmetrical
288. 11:30uh inverse head and shoulders where
289. 11:31price drops into the high 60s,
290. 11:34chances suggest that maybe we won't be
291. 11:38getting that symmetricality. Instead,
292. 11:40the probability is more focused on
293. 11:43potentially getting a right shoulder
294. 11:44that's a little bit more compressed,
295. 11:46isn't going to last as long as this left
296. 11:49shoulder, and probably will take place
297. 11:51somewhere in and around this region with
298. 11:54scope for if we do see some downside
299. 11:56volatility, that black macro downtrend
300. 11:58would be turned into a new support
301. 12:00potentially.
302. 12:01But, even the positioning of this price
303. 12:03action in this potential right shoulder,
304. 12:06this is already taking place above the
305. 12:08macro downtrend. And in the price cycle,
306. 12:11we were still beneath the macro
307. 12:13downtrend. So, it's interesting how in
308. 12:15this cycle we had a macro accumulation
309. 12:17range and we had a re-accumulation
310. 12:20range. And the re-accumulation range
311. 12:22took place beyond the macro downtrend
312. 12:26and the macro accumulation range took
313. 12:27place beneath that macro downtrend.
314. 12:30Whereas in this cycle, the macro
315. 12:32accumulation range is actually taking
316. 12:34place partly beneath the macro downtrend
317. 12:37and partly above it. And the
318. 12:39re-accumulation range is going to take
319. 12:42place beyond the macro downtrend. It's
320. 12:44just that it hasn't fully developed yet.
321. 12:47And so, that's why if we're still below
322. 12:5082 and 1/2, then we can go into that
323. 12:52right shoulder. And whether we get a
324. 12:55elevated right shoulder, whether we get
325. 12:58the symmetrical right shoulder, which is
326. 13:00probably a little bit less likely. And
327. 13:02at the end of the day, we're just
328. 13:04working with probabilities here. And
329. 13:06working with probabilities is simply the
330. 13:10the best that we can do. We can only
331. 13:12look at historical cycles and make uh
332. 13:15decisions and come up with ideas based
333. 13:18on the historical price action and work
334. 13:21off the probabilities there. But
335. 13:23sometimes we don't always get it right.
336. 13:26But even looking, for example, at the
337. 13:284-year cycles
338. 13:30where we saw a bottom take place earlier
339. 13:33than we've historically seen that to be
340. 13:35the case.
341. 13:36In many
342. 13:38alternative realities, I would have
343. 13:40still followed the 4-year cycle. And I'm
344. 13:43not really sure
345. 13:45if I if there's an alternative reality
346. 13:48where I would have been contrarian and
347. 13:50thought to myself, "Actually, we're
348. 13:52going to probably desynchronize from the
349. 13:544-year cycle and we're going to bottom a
350. 13:56lot sooner." I think nine times out of
351. 13:5910, I'd still follow the 4-year cycle in
352. 14:02terms of, you know, waiting a year
353. 14:04before we actually bottom.
354. 14:07And maybe one out of 10, in one out of
355. 14:09the 10 alternative realities, maybe I'd
356. 14:12be tempted to be contrarian. But I'm not
357. 14:14quite I'm not quite sure if I'd go
358. 14:16against the data in that way. I I'm
359. 14:18someone who really pays attention to the
360. 14:21data. I look at the probability. I look
361. 14:23at the historical tendencies, and if
362. 14:26they're occurring, and more often than
363. 14:27not, that would really help me in in my
364. 14:30investing uh
365. 14:31career because generally I've been 10
366. 14:34years here in the space, and that's more
367. 14:36often than not really helped me do quite
368. 14:38well. And so, going against historically
369. 14:41recurring tendencies, that's an instinct
370. 14:44I simply don't have. But in this case,
371. 14:47in this bear cycle, the instinct I
372. 14:50usually have, of course, it didn't play
373. 14:52out in that way. But having said that,
374. 14:55we have to respond to the price action
375. 14:58that we see in front of us, and it's
376. 15:00interesting how even though we've seen a
377. 15:03shallower bear cycle,
378. 15:05we've seen a shorter bear cycle, we're
379. 15:08still developing very similar market
380. 15:10structure to what we've seen in the
381. 15:12prior bear cycle before it transitioned
382. 15:15to the pre-halving reaccumulation. And
383. 15:18I've spoken a lot about cycle
384. 15:20acceleration. Maybe that's a story for
385. 15:22another day, another video, if you'd be
386. 15:25interested to to hear about my views on
387. 15:28potential cycle acceleration, feel free
388. 15:30to drop a comment as well. And just let
389. 15:32me know what you'd like to see in the
390. 15:33next video. But generally,
391. 15:36potential cycle acceleration is taking
392. 15:40place. But because of this cycle
393. 15:42acceleration, that's going to have some
394. 15:44implications on the next phases of the
395. 15:46market cycles. But if we've potentially
396. 15:50accelerated in a quicker bottom, if
397. 15:53we've broken the macro downtrend sooner
398. 15:56than we've seen in the past, in the past
399. 15:58we'd usually break it in Q2 or Q1 of the
400. 16:01pre-halving year. If we're seeing all of
401. 16:03this acceleration, at some point
402. 16:04acceleration needs to slow down, and
403. 16:08we've seen that when we rallied to new
404. 16:10all-time highs in the pre-halving
405. 16:11period,
406. 16:12we saw that acceleration dissipate over
407. 16:16a period of eight months, and we covered
408. 16:18this online, we covered this on Twitter.
