This week Gerbz & Brian Russ dove into dozens of charts spanning everything from high level global finance to new altcoins you never knew existed. In Part 1 we explored Global Macro conditions. In this Part 2, we dive into Bitcoin & Ethereum ahead of crypto’s inevitable bull market breakout.
Show Notes
Gerbz: What's up crew? And welcome back to another episode of the BitLift Podcast. Where we don't just stack crypto, we don't just doodle on charts, we use crypto. We use it every day. That's why we know something big is happening here. I'm here today with my buddy Brian Russ. He's not just a trader. He's not just a bankster.
He knows tons about global finance. We just finished an hour long conversation talking global macro, global liquidity, and different external factors that are going to play into this market cycle. That's Brian's sweet spot that he knows a ton about that. He also happens to be in Bitcoin and longtime crypto trader as well. We broke that off as episode one, episode two, we go deeper down the rabbit hole.
We're going to throw up so many charts. If you're just listening on audio, we do our absolute best to describe exactly what we're looking at. But if you want to see what we're looking at, fire up YouTube, go check out the charts over there, gonna just break them all down for you.
So first let's talk a little bit of Bitcoin and ETH. We'll kick it off there.
That was a fun deep dive into macro. Let's talk crypto.
Brian: Yeah, let's do it. I thought, why don't you take us down into crypto? Maybe we could start with the majors and we'll take it from there.
Gerbz: Very good. All right.
This is my Bitcoin chart. This is the chart I share all the time. If you're subscribed to the BitLift newsletter, you probably see this chart all the time. I usually do the cycle update, I call it in the BitLift newsletter, every weekend. I don't even need to give you guys an update every weekend about what's happening with the cycle, the cycle takes four fricking years. We're in the bull market phase of it, or just about to be in the second, I would call the second half of the bull market phase, for Bitcoin.
But this is the chart, this is like the default template that I lay on top of my Bitcoin chart all the time. And I actually added the election to it recently, just because I think it's so interesting how close it always is with the halving. You even mentioned the other day to me, Brian, about how Raoul Pal is talking about how the global liquidity and global macro, there's all these like different cycles that may be overlapping each other now.
We talk Bitcoin having, we talk election, they both happen in November every four years now. Like, that's a strange phenomenon. There's more rates starting to get cut now around this time, everything's kind of coming together for another epic bull run. In probably all markets, let alone crypto, but here's crypto.
Here's Bitcoin. I don't have any exciting resistance or support lines here. Like, the resistance line is the last cycles top. It's just that easy. That 2021, '21 all time high over here, $69,000 to the penny. I always cannot believe that $69,000 to the penny is the top.
That's why I joked that my prediction for this cycle is that $420K to the penny is going to be the top of this cycle, because there's just no rhyme or reason for how we hit it to the penny. It's just silly at this point, but we did. So this is the Bitcoin chart election, obviously on deck.
I've pumped the brakes on alts a little bit. I've been trading alts for the last few months, and most of those positions I actually sold at a loss just to harvest the taxes on them because they just haven't been doing what I expected. And I didn't want it to get worse. I figured let's wait till the election comes and see where we go.
There's tons of talk about whether like red or blue team causes us to pump or dump. I think no matter what team wins come election, we're going to pump. Bitcoin is going to break out as it typically does as part of this four year cycle.
So the halving was in April we're in September. What does that give us? April May, June, July, August, September. We're five months after the halving. We always talk about how six months after the halving is a breakout. I mean, looks poised for a breakout here. That's what I'm seeing in front of me.
If you guys have been following me for a while, you know I talk about the trillion dollar market cap quite a bit. And I actually talk about the hundred million, a hundred billion, and hundred trillion market caps along the way of Bitcoin's journey. It's just used those big round market cap numbers as waypoints along the way. And I kind of think that the story of last cycle was, "Does Bitcoin want to be a trillion dollar asset or not?"
And I think the answer was no. That's what these two humps represent. It was like, do we want to be a trillion? Uh, no, we can't handle it. Let's try one more time. Uh, we can't hang. So it was the end of the cycle there. Now coming into this cycle, here we are four years after, or I guess this would be like three years after right now. We're trending above the $1 trillion line here.
