Gareth Soloway Talks Bitcoin's Next Price Target of $12K, Fed QT QE, Inflation, & Stocks - Transcripts

June 23, 2022

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Gareth Soloway provides Bitcoin analysis and discusses BTC's next price target of $12,000. We also discuss the stock market and stocks he is looking to take a position in as well as the Fed and when Quantitative Tightening stops and Easing starts...

Transcript

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So definitely check them out. It's once again the opportunity to double dip just like the Vcs, just like the hedge funds. Check out link to link in the description. Welcome back to the thinking crypto podcast. Your home for Cryptocurrency news and interviews with me. Today is Gareth Soloway who is no stranger to the show and Gareth is uh, the season at crypto trader and stock trader at verified investing. Crypto dot com and in the money stocks dot com, Gareth, great to have you back on. Hey thanks so much for having me. It's always a pleasure to talk. Well Gareth, you made the epic call for Bitcoin at 20 K to, to the anger of many bulls back months ago, but you're spot on. So I would love for you to give us the state of the Union. We've hit 20K.

We went below it. We're currently hovering around there. What are you seeing and what is your next move? Yeah. So what a drop it's been, I mean, again, you know, there was so much bullish sentiment when we were at that 65 69,000 level back in october november. And, and for for newer investors, I want you guys to always remember when everyone is clamoring and kind of just shouting about how great something is. It's usually just about to top out. So you have to start thinking contrarian and not getting caught up in the hype and the same thing goes on the downside. You know, when everyone is hating something and saying, oh, it's never gonna survive. For instance, we saw that in 2018 and early 2019 in crypto where people started to doubt it. Bitcoin got down to 3500 or so and you saw a lot of that same kind of bearish sentiment, overly bearish, panicking fear and that was the time to buy. So always remember that going forward.

Now if we bring up the charts here, let's take a look at the charts on Bitcoin. We have come down to this 20th K level, which was the previous high from 2019, there were a lot of people that said it will never go here because it's never gone to a previous high pivot of a past cycle. The reason I thought it would number one if we are in a bear market, which every four years apparently it is. And this is again proof that this is a bear market with this much downside in Bitcoin, Every bear market we've seen 80-85% correction, which actually means that Bitcoin could go even a little bit lower now 20,000, my high end target has been achieved. I do think that you should get some sort of bigger bounce here right now. It's back above that 20 area, it's going sideways. I'm still in the camp that you could trade back to about 25,000, which would be this pivot low from the terra luna collapsed and maybe just maybe even back to 28 5 28 7, which is this low area right here. But ultimately, you know, when I look at the way it is and we talked about bearer sentiment and bullish sentiment, you still don't see panicking yet in Bitcoin. Yes. You see a lot of people under pressure hurting because of the massive losses they're sustaining, but they're not ready to throw in the towel and throwing in the towel is absolutely key. Or at least that mentality of like throwing up your hands in the air and saying, you know, this isn't working out, this is never gonna work out. I give up.

That's what we need to see. We haven't achieved that yet. Nor have we achieved 80-85% downside From 69,000. Now, that gives us a target around 12,000, which is my next target. So after a near-term bounce here, I think we roll over again and you break this level and you're gonna head down and I'll do some trend lines on here To this area right in here, so right around this 12,000 area, huge, huge support here you can see this pivot and this area right here, so that will be your secondary target. I do hope that that's the low, I don't know for sure if it will be the low but hopefully it is um I am in the accumulation zone so anything below 20 as it drops, I'm slowly starting to accumulate a hot old position, meaning that up until this point I've been swing trading it, I go long at pivot support, short of pivot, pivot resistance and kind of back and forth and that's how you make great money in a bear market eventually I'm a huge bull on Bitcoin so I think it's going to go to 100,500 etcetera. So I do want to start to accumulate down in this range. So I started a little bit at 19,000 about a 1/6 position. And what that means is that I take the amount in total that I want to buy a Bitcoin. So in my head I think alright well do I want half a million in Bitcoin, what do I want? And then I divide it into 66 amounts and I started putting that 1st 6th of of the amount in Bitcoin at 19,000 I'll probably do every 2 to 3000 below that, I'll add another 16 and this allows me to dollar cost average. So, you know, I'm clearly, I know what I'm talking about when it comes to charts, but I certainly don't know the exact low on Bitcoin, so I'm not even gonna try to guess it.

