Has the market reached the bottom? I don't know. Really no one knows. Maybe..maybe not. How do you prepare for that? There is a way!

I'll cover how to prepare as well this week's news and notes.

News and Links

https://blog.celsius.network/a-note-to-the-celsius-community-e5af1f5a7998

https://www.coindesk.com/tech/2022/06/19/solana-defi-platform-votes-to-control-whale-account-in-bid-to-avoid-liquidation-chaos

Hey, everyone.

You know what?

We're going to change this up.

How's everybody doing tonight?

I'm going to drink the Earl Grey.

I'm not going to give you financial advice, and we're going to talk.

So I think for a lot of us, it's been a tough week in regards to crypto, especially.

We are significantly down.

As I'm recording, Bitcoin is sitting right at $20,000.

Ethereum is at $10.82, so $1,082.

They are both down significantly.

We've had a lot of events going on this week that may be not unexpected.

In my view, they happened faster than a lot of people thought.

And we may not be done yet.

So right around 7, 8 o'clock Eastern time yesterday, Saturday, Bitcoin hit its low,

and that reached roughly $17,600.

Now, are we done yet?

Is this the bottom?

Are we only going up from here?

I can't answer that question.

It is possible.

We obviously, we've recovered about $2,000, $2,400 from there.

But the weekly close of this week on Sunday was what's never been done before.

It closed below the 200-week moving average.

So this has actually never happened in the history of Bitcoin.

We've gone below the 200-week moving average.

We have never closed a week below that.

So that's a pretty big deal, and we're still a couple of thousand dollars below it.

I don't recall offhand what the moving average is right now, but it's somewhere around $2,200

or so.

$22,000, I should say.

So could we drop more?

By the time this podcast comes out, it could drop more.

Tomorrow, Monday is a holiday here in the United States.

Stock markets are closed, and I don't know.

It may just kind of stay around $20,000 until Tuesday morning, and then the stock market

opens.

And if the stock market opens down, crypto may go down as well.

The upcoming market is actually showing slightly up.

I don't know.

That's never a solid indicator in my opinion, maybe for the first five minutes of the opening

bell, but in general, not necessarily the best.

We have a lot of indicators saying that we're at or near the bottom.

We also have a lot of...I believe what's different about this market than prior markets is that

there's a lot of leverage going on, a lot, an extreme amount.

And when assets are getting liquidated, it sets off a chain reaction that then ends up

causing large drops that we didn't see as frequently in the past.

We have some news this week, and it does actually tie into what we're talking about right here.

I will go ahead and bring up Celsius, which we discussed last episode.

They suspended trading, well, essentially that's what they did.

They suspended money moving in and out of their platform, their lending platform, probably

highly leveraged in order to get the returns that they were getting.

The highest I think they had was like 18%.

So it turns out that's probably too much.

Crypto Twitter has turned into even more of a soap opera than it is normally.

It's been kind of fascinating, actually, and including someone today, and I'm not going

to name names, it's not my...I have no business doing that, no reason to do that, who's saying

that if someone can prove with insider information essentially that the Celsius collapse, which

is what's going on, was caused by a coordinated attack, then there's a $20 million reward,

a not insignificant amount of money.

The reality is it may have been a coordinated attack, but that's not illegal.

I'm sure that it's happened in the past in Wall Street with TradFi, traditional financing,

and it has happened before.

I'm quite certain in crypto.

In fact, the Terra Luna debacle may have been a coordinated attack.

I believe I've mentioned that maybe multiple times.

And the reality is, like I said, that's not illegal, and that's part of the problem.

There's no central bank that's going to come in and bail out Celsius.

They did the Lehman Brothers fiasco back in, what, 2007, whenever it was.

Now someone may choose to buy Celsius and bail them out that way, but the government's

not going to swoop in and take taxpayer money and use that to pay that off, and I don't

think that they should.

Now, I also don't think that they should have bailed out the banks.

That's just kind of my bent, but regardless, it's not going to happen.

There are some who even believe, and this is possible, that Celsius, the coordinated

attack, came from one of the companies who's now coming in to offer to bail them out rather

conveniently.

So that's a trick.

What all this indicates to me is that we have a lot of shakeout, and maybe I should have

highlighted this, but if there were people, there probably are, but if there were people

who were discussing this prior to very recently, I'd certainly have not heard any strong reasonings.

There's people who always will say, well, this business or that business, it's a shady

thing.

So there's been allegations about Tether, for example, for as long as I can remember,

and there's no real substantial evidence that there's any issues with Tether.