409. 16:21And uh we covered it uh quite frequently
410. 16:24and and ultimately quite well because in
411. 16:26the end we topped out as per historical
412. 16:29halving cycles in line with the
413. 16:31four-year cycle. So, one of the
414. 16:32questions is do we get a right shoulder
415. 16:35here? And the next question is how long
416. 16:38will this take? Because the longer this
417. 16:40takes the more that acceleration will be
418. 16:44decelerated will be reducing that
419. 16:47acceleration. And if we think about the
420. 16:49bear market bottom phase right over here
421. 16:52and then we think about the macro
422. 16:55accumulation
423. 16:56uh range breakout and macro downtrend
424. 16:59break, we then transition into
425. 17:01reaccumulation. And so we've probably
426. 17:04seen the bear market bottom. I mean
427. 17:05there's a low probability of maybe
428. 17:07dropping into new lower lows, but as
429. 17:09time goes on that becomes less and less
430. 17:12of a likelihood. That's just uh
431. 17:14probabilistically speaking and breaking
432. 17:16this macro downtrend, that also reduces
433. 17:19those chances because breaking the
434. 17:20downtrend means that we've entered into
435. 17:22a new macro uptrend which means that we
436. 17:24probably won't be dropping into a new
437. 17:26bear market low. And so those technical
438. 17:30milestones that have been achieved are
439. 17:32reducing the possibility of those new
440. 17:34lower lows, but by breaking this macro
441. 17:38downtrend and by bear market bottoming
442. 17:41sooner, breaking the downtrend sooner
443. 17:43when we transition into the
444. 17:45reaccumulation phase, that will be the
445. 17:46next phase that price will need to
446. 17:50reach. It's the next structure that
447. 17:52price will need to inhabit. And when
448. 17:55that happens exactly will give us a lot
449. 17:58of ideas when it comes to how quickly
450. 18:01we're moving along in this cycle.
451. 18:04Because if it takes a long time to build
452. 18:06out that reaccumulation range, then
453. 18:08we're probably seeing deceleration in
454. 18:09this cycle already.
455. 18:11And that's the way it is with cycles. We
456. 18:13rally from fear to greed. We rally from
457. 18:17overperformance to underperformance,
458. 18:20overperformance to underperformance,
459. 18:22overperformance to under performance,
460. 18:23and we keep doing that. Rallying into
461. 18:26over performance, mean reverting into
462. 18:28under performance before mean reverting
463. 18:30again into over performance. And so,
464. 18:32we're going to be seeing that play out
465. 18:35over the course of this new market
466. 18:37cycle. And so, if this is a period of
467. 18:40under performance after a fantastic
468. 18:43move of upside in recent months, then
469. 18:45this under performance will help price
470. 18:49slow down in its cycle, maybe
471. 18:51resynchronize a little bit better with
472. 18:53the four-year cycles. I know that nobody
473. 18:54wants to think about or talk about
474. 18:57four-year cycles, but I think one of the
475. 18:59longer-standing principles for Bitcoin
476. 19:01market cycles, it's certainly evolving,
477. 19:03but I don't think we should just throw
478. 19:05it out the window. We must still
479. 19:07critically assess it and critically talk
480. 19:10about it. So, if we're going to be
481. 19:12seeing under performance now, maybe that
482. 19:14slows down the cycle, and it helps
483. 19:16things resynchronize at least a little
484. 19:18bit with traditional halving cycles and
485. 19:20four-year cycles, but that's maybe a
486. 19:23story for another day. If you enjoyed
487. 19:24this video, feel free to subscribe. Feel
488. 19:27free to like this video. If you'd like
489. 19:28to see more videos like this in the
490. 19:29future, happy to be back and happy to
491. 19:31have you here as well watching this
492. 19:33video. Thanks so much for that. And
493. 19:35having said that, I'll speak to you in
494. 19:37the next one. Speak to you soon.