Instead, I do dollar cost averaging and slowly accumulate and then wait for that next bull market to take place, which I do think it will. So again, 12,000 is your next target. There's a bunch of cool things that I can show you here on the chart of why that makes sense. If you take a look at this high right here, okay, And then you take this low and the reason I'm noting this high in this low because this was basically a straight fall, you had small bounces, but this was pretty much a direct move down and then you had this three months of consolidation. If you take this high, Alright, so basically take this distance from here to here and if you take the same distance and do what's called a measured move, it also gives you 12,000 which gives you that target. So basically you have this kind of interim period right here and then on either side you have The downside this distance Equalling this distance. So there's a bunch of cool things that kind of match up around 12,000. Um I also think it's important for investors to kind of understand that in the dot com bubble and when it collapsed and I really do like in what's going on in crypto to the dot com bubble is that you saw many, many crypto or many many dot coms go out of business. We've started to see that we've seen terra luna, the U. S. T. Kind of be be gone or, or go bust Celsius is kind of a signal, but there needs to be more of that.

And so for me, I'm focusing on the best of breed here. I'm looking at Bitcoin and ethereum. Those are the ones that I feel comfortable holding for the longer term. I'm not sold yet on Solana avalanche, you know, ripple any of these other ones because I just don't know yet and I don't want to take that risk. So the for the swing trading side sure I'm in Selena right now, I'm in avalanche right now for this bounce but not as a hostile position and that's more of a safety thing. I just don't feel comfortable putting my money at risk when you see the potential of kind of this bloodbath with so many kryptos potentially going out of business. So, so that's the summarize, sorry, it was long, but that was the summarize kind of where I'm at, on, on the Bitcoin and crypto markets. Um, no, that's great advice and great perspective. Um, excuse me, I've been also accumulating below 20 K. For Bitcoin and you know, you mentioned there could be like a relief rally up to 25 or 28 K. And then we could, you know, go down further and then in the catalyst could be like you said, maybe a Celsius collapse or just macroeconomic factors with the Fed and so forth. Yeah, that's exactly what I expect.

I think that you'll see this culmination for those of you guys that were around in 2008, 1 of the key things that kind of started the final collapse on the stock market was the Lehman Brothers collapse. Right? So it was this epic kind of banking collapse and that kind of began our last flush down before the markets bottomed in March of 2000 and nine. So you do want to see that type of thing. Um, if you go back to the dot coms, you know, if you look at a stock like amazon, one of the craziest things and I think we talked about this the last time we talked was that the pattern in amazon, it looks identical to Bitcoin's pattern when it topped this anti pattern. And and and amazon actually dropped from about 100 and $10 down to about 7 to $6. So I mean That's a huge, I mean basically you're talking 95% downside there on that. I don't know if Bitcoin will do that. The fact that it's a stated run of 21 million. The fact that you have more adoption all the time may keep it from doing a full 95% drop. But there there you have to as an investor, you know, if you're a pro investor you look at all angles, you never kind of hide your head in the sand and say, oh well I don't want to think about that. You have to, you know, you're dealing with real dollars and real cents here and you have to be always ready for anything.

So, so that's one of the reasons why I've kind of spaced out my buys. You know, you might say, well if you're looking, if you think the low is going to be 12,000, well then that doesn't make sense to buy every 3000 down from 1919 16, 13 and then all of a sudden you're at 10 and the key is is that as a trader, I've learned lessons the hard way, which is things go below where you think they're going to go and they go much higher than you think you're gonna, they're gonna go. Um, so you have to be prepared for that. And I always want to be prepared Rather than the, all of a sudden saying, Oh darn, I'm all in on Bitcoin and it's now 50% lower where my average is, you know, I don't want to be in that position. Now the current market conditions for stocks and crypto and obviously real estate is about to start tumbling as well. Um Is a lot a lot of it's based on what the Fed is doing and obviously there's a high correlation between crypto and the stock market. Um And a lot of people are looking at okay Q. T. And and rates going up do you? When do you foresee? And then this is a hard question the Fed reversing and then things start to move back up again. Yeah I think I think the Fed by this the end of this year will no longer be talking about rate hikes and might even be you might even start sensing that in 2023 early 2023 you could see some cuts and again I know that sounds crazy with inflation where it is but I really do think, I mean we've we've already seen just in the last week Oil has fallen from basically $124 to about $100 and $402 per barrel.