We're using the trillion dollar market cap as support, and that to me is super bullish. We're consolidating here. We're building this beautiful support here at the trillion dollar level, and I think we're poised to break out come election or not and rip to wherever we think we're ripping to. Where, are we ripping to Brian?
Brian: Ha! Anybody's guess. But I will point out that two episodes ago, you and I pulled your trillion dollar market cap level at $53K, 54K and said, if you don't have enough Bitcoin, buy anything you can below this level. And just zooming out and looking at your chart right here at that one wick. that dip below, you can see it. And this messy consolidation was an awesome buying opportunity. It probably felt really crummy at the time, but I hope some people picked up some cheap Bitcoin on that sell off.
Gerbz: That was a hard week. We're looking at the weekly chart and you know how this wild ride goes. The euphoric rise and the meteoric falls. They're hard, man. But then obviously you zoom out and you're like, wait, that's all it was this little like consolidation pattern that we had. That's what I was feeling?
Like, it's going to be okay, guys. it's going to be okay. So, I think we're poised for a breakout here. What that means very likely is something along the lines of breaking above $69K on a big bullish candle. Something with obviously on high volume as well. And then probably just retesting it, coming back, retesting $70K again. Just to double check that we're ready to be broken out and stay broken out, and then it's off to the races.
Do I have, oh yeah, I do. Even have some eyeballs up here at, where is that? That's at $300K. I don't know. I've been talking $250K is kind of like, I would love to capture a bunch of Bitcoin sales at $250K this cycle. Somewhere around October of 2025, which is a full year from now.
But that gives us all of this time here to just rip, and who knows what this pattern could look like. I've taken past cycles and overlaid it on here to kind of use my subconscious to see if it makes sense and like, gauge what these kinds of candles could look like from where we are today to where we could be a year from now.
And it's simple to see Bitcoin doing something like this. It's simple to see Bitcoin doing something ridiculous in my mind. I know you've mentioned to me, Brian, that you think the past meteoric bull markets that we've had, we were at such lower market caps in those days that they made more sense to you. You don't maybe see Bitcoin doing like a 10x rip here like we've seen in previous cycles?
Brian: It's certainly possible. The larger an asset becomes in terms of its market cap, the harder it is to move that ship, right? It's just a heavier boat to move. So, it's going to take more. So, it's not that we can't get a 10x move. Also, where did we bottom, like $15K? I mean, $150K wouldn't surprise me.
So it kind of 10x's off what level, right? Off of 69. Going $69K from the prior high to $690K, I think it would take a major catalyst. Like, you would need some real, some news. And it wouldn't just be your typical kind of risk on speculative sentiment get stretched bull market, you'd need some real catalyst to do that.
Gerbz: You need something big. You need something like, I don't know, the U.S. government putting Bitcoin on its balance sheet, China starting to compete with them at, that every major country coming in to try to compete against that. I don't know, something like what we've been seeing happening.
So I could see it happening, that's all I'm saying, I could see it going that way. We're talking about big global financial moves now. This Bitcoin is not playing. Oh, it was so fun and easy in the early days, wasn't it? When we were just like joking about this kind of happening someday. Now it's like serious, man. Maybe too serious, sometimes.
Brian: We got to lighten up.
Gerbz: Let's lighten up.
[00:07:58] BTC Dominance
Gerbz: Let's lighten up. Let's look at the Bitcoin dominance, that's light. Bitcoin dominance talks about, of the entire crypto market cap - which I think includes stablecoins for some reason, I gotta double check how TradingView calculates it - but of the entire crypto market cap, what percentage of that does Bitcoin itself represent?
And it's at 57%, which is a massive number. People, we talk about how big Bitcoin is, but man is it, it's massive compared to everything else. It just is. Let's see, I know you like horizontal lines. Let's see if I can make one here somewhere. I don't know if anywhere over here actually makes some sense. But, we're maybe poised for a little breakout on my horizontal line here.
Let's see. In the 2021, which is kind of the second hump of the last cycle, Bitcoin topped out here at 73 percent of the entire crypto market cap. So that's a big number. We're at 57% now. Obviously we've been trending, just like, beautifully trending higher. I wish I could, you could just trade the dominance almost. That would be a fun way to play this. Since the beginning of 2023 it's just been up into the right, and in a really tight pattern as well. What does a tight pattern like this say to you?
