Trading the Markets: Ep. 4 | Kris Bullock and Bijan Maleki

0:00Hi, everyone. I'm Raoul Pal, the CEO and co-founder of Real Vision. Here at Real Vision, we're committed to give you the best knowledge, tools, and network to help you succeed in your financial future. If you're enjoying this podcast, please take a moment to give it a five-star rating. It truly helps us continue to bring top-tier content. Thank you so much.

0:28happy wednesday everyone and welcome back to another episode of trading the markets i'm and i'm joined by rv crypto contributor chris bullock this is episode four guys and well the Markets are in the red again. It seems like it is a common theme lately, but it's got to turn around eventually, right, Chris? Someday, someday. Someday. So I know why we're all here. We're going to be talking some of our trade ideas or some trades we're just very interested in taking. And a reminder to everyone, if you have any questions that you want to ask us, just throw it into the chat, whether that is on YouTube or Twitter or in our comment section on our platform.

1:19Just put in your question and we'll try and take it live on air and help you get some insights. So with that being said, obviously, there's tons of market volatility, tons of things going on in the news that is driving all of this volatility. So with that, Chris, why don't we take a look and see how the benchmark, which is Bitcoin, how it's doing and what Bitcoin dominance is looking like today? Hi, Raoul here. Listen, I think we've got until 2030 before the economic singularity arrives. Now, it might not be the exact date, but it's around then. So we have about six years to figure out how to unfuck our future.

2:02I've put together a report to help you called Prepare for 2030. It's going to help you take the first steps in that journey to make sure you're secure past 2030. So just click on the link below and start your journey now. Yeah, so I did want to just kind of focus on Bitcoin dominance. I feel like since everything is either going down or just, you know, we're waiting for all of the tariff situation to resolve itself, which may or may not happen anytime soon. So I felt like it was more important to kind of dig into dominance right now, because I think a lot of us are wondering, what should we do with our money?

2:38Is it time to start allocating into alts? Is it time to, you know, what's Bitcoin dominance going to do and why? And so I've been staring at this Bitcoin dominance chart now for the last hour plus and have dug into it and have made quite a few interesting observations that I wanted to share about what I think is going on right now, kind of versus what has happened in previous cycles. And so just I'm going to do kind of a brief recap of what happened last cycle. Now, we know Bitcoin pretty much when the cycle bottomed at the end of 2018, you know, Bitcoin really jumped hard out of the gate. Like it rose up like a 5x, you know, in a very, very short span.

3:15And we can see that reflected here in dominance where it came into, you know, April, May, August, and then finally peaked out. and as we kind of came into the COVID crash right in this area, it flattened a little bit and alts kind of took the lead. And then this bit here is basically DeFi summer. So this is when Uniswap came online and Aave and all of those early DeFi tokens. And that ran really hard and that impacted Bitcoin dominance for quite a while. We can see Bitcoin dominance basically steadily went down after peaking initially at the end of 2019. Bitcoin dominance, I'm sorry, rather DeFi summer peaked right around the end of September of 2020 that year.

4:00And I don't know if you were around back then, but if you were, you remember a kind of Bitcoin went on a really strong rally into the end of 2020 and just kind of melted everybody's face for a minute. And everybody thought that it was all over from there. And then right when it peaked is right when, you know, ETH took off. And so what was going on here is we have to remember COVID happened back here. Suddenly we had all the stimulus money coming in. Everybody was getting their stimulus checks. That first went into Bitcoin, likely. All that money went into Bitcoin initially and then started going further out the risk curve, which is what we see, the sharp, drastic drop in Bitcoin dominance.

4:39And this is when NFTs came online. This is further advancement of DeFi summer. All of these new DeFi tokens were coming online. ETH was raging. This is when ETH was basically just at peak. You know, ETH fees were as high as they could possibly be. ETH was maxed out because everybody was trading NFTs. There was like 100 new NFT collections coming online every day all through this time right here. And lots of DeFi going on, all of which was occurring basically on ETH. Like Solana was barely anything at this time. So this is as much a reflection of ETH dominance as it is sort of a lack of Bitcoin dominance through this run right here.