That's already a big drop now it's gonna take some time for that to filter into inflation numbers and bring inflation numbers down. But I actually think oil is going much much lower. And also the key is gonna be it's not just the inflation side. What the Fed is doing is aggressively tightening. They're they're reducing their balance sheet. They're raising interest rates, they've stopped all printing of money that has been going into the system and the economy is starting to kind of go into a little bit of a shock now. You don't see it yet because it takes some time to go. But you add an inflation and the impact on on average people because of higher oil and and gas and and food prices and there is definitely a pullback that could push us into a recession. So I think that inflation will likely come down to a 4 to 5% handle, which is still way above the 2% mandate that they wanted at. But that when you look at 4 to 5% inflation and then if you think a recession could hit and unemployment could go to 789 10%. Which one do you think the Fed is going to care more about? And the answer is that absolutely care about 10% Unemployment if there's only 4-5% inflation and they'll attack that.

The only way the Fed knows how to do that is by lowering rates and printing money. So that to me could be where Bitcoin bottoms out late this year, maybe in early 2023 as you start to see this kind of recession hit. Yeah. Yeah, that absolutely makes sense. I think it's a lot more pain ahead this year but great buying the dip opportunity or buying the lows, um, you know from the stock perspective are you taking any positions on the different stocks and what's happening with the lower valuations now. Yeah. So I think there are some intriguing opportunities. I mean the tech stocks were beaten down in the last week. They've bounced quite nicely. I do have some stocks that I'm kind of dying here and I can bring on my chart and kind of just show you and explain my ideas. So what I do in this type of environment where I still think there's more stock market downside, right? So if we go to the S.

And P. 500 yes, we've come in pretty nicely here, but we're not even back to this line here, which is your pre covid highs. So at a bare minimum this year we're gonna go there. I'd be shocked if we didn't. Now, if we start to see a recession later this year, then you then, you know earnings are gonna fall dramatically. Then you see the market's going probably way below that. But I think the key is look for quality that's already trading at a steep discount. So for instance, one of the companies that I've been eyeing is like an IBM. Right, So IBM hasn't, I mean you have to go back to 2000 and 12 and 2013. This is the weekly chart before that was the last time, this was at a high, right? So this has had a long period of consolidation and it looks to me like it's just starting to potentially break out. In addition this is a company that makes a lot of money pays a high dividend, their their pe ratio is relatively low.

So the chart you use, the chart is the primary source seem to break out. But then I also like to use the fundamentals to kind of in a bear market at least say, okay at least this company makes money at least it's been around for, you know, decades and decades and decades and so therefore there's probably some value. Maybe I can find some protection in that name. Another one I kind of like it's a little riskier in my opinion, but it's the new formed company of Warner brothers Discovery. And the reason why I like this one is first of all, it's trading at a forward P. E. Of about seven. Right? So seven p. You know when you when you're dealing with tech stocks like Tesla that are at still at like 50 pes, this is some this is a name where I'm like okay this makes sense. In addition Game of Thrones comes out later this year, I think in august so there might be some new subscriptions that they get based on that, that the hype around the new game of Thrones. Um and things like that.

So the low pe the chart is extremely discounted here. You know, just going back to when the merger occurred between a T. And t spun off, Warner Warner media going into discovery and they joined forces. But again, it makes sense to me, you know, not to say this can't go down to $12 or $10 but there's a value there, that's fundamental. Plus a technical oversold signal. They're signaling a rally. So again, you know, you have to be a very careful stock picker in this market. It's a market that's a bear market. So it's a sell the rip type market. But I do think there are still opportunities out there. You just have to do a little bit of homework. Now, the service that you offer with your obviously respective stock and crypto websites, um, do you provide trading advice or kind of like this, what stocks and what Kryptos you're looking at and positions you're taken?