Brian: Well look, there's a lot of competing assets that have a tremendous amount of value. So I think the tight pattern represents the fact that it's not a crystal clear, easy path. Is Bitcoin the only asset in the space that has value, or is there other stuff that may have value as well?
I think the choppiness sort of represents the pull and push, kind of the tug of war, between Bitcoin and some of the L1s and competitors that are using this tech as infrastructure, but trying to build things that aren't Bitcoin. That are different than Bitcoin.
Gerbz: And I mean, the simple way of understanding this chart is that this is Bitcoin winning against everything else right now. This is Bitcoin outperforming ETH. This is Bitcoin outperforming all the alt L1s, all the DeFi apps, everything there is in crypto. This is Bitcoin crushing it.
Maybe some of this can be, you know, appointed to the ETF that we saw. But we also saw an ETH ETF not that long ago, and no one talks about it or even like, mentions it in conversation that there is one. So we'll see if that ever catches on.
[00:10:07] ETH Dominance
Gerbz: But speaking of ETH, so this was Bitcoin at 60 percent ish, let's call it dominance.
ETH is about 15 percent dominance. We're talking between Bitcoin and ETH. We're talking 75 percent of the entire crypto market. That leaves 25 percent for everything else. There's so many, you can see in my chart of all of my watch list. Of everything else that I watch, all of these are the other 25%.
I think stablecoins are actually part of that hundred. So I think that's like 5 percent of it. ETH being at like 15. And then, ETH was very sideways since the end of last cycle. It didn't even really dip really hard when the bull market was over. It obviously had this moment here, May '22. Was that Luna, maybe? I don't know, I think that was. But then it just came right back and we're now lower than it. And look, it's actually lower than its previous low by a little bit. So I know that might, that could jump out at you a little bit.
Do we think Ethereum can go lower as far as dominance? Are Ethereum's days over? There's so much FUD on crypto Twitter about the end is here for Ethereum.
I kind of buy into some of it. I'm not a full ETH bear, but man, it's hard to see. There's so much competition in general purpose smart contract chains right now. there's tons of them. They're really big, they've got huge war chests. Can ETH compete with that or do we see, are we just ready for, are we bottoming out here? And the cycle starts pumping and so does ETH?
Brian: First of all, I've been wrong on this. So I was expecting ETH to put in a bottom already here relative to BTC, which we didn't see. Historical pattern suggests that another kind of three to six months wouldn't be surprising. I mean, as it relates to the ETF, they just launched a little over a month ago and the whole story has been the unwind of the grayscale ARB trade.
So I don't think we've actually had a chance to see one, is there any institutional adoption of ETH. I think we really need another four or five months to, determine that. But I tend to like, look, I'm a bit of a contrarian, but I tend to like when sentiment is so poor.
ETH has a narrative issue right now. There's plenty of infighting. There's plenty of competition. There's plenty of reasons to be bearish, but the story is really just getting started. I mean, it's an asset that's eight years old. There's a lot of seeing in the dark that's required in terms of, "Hey, could something useful really be built on top of this thing? How are we going to use it? Where's the value going to accrue? Are L2s cannibalizing the value of the L1?"
There's a lot of questions that are tough right now, but to me fundamental thesis is still there. It's still 15 percent of the overall market. It's the number two asset without anything even coming close to challenging it after Bitcoin. And with sentiment being so down in the dumps, I really like ETH here just as a contrarian play. So I know I've been early and wrong on that call, but I do expect ETH to perform well over the next six months.
Especially so for we talked about financial conditions easing. If we're going into a risk on environment, traditionally that's the type of environment where ETH and altcoins outperform relative to Bitcoin. So I actually personally think the Bitcoin dominance ratio is going to top out here around 60%.
And if you go back that chart that you had pulled up with BTC dominance, it actually looks like even though it's been really strong, and Bitcoin has been really strong and impressive, it actually looks like over time - yes, maybe it's breaking out relative to that blue line - but it is a series of lower highs. On your chart, the kind of 2016 high, is higher than the 2021 high. And if we were to stall out, anywhere from between here and 70, 75% we'd put in a lower high again.