5:20And then once the market peaked, ETH, I'm sorry, Bitcoin dominance stayed relatively low. Because if we remember, you know, NFTs actually remained relevant, you know, well into 2022, even after the market had peaked. And so that sort of gave ETH some strength. But if we remember, too, right around early this time, sort of late 2021, early 2022, this is when Layer 2s first started to come online. This is when, you know, Optimism and Arbitrum and things like that were first starting to, you know, come online. They weren't gaining any momentum necessarily yet. And through this time, also, we're starting to see changes in the ETH growth plan, basically.

6:01And then that sort of culminated with ETH switching to proof of stake right around September of 2022. And that was kind of the final straw for ETH dominance. And so it was about this time that ETH peaked. And, you know, Bitcoin dominance pretty much has been up only since then. So this Bitcoin dominance that we're experiencing now, yes, it's Bitcoin being dominant because we know that there's no more retail at this point. There's no more stimulus money coming in. Liquidity has dropped all the way back down. ETFs have come online. And so we're starting to see a lot more sort of trad fi money coming in, institutional money coming into Bitcoin, coupled with the complete sort of not death of ETH from a network standpoint, but certainly from a price standpoint.

6:53Like briefly, if we kind of click over and look at ETH Bitcoin pair, we can see this is basically this is what ETH has done against Bitcoin. So when you go back and look at this dominance chart, you're seeing essentially this because we have to remember Bitcoin dominance is largely reflected in what ETH is doing because ETH is the number two asset. So if ETH is going down, that's going to have an outsized impact on Bitcoin dominance going up. And so it's important to know that this doesn't necessarily reflect the broader altcoin market. You know, like we could have a lot of alts doing extremely well right now.

7:30So like Solana could go up 30 percent, but if ETH goes down 5 percent in that same standpoint or that same time frame, Bitcoin dominance is going to keep going up because it's not going to Solana is not big enough to reflect that change in dominance, you know, to out to overcome the the outsized influence that ETH has in this in this calculation right here. So I think it's important to kind of look at like we can see real quick kind of going back in the last cycle, Bitcoin dominance peaked 107 days after 107 weeks rather after the cycle low occurred. Now we're already 126 weeks past the cycle low and I'm sorry, Bitcoin dominance is continuing to run up, but it's not at the highest level that it ever was.

8:14It peaked out a couple of times at around the 70 percent mark before finally reversing. So are we going to see it come up to 70 percent before finally reversing or is it going to be something like this? If we go back and if we look at total three instead of just straight Bitcoin dominance, total three actually takes Ethereum out of the equation because it's basically the total crypto market cap minus the top three. So if we look here, ETH is no longer in this equation. And we can see kind of for the first time in this four year cycle, the 20 week moving average has rolled over. It hasn't, you know, like going back and looking here, it's continuing to set higher highs, basically.

8:59I'm sorry, Bitcoin dominance. I keep saying ETH. Bitcoin dominance is setting higher highs. But if we look at total three, like Bitcoin divided by total three, we can see that the 20-week moving average is actually rolling over for the first time. And it's technically outside of this one wick here. It's setting a lower high. so maybe we need to kind of remove ethereum from this equation and maybe this is a sign that outside of ethereum we are starting to see other altcoins uh you know starting to take back over and we are starting to see sort of this eth dominance wane a little bit so i'm going to be watching this closely to see if this continues this trend this rollover trend or if it does start setting higher highs again and we still got to wait until bitcoin dominance actually does come back up to around the 70 % mark before some kind of sharp reversal like this.

9:48Maybe we get the sharp reversal if and when the Fed pivots and we start getting QE and liquidity injections and things like that. Maybe, maybe not. I don't know. But I'm coming back and I think this is the more relevant thing to pay attention to in terms of the dominance right now is this BTC divided by total threes. So it'll be interesting to see how this plays out and to see if this continues to rollover. And this is what I'm going to be watching in the coming days and weeks to see, because we are starting to see some alts establishing bottoming patterns, which we'll get into here in a minute.

10:21And, you know, some alts certainly showing strength. So I'm curious to see if we remove ETH from this equation, what that ultimately is going to look like. So back to you, Bijan. Awesome. Well, we got the there. There it is for Bitcoin dominance. We'll see how it ends up turning out. But with that being said, Chris, what trades are we looking at? What are we taking? We need to know. What do you have on your radar this week? So, yeah, in light of the market continuing to be, I don't want to say garbage. I mean, it's garbage, but it's wildly unpredictable is the larger issue. And so I touched on PAXG last week or the week before, maybe.