Yeah, that's exactly what I do. So I give out all the trade signals, like when I find a great setup, I put it out, I say, I say, hey guys, this is a great entry price right here, let's let's pick this up and we go from there and, and for instance, you know, we were, I'm proud of this too. It's like, so everyone, if you turned on like CNBC or any of these, these media or even went online, everyone was like bullish on oil, right? So, so bullish on oil. And I'm looking at the chart and all I'm seeing is like a massive short signal, right? And so we were shorting oil recently and oil obviously just took a big dump in the last week and we made some great money and I just want to show you this is that if you look at this trend line here and this trend line here, I mean look at what you're hitting right up here, right, coming into this double top. Yet the media was constantly talking about how energy was the place to be. Energy was was the safe haven. And then all of a sudden oil goes from $124 high right here and it just hit today, 100 and below 100 and two. And by the way, look at this trend line, look at where the low today was. And look at what it hit. And so these charts really do guide you more than any of this nonsense hype out there.

And I was even, I was even some surmising that as you were going up, notice how you had this big pop when Russia invaded Ukraine, it went to $130 a barrel, then retrace them up. And then look at how long it's taken to get back to this high. And when it takes, when a chart takes a long, long time to get back to a high. It's especially when the media is telling this retail investor to buy Buy Buy, buy buy that is telling you that big money is selling into it, right? Because if big money wasn't selling here and you had this crazy hype, this thing should be, I mean oil should be at 100 and $50 it should have been 100 and 75. So those are the little things that you pay attention to it as you start to learn how to read charts and it's very, very cool. It puts you kind of in a contrarian to a lot of this, this media hype and what the analysts are saying and everyone looks to analysts and says, oh, these guys know what they're doing. They're not a whole lot better than the retail crowd. I'm just, just to be honest with you guys, they're really not chart reading is the purest form of honesty you're ever gonna find, if you can learn how to read the charts, you're gonna be in such a better position, You're absolutely right. And I just think about the memes that have been formed around Jim Cramer 22 To do the opposite of what he says because he's feeding the herd right? And like you said, you want to have that contrarian view. So you're absolutely right.

Um, final question here, any tips for, you know, the newbies who are experiencing maybe their first bear market with potential recession plus inflation. This is a bit different than 2018, Absolutely. So, so a few things I would say number one is, you're not alone. Um, as as far as I've come in the last 20 years, I made every mistake in the book in my early years of trading, right? So so I did the same thing I bought it highs because everyone was talking it up, I sold at Lowe's because everyone was panicking. So it made me panic. So, so the best thing you can do is learn from this, right? So it's a matter of, of using a bear market to recognize that we're not all geniuses in the market, which is okay because that self realization allows us to say, okay, I need to learn and learning every little thing you learn changes the forward trajectory of your financial future. And I'm serious about that because I'm continually learning today. And like initially we're all like in a downslope, we're all losing money as investors over time, you know? Yeah, we have our great moves in bull markets because everyone's a genius in a bull market, but it's, it's in the bear markets where truth really shows itself. And so what you wanna do is as you educate your line starts to come flatter and flatter and then it starts to incline and the key is you just want to keep on absorbing as much good quality information as you can because that line over the course of your life just goes like this in terms of your financial gains.

And so education is so important again, I think people kind of laugh at education and bull markets because you close your eyes and you throw a dart at the board and you make lots of money, but it's, it's this market that can you make money in a bear market, that really shows the truth, Yeah, that's great advice, I've personally experienced that learning as much as I could after the 2017 run up and then going through 2018, and um, studying the charts like you said, and paying attention and not listening to financial advice on tv and I'll say, I'll say one thing is that this day and age, it's even harder for retail investors because social media has been so pervasive and it's, it's kind of hype, so you get influencers out there that are just like, oh Bitcoin's going to a million and for a newbie, they're like, oh well I'm going to jump on board, you have to understand that a lot of these lot of influencers don't know a whole lot, they're just there because, you know, it gets them more buzz and it gets them more, so really, you know, be aware of that, you have to fight off the urge is, you know, basically you have to learn how to control your emotions once you can learn to control your emotions, things become much clearer Yeah, absolutely Gareth, always a pleasure, thank you for the great advice and thank you for joining me today, thank you so much, it's been great to be

here.

Mhm

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