But now what we're seeing is how the loss of one company, Terra Luna, the Terra ecosystem,

is then potentially triggering other companies, such as the one that I talked about last week,

BAC, or AC3, I don't know, something like that, a hedge fund, essentially.

So they're having issues, and now it's, well, I've heard that Tether was a decent part of

the Celsius portfolio.

I don't know if that's true or not.

I'm not going to speculate on that.

It's certainly possible.

And then you get the rapid market drop, which if they did not anticipate, and they were

highly leveraged, which surely they were to get that kind of return, then it could cause

liquidation chain events, which is kind of what we saw.

So where do we go from here?

Well, as you all know, personally for me, I've become very uncomfortable with this current

DeFi environment.

I've basically said that beyond Ethereum itself, and ADA, and Bitcoin, of course, that I'm

not going to be investing on any other tokens for the foreseeable future, because I don't

want to gamble.

You can lose your money investing, certainly, but you could also be more conservative about

it or more not conservative.

I don't know what the right word for it is, right?

But those non-conservative investments are typically riskier.

There's a higher chance that you'll lose your money.

Is it conservative or not conservative to put your money in an entity who doesn't have

major insurance backing and is offering 18-plus percent return on investment?

And I think the answer to that is it's not conservative, because clearly there's leveraging

going on to make that kind of return.

That's how they do it.

They're taking the assets of the customers, they're going out and doing things with those,

and then they're returning part of that back to the customers.

Well, they made bad investments, essentially, and they're getting liquidated, they're losing

their funds, and now they've locked everything up.

And I don't think the Celsius thing is going to end well.

I'm just going to go ahead and say that.

I think the lawyers that they've hired at this point are basically figuring out, and

I could be all wrong about this, but they're figuring out, in my opinion, how to restructure

things so that they save as much money as possible for the people who are behind it.

The investors, quote.

And I'm getting tired of the investors taking advantage of the clients when the investors

screw up.

So another bit of news, and I'm going to weave in the news this week, because it's relevant

to this discussion, I think.

Our old friend Solana.

I love talking about Solana.

It's just so much fun.

So we're going to talk about Solana for just a minute, and we're going to talk about—oh,

and by the way, before I leave Celsius, they posted a new note.

It will be in the show notes, and basically they're saying, yeah, we're still working

on it, but we're not going to be talking to anybody.

So now they're just not communicating, which is terrific.

Yeah.

Okay.

All right.

So moving on to Solana, a lovely example of a centralized crypto, venture-backed.

And what that means is, number one, they got lots of money, but number two, really those

people behind the project are—you could almost say they're pulling the strings.

All right.

So what did they do?

There are DAOs, digital autonomous organizations, which give basically people voting rights

based on—typically based on the amount that they have invested.

And this, I guess, isn't directly related to Solana.

It's really directly related to this service, which is called Soland, but it is a Solana

borrow and lending service.

And I don't know anything about it, but there was a vote Sunday to force the takeover of

Soland's largest account, a whale, what we would call a whale in the crypto industry,

because that whale who had an extremely large margin position—and I'm reading some of

this directly from this article—was getting, according to Soland contributors, dangerously

close to a catastrophic on-chain liquidation cliff.

Okay.

So this is their very first governance vote, according to this article, and it will grant

Soland Labs emergency powers to liquidate a whale's vulnerable assets, about $20 million

solve in Solana via over-the-counter trades instead of the decentralized exchanges if

the price of Solana drops too low, because the on-chain liquidation of the whale's position

would cause chaos in Solana's DeFi marketing.

I'm not okay with this.

I do believe that DAOs have a place in a decentralized future, but this is not okay.

The account in question had over 95% of the pool's deposits, and against that, it had

borrowed $108 million in stablecoins.

If Solana hit $22.30, the account would be liable for around $20 million.

And I don't know—I think a lot of this relates to people not actually thinking.

There is a lot of people who have this worldview of crypto as it's going to go straight up.

And as I always say, if you zoom out, yes, it goes up to the right.

But if you zoom in, that's not the case.

And in fact, as an example, I've mentioned before on this show about Mt.

Cox, in June of 2011, the price of Bitcoin was at $32, and because of what was going

on on Mt.

Cox, which basically was the only show in town in terms of a centralized exchange and

the only easy way to buy and sell Bitcoin, the price went down to a cent.

That's mind-boggling, but it's true.

But you know what it did after that?

It went back up.

And like I said last week, last episode, I do not believe that Bitcoin will go to zero

because there are people who will never sell their Bitcoin who, to them, it's more than

money.

It's what it truly represents.

It represents a decentralized currency that's not controlled by government.