So what we see is the market actually diversifying from Bitcoin being kind of the only show in town. And it also doesn't feel that way right now. So I like the way those two things connect. Cause right now it feels like Bitcoin's the obvious trade, and I think it could be actually just the opposite of that. So I kind of like taking the other side.
Gerbz: Yeah, I do too. And you're right. Obviously, for a while, Bitcoin was at 99 percent because we had Dogecoin and Litecoin in the mix for a second. Around here, 2017, that's when Ethereum hit the market. We topped out last cycle, this is 2019, at 75%. So like 25 percent was the top of Bitcoin dominance at that point.
Now we're at 60. It's like, it went down 25%. It went down 15%. Maybe it'll keep doing that. And it makes sense as literally thousands of new projects come into the scene and they're all getting thrown into this dominance metric that we've got here.
Talking ETH again, I noticed on one of my charts here that I also had the trillion dollar market cap for ETH somewhere where to go, boom. It's around $8,300.
I've talked about this before that ETH is always kind of one cycle behind Bitcoin. We've noticed that it kind of trades that way. And so if last cycle was Bitcoin trying to decide whether it wanted to be a trillion dollar asset, that's what Ethereum could do this cycle. It's just a theory, but it could, that's how it could go down.
The $8,000 ish level is where Ethereum is a trillion. So can it spike way above it and drop way below it? Sure. But is it gonna test that level, this cycle? That's what I'm looking to see happen. And it kind of makes sense. It's about a double from the previous cycle top. Which isn't much, especially in ETH land, especially looking back to ripping last cycle from $120 to $5,000. That was like, meteoric.
I don't think we're going to see something like that again for ETH because there's just so many L1 competitors now. And that wasn't necessarily the case. Or actually, that's not true. That wasn't the case back in the 2017 cycle. ETH was the only L1.
But last cycle we had plenty of them and we still got this major rip. So, hey, anything's possible. But a trillion dollars is at $8,300. So I wanted to throw that up there.
Brian: Love that look. That's a fascinating chart.
[00:15:36] Total Crypto Market Cap
Gerbz: So that's Bitcoin and ETH. the other one I like is, I don't know if you ever pull this up, but this is total crypto market cap. This is including Bitcoin and ETH. And I just noticed that it didn't break, we have not broken out of the previous cycle top. Obviously Bitcoin has. Ethereum hasn't, but all of crypto itself, the whole crypto market still hasn't.
And that's obviously going to be a moment. When that happens, we saw what happened here when the 2018 cycle top was here at $750 billion? And then, when we broke out of that, we talk about how there's kind of two sections to the bull market. Like, there's working towards the previous all time high and then there's the blue sky that happens above the previous all time high. That's like the first half and the second half of the bull market.
Here's that second half that occurred. Yeah, I just like noticing that we haven't even broken out yet. So that hasn't begun. People who think this sort of second half has started already, I don't know. And was this kind of run that we had through last year, was that the first half or are we just barely getting started here? It's hard to know. Sentiment has been choppy, to say the least, lately.
I have one more Bitcoin chart here that I love throwing up, This is another Peter Brandt thing that I talk about all the time. He has discovered that, from the bottom of this last cycle until the halving, if you calculate the number of days that takes, leads exactly to the time of the halving to the top of the next cycle.
So if that was a little confusing, you can see here on the chart very clearly that the bottom in 2012 until the halving was 364 days, which is almost exactly a year, which is wild. 364 days from the halving until the top. Was literally the exact top, like to the week. And we use a weekly chart for this.
The next thing, same exact thing happened. 77 weeks, 77 weeks till the top. And then here we are the bottom of the last cycle that we just had, so this is coming into right now. This is how we're going to calculate when the top could be for the cycle. 74 weeks from the bottom until the halving, 74 weeks from now puts us in September of next year or early October of next year.
So it's another one of these, is it causation or correlation? No one knows, but it's repeating. And why break a repeating pattern? unless you have to,
Brian: That's fascinating. Yeah, yeah. I mean, it's interesting.
Gerbz: It's too spot on, yeah.
Brian: Just how it lines up also with your, you know, having an election cycle getting us to like September, October of '25, which is interesting how those two line up.