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12:08And for a minute, I was a little wary because gold looked rather toppy. But the fact remains, the market is very uncertain still. And I think as long as that uncertainty remains, as long as we don't know what the ultimate endgame strategy is with these tariffs, whether it's a negotiating tactic or whether it's actually a full-on paradigm shift in the global economy, which we still don't know. One day it's one, the next day it's the other. So until that is kind of, until there's clarity there, I think that all roads lead back to gold. No matter how overbought gold is, no matter how overextended gold may look, I think all roads lead back to gold until then.

12:48And we look, one of the things I wanted to look was the RSI because it was overextended. We did have RSIs in overbought territory and we had a nice little flush out here where it basically went back down and mean reverted and then kind of came back all the way back down to the bottom of the Bollinger Bands and has since reversed. So that was a nice sort of reset on the RSI, which gives it time to run back up again. And I just, I think again, the strength remains in gold. And the nice thing about it is even if, even if you're I'm wrong or rather even if the pivot comes like say tomorrow we get a tweet from Trump and you know tariffs are off this is a hypothetically tariffs are off and everything is back to what it was or whatever game on in other words gold isn't going to just like tank overnight it's not going to drop 30 percent like like a stock or like Bitcoin or whatever so even if we kind of miss the initial pivot you know gold only maybe is going to move five percent you know, at most on any given day, really.

13:50And even 5 % is a lot for gold. And so it kind of, you get a little bit of a buffer there where you have a chance to pivot out of PAX and into whatever crypto holdings you were gonna. And it's like, maybe sure, you'll miss a couple of percent, but it's a whole lot better missing just a couple of percent than potentially missing five or 10 or 20 % by holding that in some other crypto asset or some other thing that you're wanting to pivot out of, that's going to move a lot more drastically in a much shorter period of time. So I like the kind of cushion that this gives you and the room for error that this gives you in sort of sticking in gold until the last minute, basically, until we know that the change is in and it's time to risk on again, basically.

14:35So I'm sticking with it. I think it's sort of the play right now in this moment overall. Very well said. One of our OG community members, DeFi Diffin, has been banging on his gold drum for over a month now. So I'm sure he loves what you just said about that trade. So I'm going to just quickly kind of talk about my two trade ideas for the week. It's kind of basically in the same vein. Last week I was saying, you know, I think we had a good possibility of getting a dip. And if you had some dry powder, it's kind of like a gift and on sale prices to enter. And I think that's exactly what we have. So I'm sticking with the tried and true method of DCAing.

15:17So I am just adding to my levels of SWE and Solana. Those are kind of like my picks for this cycle. So I'm just adding to my bags. We always say, you know, in times when the market's pumping, we always say, I don't have enough SOL, don't have enough SWE, I don't have enough this, I don't have enough that. Well, this is your chance to add more to that and not regret it later. So that's what I'm going with. I added SWE under$1.90 on Monday, and I added Solana under$100 on Monday as well. I got in at Solana$98. So I'm very happy with my entries there. And we're just going to continue riding. I think DCAing, for me at least, has been a very tried and true strategy.

15:59And every time I just continue with my DCA, I'm always up as opposed to when I make these pivots and try to chase gains. So don't get caught with your shirt out or off or whatever it is. you know just to stick to your plans guys but with that you know we have another yeah right you know if you can't watch the charts all the time I think that's just the way to go right so but with that though there is a chart that is just really just defying all logic I guess if you will right now and it has everyone on Twitter talking we definitely charted this on Monday in our longer version TA show but Chris Why don't you tell us about your next idea here?

16:45Yeah, like you said, on the show, it's all about Fartcoin. I mean, that's where it's all going. It's funny, as funny as it is, this has shown the strongest reversal pattern. If you go on CoinMarketCap and sort everything in the top 100 by daily and weekly, it's not always at the top, but it's, you know, number one. but it's always, it's been right there. I think, uh, and right now I want to say it's up 20 % on the day. It's leading my watch list. Um, nothing is even up above 10 % otherwise in this list that I have here. So, and it's been doing this regularly. I mean, it's been like another 20 % day here, you know, all these, I mean, lots of 20 % days it's, it's starting to push, um, uh, a higher, well, I mean, as long as this candle body holds, it'll be a higher high basically.