And they don't care.

They will use it regardless.

I don't know where all this stuff is going.

I don't know where the price is going.

I'm going to talk in just a second about the price to kind of wrap this up.

But I do know that with Bitcoin, it will be around.

I can't tell you with any level of certainty beyond Bitcoin, Ethereum, and maybe ADA, and

I wouldn't put a strong position in ADA, to be honest.

There's a lot of ADA people out there who would completely disagree, but I wouldn't

be investing in Nex.io or Nexus or whatever it is and Block.io and Celsius and any Solana

based products and so on and so forth.

There's too many unknowns at this point.

There's too many things that can lead to catastrophic failures of these systems.

And the system as a whole will cleanse itself.

One good thing about these bear markets is it cleanses things.

It cleanses out the system.

This highly leveraged speculative whatever, it needs to go.

And it does not need to be propped up by the government.

It doesn't need to be propped up by people in the industry.

It just needs to go.

If you can target a platform and take it down without a tremendous amount of money, frankly,

at least in traditional financial terms, then that's a weak system.

And this is going to sound harsh, but it's true.

That system needs to be cleansed.

If Celsius can't withstand the pressure, then it needs to fail.

Now, I'm extremely sorry for the people in that system.

And I hope even if it takes going to court, that they will get as much of their money

back as possible.

Now, I don't think that's going to happen.

But I hope that's what happens because it's the individual retail investors that end up

getting shafted in all this time and time and time again, and I'm tired of seeing it.

So as we move forward into this crypto future, and there will be one, regardless of prices

and what happens, then maybe it will be a better future if a lot of this is flushed

out.

There will always be scams.

There will always be whatever, fly-by-night schemes, people taking advantage of you, influencers

on YouTube who are shilling some products for extreme amounts of money.

And then they don't tell you, and it happens all the time.

There's just so much stuff going on here, and it just needs to get flushed out.

So where do we go from terms of prices?

Like I said, I truly don't know.

We could go up.

That could have been it.

I don't believe so.

I follow a guy on Twitter, Bill, I think his last name is Nobles.

He's been around for a long time, and he's an old-school guy.

I love it when he puts pictures of his hand-drawn charts on graph paper.

I mean, he's old-school.

And he's been pretty accurate about a lot of this stuff, and I'm going to tell you what

his support and resistance levels are, and these are probably pretty close.

And you may want to jot these down.

I have them written down myself, and I'll tell you after I get done what I think might

happen.

Now keep in mind, this was written a couple of hours ago, I believe.

The price right now is $20,000, basically.

So we'll start with Bitcoin.

So for resistance levels, so these are levels that are above the current price that probably

when Bitcoin gets there, it will at least pause, if not get rejected from.

From top to bottom, $25,300, $23,000, $22,300, and then $21,700.

So we are currently at $20,000.

The first support level is $19,400, $18,600, $16,700, and then $14,200.

Now we got in between $18,600 and $16,700 when it stopped.

If you recall, it was $17,700 something.

So there must have been another reason why it turned around at that point.

We never reached $16,700.

I think we'll go back, to be honest.

I don't think this is done with.

Celsius is not done with, in my opinion.

Maybe the best outcome would be that another company buys them and that takes care of that,

but I could still see them getting liquidated, and if that happens, it will dump the price

of both Bitcoin and Ethereum.

For Ethereum, we have resistance at $1,390, $1,220, and then $1,170.

We're currently at $1,084, so we're slightly above a level at $1,060.

So we're kind of trapped in between there right now.

We'll see if $1,060 will hold as support.

For support, we got $960, $823, $770, and $350.

Now where did we end up the other night for Ethereum?

For Ethereum, we ended up, actually, we ended up higher than I thought we would when this

all started going on.

We ended up at $884.

I thought we were going to go lower than that, but we will see.

What's the best way for you as an investor to benefit?

Now if you're in this for the long haul, if you're not in this for the long haul, you've

probably already sold, let's be honest, and you sold at a loss, most likely, and I'm sorry.

If you are in this for the long haul, what do we say?

DCA, Dollar Cost Average, I hope you're buying.

You may want to pick up your frequency of buying.

If you only buy once a month, you might even want to break that down to once a week, or

maybe even twice weekly, so that you can, it's more likely that you catch the dip.

I would encourage you at this point to start thinking very strongly about what would you

do if we have a real breakdown.

So we've had a breakdown.

We've gone below the 200-week SMA.

We've now done that for the week, but what happens if next week or even tomorrow we start

having some more liquidations, Celsius closes up shop, something else, that triggers something

else, and we have a real meltdown.

