TLDR;
In this conversation, Marc Friedrich interviews Josh, head of trading at Canary Capital, about Bitcoin, crypto, macroeconomics, and trading strategies. Josh shares his background, current activities, and insights on market cycles, technical analysis, and various asset classes. They discuss potential investment opportunities, risk management, and the importance of adapting to market conditions.
- Josh started content creation in 2016 due to a lack of crypto discussion and is now Head of Trading at Canary Capital.
- They discuss the potential for another Bitcoin all-time high this year, Ethereum's prospects, and the influence of macro factors.
- Technical analysis, particularly using Ichimoku Cloud, is central to Josh's trading strategy.
Introduction [0:00]
Marc Friedrich introduces Josh, a long-time follower since 2016 or 2017, and acknowledges his extensive content creation on Bitcoin and crypto. Josh is currently the head of trading at a firm in Philadelphia. Josh reflects on the rapid changes and growth in the digital asset space since 2016, noting the multiple market explosions and run-ups.
Josh's Background and Current Role [2:00]
Josh explains that he started creating content in 2016 because he felt there was a lack of discussion around crypto. He mentions he started without much knowledge or capital. Currently, he is the head of trading at Canary Capital, a digital asset manager with a hedge fund, private trusts, and pending ETF applications. He continues to create content as a trading journal, helping him analyze macro trends and their impact on crypto, despite his background in medicine and biology.
Rapid Fire Questions [4:38]
Josh reveals he first bought Bitcoin in 2013 after hearing about it on Reddit and being intrigued by the technology. His first altcoin was Litecoin, bought in 2014, but he no longer holds it. He considers Mog, a meme coin from the current cycle, the most ridiculous altcoin he has ever bought, which he quickly traded. He believes Bitcoin will reach another all-time high this year, but not in September due to negative seasonality. He still believes in the four-year cycle for the moment, expecting 2026 to be a year to be cautious. His cycle target for Ethereum is between 7 and 10,000 USD. He doesn't expect Ethereum to flip Bitcoin this cycle.
Macroeconomic Outlook and Market Cycles [12:37]
Josh notes that if Bitcoin can hold a daily close above 118,000 in September, bearish seasonality may be invalidated. He observes that gold looks technically strong, and if gold is rising, Bitcoin is unlikely to rise simultaneously. He suggests Ethereum and altcoins could potentially rally independently, drawing parallels to the NASDAQ, QQQ, and IWM, where smaller companies are gaining on the Mag 7. He acknowledges the rotation from less risky to riskier assets, a typical late-cycle phenomenon.
Technical Analysis: DAX, S&P 500 [19:01]
Josh examines the DAX, noting the risk of mean reversion. He observes similar patterns in the SMH, Q's, and S&P 500, suggesting a potential head and shoulders formation, a bearish reversal pattern. He identifies 43 as a key level for the DAX ETF, with a break below the July-August low signaling further downside. He assesses the S&P 500, highlighting the dramatic rate of change since April and the potential for a violent correction.
Technical Analysis: Russell 2000, Bonds [23:01]
Josh analyzes the Russell 2000 (IWM), noting an inverted head and shoulders breakout in June. He traded it briefly but exited in late July due to breaking a lower low on the fractals. He prefers trading the sector ETF rather than individual small-cap stocks. Regarding bonds, he finds long-term bonds (TLT) unattractive due to poor issuance and demand expectations, as well as negative technical indicators. In contrast, he bought some short-term US Treasury ETFs (SHY), which show consolidation, level holding, and higher highs.
Dollar Analysis and Ichimoku Cloud [27:48]
Josh discusses his approach to trading, emphasizing the importance of aligning ideas with technicals. He analyzes the US Dollar Index (DXY) using the Ichimoku Cloud, a system of dynamic support and resistance. He explains that good things happen above the cloud (bullish), and bad things happen below (bearish). The DXY currently shows mixed signals, indicating a transition or neutrality period rather than a clear trend.
Gold Analysis [32:01]
Josh identifies gold as the best-looking chart in the market, despite not being a gold bug. He notes that gold is above the Ichimoku Cloud with a bullish TK cross and an ascending triangle pattern, all indicating bullish momentum. He sets a target of 330-340 for GLD based on the depth of the pattern, but acknowledges the potential for further gains.
Gold Invalidation and Silver [34:51]
Josh states that the invalidation level for his gold trade is a daily close below 305. He emphasizes that triangles should ideally break before reaching the tip. He contrasts gold's position above the Ichimoku Cloud with Bitcoin's position closing in the cloud, which is a warning sign. He doesn't have a great read on silver, finding it too volatile and lacking a clear trend.
Gold Miners and Stock Examples [37:42]
Josh observes that gold miners (GDX) are going parabolic, noting a descending neckline inverted head and shoulders pattern. He suggests examining the individual components of ETFs for potentially better setups. He compares the GDX chart to Rivian, noting Rivian's potential for a breakout if small caps rally.
NEO and Tesla Analysis [39:58]
Josh discusses NEO, a Chinese electric vehicle company, which is finally breaking out of the Ichimoku Cloud after a downtrend since 2021. He doesn't currently have a position in NEO due to sector concentration with Rivian and Tesla. He likes Tesla from a technical standpoint, considering it the most bullish setup among the big-cap tech stocks in the US.
Chinese Stocks and Bitcoin Analysis [44:17]
Josh notes that Chinese stocks, such as KWEB, are attempting to break out after years of consolidation. He compares Chinese tech (CQQQ) to the NASDAQ, suggesting potential outperformance relative to the NASDAQ. He believes there is an opportunity in China for a short to midterm trade. Regarding Bitcoin, he thinks the cycle isn't over yet but is not optimistic for the short term.
Bitcoin Technical Analysis and Ethereum [46:56]
Josh analyzes Bitcoin's weekly and daily charts, noting that it is still in a clear uptrend on the weekly but is starting to droop into the Ichimoku Cloud on the daily, a warning sign. He mentions 118,000 as a key level for Bitcoin to regain bullish momentum in September. He believes a drawdown to 90K would make it difficult to reach new all-time highs this year.
MicroStrategy and Ethereum Analysis [51:30]
Josh observes that MicroStrategy (MSTR) looks horrible compared to Bitcoin. He believes that as long as Bitcoin stays above 108, there is still a chance for upward movement. Ethereum, in contrast, looks better than Bitcoin. He acknowledges that Ethereum looks like a chart he wouldn't buy right now, but if there is a larger correction, Ethereum still has a very bullish market structure, so it would actually be a very good buying opportunity.
Tom Lee's Company and Final Stock Setups [53:56]
Josh analyzes Tom Lee's company, BMNR, finding it below the Ichimoku Cloud on the 30-minute chart. He also notes that MSTR is underperforming Bitcoin on a relative basis. For final setups, he mentions uranium miners (URNM) as looking really good, with a potential massive inverted head and shoulders pattern. He also highlights Roku and Figs as promising charts.
Final Thoughts and Market Overview [1:01:39]
Josh emphasizes that there are many trading opportunities outside of Bitcoin, the SPY, or SMH. He mentions SMH as a chart to watch closely, as a breakdown could negatively impact the broader market. He stresses the importance of paying attention to clear levels and reassessing when those levels are breached.