This Crypto Crash Will NOT End Here! [Here's Why]

TLDR;

This unscheduled stream from Crypto Banter covers a range of topics, including the market's reaction to recent comments from Pal, the potential impact of the ongoing government shutdown, and insights from institutions regarding the current state of the crypto cycle. The speaker expresses concerns about a potential market correction, drawing parallels to previous crashes and highlighting the disconnect between retail and institutional perspectives. He also touches on the parabolic movement of gold and its potential implications for Bitcoin. Additionally, he introduces a new layer 1 blockchain called Canton, designed for institutional use, and offers advice on navigating the market using prop trading accounts.

• Market reaction to Pal's comments and potential end of quantitative tightening.
• Concerns about a potential market correction and the disconnect between retail and institutional perspectives.
• Impact of the ongoing government shutdown and lack of economic data.
• Introduction of Canton, a new layer 1 blockchain for institutional use.
• Advice on using prop trading accounts to navigate market volatility.

Intro and Market Overview [0:03]

The speaker begins by explaining the reason for the unscheduled stream: recent comments from Pal suggesting a potential end to quantitative tightening. Bitcoin has seen a slight recovery, but the speaker expresses concern, believing the market correction may not be over. He outlines two reasons for his worry: historical patterns of post-crash recoveries and the current sentiment on Twitter, which he feels is not fearful enough to signal the end of the correction. The speaker intends to discuss Pal's comments, the government shutdown, and institutional perspectives on the market.

Market Reaction and Institutional Perspective [2:33]

The market has reacted positively to Pal's comments, with Bitcoin recovering to $113,000. A whale who previously opened a large short position has now closed it. However, the altcoin market is not looking as healthy. Institutions are primarily focused on Bitcoin and ETH, and they were largely unaffected by the recent leverage flash. They view the altcoin market as a casino due to the high leverage and low liquidity. The speaker questions the extent of the damage done by the recent events and suggests that the cycle is still intact, potentially leading to a prolonged cycle driven by institutions.

Potential Market Correction and Sentiment Analysis [8:37]

The speaker expresses concern that the current market sentiment does not reflect the end of a correction. He notes that fear and greed levels are almost back to neutral, and social media sentiment remains largely bullish. He warns that the market may follow a typical correction pattern: going down, pulling people back in, and then continuing to decline to sweep the lows. He suggests that Bitcoin could test the $109,000-$108,000 level and potentially go even lower, towards $105,000 or even close to $100,000. The speaker advises caution and suggests that the market will only be confirmed to be going up if it sets a higher high, invalidating the correction scenario.

Bull Market Scenarios and Technical Analysis [12:43]

The speaker outlines two potential scenarios: a prolonged cycle driven by institutions or the end of the bull market. He references Ben Khan's analysis, stating that as long as Bitcoin remains above the 50-week moving average (currently at $102,000) and doesn't close a weekly candle below it, the bull market is still intact. The speaker's base case is a sweep of the lows, followed by a continuation of the bull run. However, he acknowledges the possibility of breaking below the 50-week moving average, which would signal a potential bear market. He emphasises that institutions are not concerned about the recent market events and view them as a necessary cleansing of the "casino" environment.

Institutional Perspective on Crypto and Market Factors [15:51]

Institutions are not interested in the "crypto casino" driven by leveraged altcoin trading. They are focused on the tokenisation of real-world assets, stablecoin transactions, and the real applications of blockchain. They see the perpetuals exchanges as destructive and want them out of their countries. The speaker believes that the recent market events have not affected the institutions and that they are happy to see retail investors being shaken out. He also discusses the positive impact of Pal's recent dovish comments, potentially influenced by Trump, which suggest possible rate cuts.

Government Shutdown and Geopolitical Tensions [20:15]

The ongoing government shutdown is a growing concern due to the lack of economic data. The speaker compares it to flying a plane without instruments, warning that the market may eventually react negatively to the uncertainty. He also highlights the potential for market volatility in the next 25-30 days due to posturing and tactical negotiations between the US and China. He anticipates threats, cancelled meetings, and tariff announcements, which could scare the markets.

Market Strategy and Altcoin Analysis [26:16]

The speaker reiterates his base case scenario: a sweep of the lows followed by a pullback. He questions whether "max pain" is up or down, suggesting that the market may be positioned for another leg down. He expresses concern about the parabolic rise in the gold price, which could lead to a correction in Bitcoin as well. He reveals that he is not buying many altcoins, with the exception of Athena, Pump, Solana, and Hyperliquid. He is also interested in Zora but is waiting for a lower entry point. He notes that Bitcoin dominance is likely to increase, which is generally bad for altcoins in the short term.

New Layer 1 Blockchain: Canton [28:32]

The speaker introduces a new layer 1 blockchain called Canton, designed for institutional use. He has known the founders for a long time and considers them to be among the smartest people in the industry. Canton features a programming language called DAML and offers privacy-fit regulation for institutions. It has a structure similar to Ethereum, with interoperable side chains called cantons that institutions can use for their own needs. Investors include Goldman Sachs, IBM, and Binance. The token is currently trading OTC at around a $20-25 billion valuation.

Final Market Thoughts and Prop Trading [31:31]

The speaker reiterates that he is looking for either a significant run-up towards all-time highs or a sweep of the lows. He suggests that those worried about their portfolios should consider using prop trading accounts, such as BitFunded, to trade with demo money and potentially earn a share of the profits. He encourages viewers to sign up for a one-step challenge and trade with other people's money. He concludes by announcing that normal programming and streaming will resume tomorrow.