What if we have a Mt. Gox moment, which is entirely possible at this point, in my opinion.

It will be different than what happened with Mt. Gox, but it is possible that we could

have this cascading liquidation that could push prices even down to $300 for Ethereum

or less.

Bitcoin, I think it's likely, frankly, that Bitcoin will go below $14,000 before this

is over.

I don't think that's going to take too much.

We're within $3,000 of that already.

Push it a little bit further if we break through $14,000.

We may see sub-$10,000 Bitcoin before this is over, and it may be the last time we ever

see it.

So it's something to think about.

No guarantees, of course.

But if you're dollar-cost averaging and you think that we're going to have these events,

what can you do?

So I sat down the other night and penciled out, I'm willing to spend this amount of money,

and I can buy these assets, to be honest, Ethereum and Bitcoin, at these prices.

So I figured it out.

If I get to this level, I can buy this many.

And what I've done is I've kind of stair-stepped it down.

So maybe at $823 when we reach that, if we do, I buy half an Ethereum.

At $770, maybe I buy three-quarters.

If I hit $350, I'm all in.

I'm not going to wait to go below $350.

Maybe it does go down to $200 or $100.

I don't know, but $350 for me is kind of that level.

If I can buy 10 Ethereum for $3,500, then that's what I do.

Now, Bitcoin, on the other hand, I'm actually looking at lower levels than these.

At $16.7, I would probably buy a little bit.

At $14.2, I might buy a little bit more.

But I believe we're already so close to these levels, I actually think we're going to go

below that.

That's my opinion, it is not financial advice, and I'm not suggesting that you expect that

to happen.

But I've got levels set out that I'm willing to buy this much, this much, and maybe at

$10,000, I can buy a quarter of a Bitcoin or a little bit more, whatever.

Now, the odd thing about all this is it almost always happens in the middle of the night

or at a very inconvenient time, at least for you, and you're not sitting there ready to

buy.

What do you do?

You set up buy orders.

Now, unfortunately, that means you have to have the cash on the exchange.

But if you can prepare, then you can buy these dips even when they're lightening fast.

You just have to plan ahead.

So I'm not going to tell you what levels to buy at and what amounts to buy.

That is certainly up to you.

I do think it's possible that we...

I believe it's highly likely, let me put it this way, we reached 880, almost, it was basically

900.

It just kind of dipped below it just very briefly for Ethereum.

I'm fairly certain, to be honest, that we're going to reach 823 before this is over, whether

it's right now or whether it's a month from now or even six months from now.

So I'm going to set up a buy order for that at that level, or probably 830.

I always want to cheat a little bit on the upside of this.

You do not want to get missed, especially an epic 350 Ethereum, oh, I put it in for

350 and it hit 351 and my order didn't get filled.

That would really, really be bad.

So anyways, basically you just set those orders up and then if it happens, it happens.

If it doesn't, you continue to DCA and we just move on.

Eventually we'll be out of this bear market.

I hope that makes sense.

I know this has been a little bit different of an episode.

I think I quite frequently have different episodes.

I don't know.

Some might call it stream of conscience.

I don't know that I would go that far, but it's just what's frankly been in the news

this week.

I mean, it's almost like it's been reaching a crescendo, but I felt like when it got to

the bottom, we weren't done yet.

And yes, we rebounded, but I may be wrong.

I may be wrong.

And maybe I'm just jaded at this point because we've had such straight dumpage.

Chance would say most likely we're going to go up at this point because we've had what?

I don't know.

10 out of 11 weeks have been down or something.

Surely the next week is going to be up, right?

And maybe we do.

Maybe we pop up.

I think at this point that 200 week moving average becomes very important.

Do we go above it?

Do we stay below it?

When we reach that mark and move above it, decisively come back and retest it, then most

likely we will not go back down below it.

But we are below it right now.

And until we move above it, I will stay firmly a bear at this point.

And I will think we are eventually going to go down.

Now I almost just wanted to get it done with.

Let's just go ahead and dump everything and get all this leverage out of the system.

Get all this leverage out of the system.

Cleanse everything.

Just done.

And it's going to hurt.

It's going to hurt really bad.

But then it will be done and we can move on.

I hope we build a better system this time around.

And I truly mean that.

And I will change.

I am changing the way, as you guys know, the way that I approach this stuff.

I'm becoming more conservative.

And I will, the projects that I'm involved in, they will be, I just don't really have

a lot of use at this point for fancy speculative platforms.

Okay?

I just don't.

I think too many people get hurt.

All right.

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Now go out and make it a great week.

I'll see you in the next one.