Introduction

In this video, Nicholas Merton from Data Dash talks about the crypto market and Bitcoin's long-term bull market. He emphasizes the importance of keeping an eye on various factors that can affect the market.

Expectations for Bitcoin's Price

• Nicholas emphasizes that they are expecting a relief rally in Bitcoin's price.

• He believes that there could be a bolster in Bitcoin's price over the next few days.

• However, he also mentions that they still believe that Bitcoin is in a long-term downtrend.

• They expect to see some chop within a significant range before it eventually breaks down sometime in late April or early May.

Signs of Long-Term Bear Market

• Nicholas explains why they are confident that we're still in a long-term bear market.

• The grayscale gbtc Bitcoin etn product has seen its discount recover but is still facing consistent resistance around 35 on the discount range.

• This shows that institutions are not buying up Bitcoin, and even the retail crowd is not showing much interest.

Conclusion

Nicholas advises caution when trading and not chasing every single potential trade opportunity. It's essential to wait for clear signs of capitulation before building positions.

GBTC Discount and Binance Allegations

This section discusses the current discount on GBTC shares and allegations against Binance.

GBTC Discount

• The resting 37% discount on GBTC shares is proof that there is still too much supply in the market versus actual market demand.

• Until this discount window is removed, a sustainable market for the long term cannot be seen.

Binance Allegations

• The CFTC has come out with allegations that the team at Binance has been running an insider trading desk trading against its own users to turn a profit.

• There are broad claims trying to get US users onboarded, but there is no direct opinion in either direction.

• While binance still stands today as one of the more resilient players in the crypto space, it took six months after Celsius had collapsed for us to realize that FTX Voyager and so many other players were underwater.

Stablecoin Liquidity Decline

This section discusses stablecoin liquidity decline and its impact on driving rallies.

Stablecoin Liquidity Decline

• Stable coin liquidity has been on the decline, which is drying up available dollar liquidity to drive rallies to drive a continued bull market.

• We have seen a huge net outflow of stable coins from exchanges, which doesn't make me concerned about Binance as an exchange but more specifically about the broader trend in the crypto space.

• If we're not seeing a broader rapid expansion in stable coin liquidity, valuations are not going to sustain a long-term rally.

Broader Trend in Stablecoin Liquidity

This section discusses the broader trend in stablecoin liquidity and its impact on the crypto market.

Broader Trend in Stablecoin Liquidity

• The two largest players, BUSD, USDT, have been on the decline since April 2022.

• If we're not seeing a broader rapid expansion and stable coin liquidity, there are concerns around closing on-ramps in stable coins.

Stablecoin Liquidity and Bank Runs

In this section, the speaker discusses stablecoin liquidity and its relationship with Bitcoin's price action. The speaker also talks about bank runs and how they affect the broader financial system.

Stablecoin Liquidity

• During the last bull market, there was a rapid expansion in stablecoin liquidity following Bitcoin's price action.

• Since November 2021, stablecoin liquidity has increased from around $107 billion to $112 billion.

• However, month-over-month increases have been single-digit, which is not enough to drive bull markets.

Bank Runs

• The speaker observes dozens of charts throughout any given week to understand the macro picture.

• Multi-billion dollar banks like Silicon Valley Bank or First Republic Bank getting wiped off the face of the Earth are killing equity value and getting investors concerned about where they have their capital exposed.

• While some people may want to get their money out of the financial system due to bank runs, depositors are usually covered by FDIC. Shareholders of banks like SVB or First Republic Bank are more likely to be affected.

• Those exposed to underlying assets like equity are vulnerable during these times.

Contractionary and Recessionary Environment

In this section, the speaker talks about how recent events indicate a contractionary and recessionary environment.

Regional Banks

• The IIT or iShares U.S Regional Banks ETF has practically sliced in half since its highs back in January 2022 at around $69 per share down here thirty-five dollars per share back during pandemic territory in 2020.

• While some people are betting on this falling off the face of the Earth, the FED coming in so swiftly and protecting depositors is an interesting sign that this may not be a contagious event as those deposits are finding a new home in larger established banks.

Bond Yields

• Bond yields are still holding up since mid-March, staying above the 200-day moving average. This is a sign that the FED is going to keep rates suspended higher.

The VIX and Bond Yields

In this section, the speaker discusses the significance of the VIX and bond yields in predicting market trends.

The VIX and Market Trends

• The VIX is down pre-market towards 19 points, indicating low volatility.

• If the VIX is not holding above the 200-day or 200-week line, it likely means that stocks will continue to rally for a couple more days or weeks.

• The fact that the VIX has not been able to get above the 33-point line even when there was a banking system collapse shows that it's a recession, not some massive depression.

Bond Yields and Recession Prediction

• The yield curve in bond markets predicts recessions. Historic relevance shows that major bumps are not signs of optimism but rather indicate things are about to get worse.

• It happens slowly and steadily, catching people off guard because they get caught up in optimistic narratives when it seems to be paying off.

Inflation Control

In this section, the speaker talks about inflation control by FED.

PCE Expansion

• PCE for January came in at point six percent which was the biggest month-over-month expansion after already having expansions in November and December.

• By only going up 25 basis points starting to slowly curb rate hikes from 75 basis points to 25 tells me everything that FED hasn't done enough and they're gonna have to work even harder.

Conclusion

In this section, the speaker concludes the video by giving his opinion on the market trends.

Market Trends

• The speaker gives his opinion on the market trends and says that he doesn't want to speak in absolute terms.

Technology Stocks and AI Trends

In this section, the speaker discusses the current state of technology stocks and the potential impact of AI trends on the market.

Semiconductor Companies and AI Trend

• The market is currently being led by companies that create semiconductors, GPUs, CPUs, and other computer components that could benefit from an overall move into the trend around AI.

• However, there is a major glut in supply of semiconductors and computer processors in the market right now. Micron has faced losses in Q1 2023 due to this.

• Nvidia is one of the best potential players in the market to benefit from this AI trend because it's a GPU manufacturer. If Nvidia comes out with disappointing earnings, it will be disastrous for equity markets.

Tech Sector without Semiconductors

• If you remove semiconductors from measuring broader tech sector as a measurement, it's pretty disastrous when you're really measuring in Fang stocks.

• Nvidia is one of the last hopes here along with Microsoft due to its exposure to open AI.

Bitcoin and Bear Markets

• It's never fun to have to go through bear markets but losing more money than you possibly already have or making one wrong trade on leverage can be much worse.

• Too many people don't know how to protect their money during bear markets when there are tons of sharks from exchanges to inside traders who will take advantage of them.

Trading Strategies for Extreme Market Conditions

In this section, the speaker discusses trading strategies for extreme market conditions and emphasizes the importance of waiting for opportune moments to strike.

The Best Traders Strike in the Least Amount of Trades

• The best traders strike in the least amount of trades in a given year.

• They trade sometimes two or three times a year, waiting for those opportune moments when things are getting too extreme in either direction.

Bullish Narrative Getting Absurdly High

• The bullish narrative is getting to pretty absurd lengths.

• It may continue as we go into 28 to 32k here over the next couple of days.

• We could start to finally get into territory that may look optimal for a short.

Not Short Right Now

• They are not short right now.

• If they ever look at doing a position like that, they will let viewers know.

Conclusion

• Thank you all so much for watching.

• Dropping a like is one of the best ways to support the channel.

• Until the next video, take care.