17:37and it's in a strong uptrend on a weekly level, on a daily level. It's basically outpacing everything right now. It's kind of the asset. And I'm not saying it's just outpacing meme coins. I'm saying it's outpacing everything. It's leading the top 100 crypto assets. So it's not just like just some obscure, way out the risk curve kind of thing. It's well in the top 100 in market cap. It's well-established. It's got a very diverse holder base. It's very organic. It's far less manipulated than, you know, a lot of stuff out there. It's far less manipulated than a lot of more centralized tech alts that have teams behind them that are managing the tokens that have VC money and airdrops and, you know, all this other stuff.

18:24Like, it's just a straight decentralized fair launch meme coin. And so to see this type of organic, you know, price appreciation is very noteworthy to me. And so this is this is pure, purely hype. And this is, you know, this is what has people's attention right now. And so now let's say it's very interesting. Now, Chris, let's say I I'm looking at this chart right now, you know, and I'm seeing all the, you know, the narratives on on on crypto Twitter right now about fart coin in general. Like, let's say I want to cut loose some of my underperforming memes that I have. Would you say, would I be FOMOing essentially into this trade right now if we were to cut loose some of our other memes to enter into Fartcoin?

19:13What would you say to those people that may have missed the initial entry but are eyeing it for an entry right now? I would say you haven't missed the boat yet. You could kind of look at it a couple different ways. We're kind of right at a bit of a breakout level, if you will. like if you look here, this is sort of the sort of support resistance level that I had been eyeing. Like it came up here and got rejected here. It did its final sort of capitulation. It reversed, ran up, got rejected here again, and then is sort of doing a bit of a cup and handle kind of thing right here. And so it's basically essentially just breaking out of this resistance level as we speak on the current daily candle.

19:54So this is sort of the breakout level that we're at. Now, sure, had you bought in lower, of course, you would have been better off, gotten a better entry. Nothing wrong with that. But you definitely haven't missed the boat yet. Like a lot of people would be waiting for this sort of a trigger before buying in anyway. Like this is what you would call the more conservative, more responsible entry point. Whereas buying down here would be the more aggressive entry. And sure, it's, you know, you're you're you stand to make more here, but also it's a much riskier play buying down here. Whereas buying here on the breakout potentially, especially if it'll come back up and retest this as support and then bounce from here that's like the ultimate conservative uh you know by buys by time so we're kind of right there um so no you haven't missed the boat obviously very you know a very short time ago it was up above 250 and i think that it's well within the cards to get back there if not even uh up to up to five dollars like i think that um a 10x is plausible obviously i'm not making a price prediction here nobody knows what's going to happen.

20:57But in terms of, you know, you have to remember its market cap is only around five, five, maybe 600 billion right now, 600 million, excuse me. And so, you know, as far as room to move, it's much, much lower than a lot of these other well-established higher market cap alts, like your Solanas and your Sweez and the stuff that are already well up into the billions or multi-billions, you know, those, their upside is a little bit more capped because of that. whereas this has lots of room to grow. And we've seen, it's certainly not unprecedented at all to see meme coins well up into the multi-billion dollar valuations.

21:34That's happened already this cycle earlier on with Bonk and Whiff before they corrected. Certainly the likes of Doge and SHIB have gotten up above 20 billion even in past cycles. So it's not, you know, again, not unprecedented whatsoever. And so I think if you pick the hot hand, which we know right now, So FART and also SPX are basically the top two. You know, again, they're right there. And so if the sort of space is going to coalesce around one or two meme coins, I'm going to say probably one of those two are the ones and seeing a 5 billion valuation, if not even higher, is within reason, I will say.

22:16So, yeah. Awesome. So I did want to get to the SPX chart, but we actually had quite a few questions come in. So I think let's maybe go to some of the live questions that we got. And then if we have time, we'll take a look at SPX versus Fartcoin later. But this question comes from JF. Chris, can you weigh in on better hedging practices and strategies when investing in crypto? Well, it's funny. Yes, but that starts to get really advanced really quickly in terms of how to go about it.

22:56I don't know, like we could spend a whole show talking about that. But like, just real quickly, I will say, like what I'm doing for right now in this moment, my hedging strategy is going back to the PAX G. Like that's an easy thing to do just to, you know, have a portion of your portfolio, you know, whatever percentage you're comfortable with, whether it's 25, 30, 50%, whatever, give or take, in something that is going to basically go opposite the crypto market. You know, we know like gold is basically a flight to safety for pretty much everything right now. And so when the crypto market's going down, likely a lot of that money is going into gold.

23:32Pretty much when anything is going down right now, a lot of that money is going into gold. And so that's, to me, the easy, easy hedge. But beyond that, you can get into delta neutral strategies with futures and options and things like that. again, it starts to get very complicated very quickly and not everybody has access to those instruments. So I don't want to dig into that too much, but yeah, I'm just going to leave it with that. To me, I think the easy peasy sort of no brainer entry level hedging approach right now is to embrace gold at the moment. So, yeah. Well said. Thank you for the question, JF.

24:09Next question get from Gabriel. Hey, Chris, I use the BTC VIX chart and I put a trend line from the 2015, 2020 and August 2024 and recent crash. BTC came and tested that level. And based on the previous crashes, this suggests that the bottom is in. What is your view on that? um there's certainly merit to that from a technical standpoint i i don't disagree and addition in addition to that we're seeing a lot of indicators out there saying that the bottom is in and um you know also the the liquidity chart that raul and julian show a lot of the times indicating the bottom is so yes technically uh i don't disagree i think you're spot on there i don't have a way to pull up that chart unfortunately so i can't like speak to it directly with specific points.

24:59But to me, I think right now, the bigger concern is not technical, but is what's going on with the trade situation. I mean, really, that's impacting everything beyond what the technicals are going to show. And I think until that gets resolved, we have to kind of defer to that and not ignore the technicals, but just maybe give a little bit less weight to what the technicals are showing because certainly the trade situation can and has had an outsized impact on all global markets. Like none of us, like I knew that the markets were going to correct back in January, just like everybody was saying.

25:38I had no idea they were going to drop as much as they did and be as extended as it has been. And that's directly because of the trade situation, not because of the technicals. And so I think we have to, again, give more weight to the trade situation, less weight to technicals and just wait until this situation, until there's clarity in the situation. I don't want to say until it's resolved, but until an end game is clear, I think that's really the outcome that we're looking for and whatever that is. So yeah, but good question. Yeah, that's a great question, Gabriel. Yeah, Raoul always says crypto is macro and we're seeing exactly that right now.

26:16Okay, next question comes from Stuart about Bitcoin dominance. So So BTC dominance lowering does not mean that Bitcoin does not continue to rise. It is just at a slower rate. Is that correct? Yes, that is correct. Like, yeah, if we because if we go back to this chart, certainly we know. So Bitcoin dominance bottomed, you know, at the end of well, in whatever, August 2021. but we know Bitcoin was actually hitting all-time highs roughly at the same time. So yes, no, Bitcoin dominance does not correlate to Bitcoin price at all in that sense. It just meant, in this case, it meant everything else, ETH and all the other stuff, all the money was going into that more so.

27:06So those prices were going up at a higher rate, but Bitcoin price was still going up. So Bitcoin price actually can be peaking at the same time that its dominance is bottoming. honestly. Thank you for the question, Stuart. I think that is that's all the questions we have for today. Chris, any like any any thoughts or anything you you're thinking about maybe for the rest of the week? Do we want to touch on SPX or? Yeah, we have a few minutes here. Why don't we why don't we see what SPX is doing? Because those are the two memes, essentially, that I'm just seeing everywhere on the timeline, right?

27:47SPX and Fartcoin. So I think this would be good for anyone who's maybe considering what to do between those two. Let's see what the charts are saying. Well, and not just memes, but again, these two are outpacing most everything, not just memes. So what I have here, I think this is a really interesting chart that I've been following for a while now, is I've got four different panes here, and these are all Bitcoin pairs. So basically, this is the SPX Bitcoin pair. We have the Fartcoin Bitcoin pair, SWE Bitcoin, and then Solana Bitcoin. And so I think it's important to note, you know, to basically look at these compared to some of the other majors that are, you know, that everybody's holding, that everyone's talking about.

28:30And so we can see here that basically at their sort of main support resistance levels, SPX Bitcoin is holding up very well. It didn't It didn't break down as much as some of the other ones structurally. It sort of dipped down below its structure for a second, but it regained it and is back above it. Fartcoin, you know, lost it a little bit more, but has essentially recovered its major support against Bitcoin. SWE was very similar to SPX in that it lost it a little bit and is kind of holding right at it. Solana on the other end isn't faring as well because it sort of had outsized losses due to everybody kind of exiting the meme coin sector.