Pain Is The Route To Gain
It seems it’s only in the depths of fear that crypto traders suddenly face the dawn of realisation that the market is, in fact, incredibly risky and valued entirely on speculation. All of the utility, narratives, individuality, partnerships and “disruption” are quickly swept away once the house of cards begins to collapse in perfect symmetry.
This wake-up call, of course, only ever materialises when the market stops moving in an upward-only direction. During the phases of the market when upwards is the only direction, you, of course, will be told that any risks of going down are bearish. You’ll probably be called sidelined as well for good measure. People will ask you to “believe in something”, whilst losing all belief and faith themselves when the market no longer offers an easy path to faith.
Whilst it’s a battlefield of many frontiers, this is what makes crypto such a unique and beautiful market. The returns far outperform any other sector, as long as you position at the right time and place, of course. Gains of such proportions do not come without additional elevated risks, of course, which other markets cater towards with less volatility and better protection.
Pick your poison.
Volatility and manipulation can be viewed as a blessing or a curse. Yet, without these 2 ingredients, crypto wouldn’t be crypto, and the opportunities to make money far beyond what traditional markets offer wouldn’t be available. It’s a requirement to fuel the market-generated fire. Volatility and manipulation are opportunities. Your goal as a crypto trader and investor is to understand that these two ingredients will either be weaponised against you, which you’ve weaponised against yourself, or provide the foundations to reach newfound levels of wealth.
When it comes to amassing wealth from the market, it’s done so by positioning yourself during periods where it’s sickeningly uncomfortable. It feels wrong to pull the trigger because the directional movement of the candles is moving against the direction you desire the market to shift towards eventually. As each dip in lower flows, you find yourself in a state of heightened emotions as you watch the portfolio and assets slowly diminish. Trying to find calmness, clarity, logic, and rationale in these moments is what makes trading one of the easiest yet most difficult ways possible to make money. The concept of successful trading is the easy part; sticking to the idea ourselves is where it becomes incredibly complex.
The more invested you are, the harder it becomes to acquire a thorough understanding of the market, as each fluctuation digs itself deeper and deeper into your emotional response system. At this time, when the market is trading, you can begin to see evidence of just how deeply many are invested, at likely the very wrong prices.
From my personal observation, this is the worst sentiment I have seen since the likes of FTX and COVID, with little warranting the panic beyond a modest correction. Unlike previous periods in the market when fear was this heavily heightened, we do not have the usual fundamental justifications or geopolitical chaos to pair with, which suggests the fear stems directly from the movements alone. This is, of course, explainable by the reality that the majority of the downside moves from all-time highs predominantly took place in the span of a single monthly candle. As most didn’t financially or mentally prepare for such an event, their entire perception of the market dynamics has shifted in accordance with the current movements, completely losing focus on the bigger picture in the process.
The market is an incredibly intelligent organism. It can shift how you think, feel, and behave through mere shapes generated at intervals of seconds, minutes, hours, days, weeks, and months. The recent collapse from all-time highs has delivered the usual severity expected to shift the herd into a fixation on one particular direction, lower. Considering this took place from the $125,000 all-time high on Bitcoin, at a moment in time where no such thing seemed possible and more upside was the only perceivable alternative, with an understanding of this, we can begin to see how the markets deploy such intelligent levels of deception, as prior to the crash the fixation was only in one particular direction also, higher.
There’s a key rule with the markets.
A top never looks like a top.
A bottom never looks like a bottom.
Around the $120,000 mark, I started ringing the alarm bells and sharing my thoughts that a significant crash is coming. What has now become quite an infamous YouTube Video, where I used a whiteboard to illustrate my thoughts and break down why I felt this crash would happen, just two days later, exactly that happened. If you click the link to the video or take a quick browse through my X Profile tweets around that time, you’ll be quite amused to see the reaction to such a prediction.
This, of course, was being projected at a time when all hope was not lost, when faith was entirely in the hands of the market, institutions, and governments, taking us to new heights. It was bold, against the herd, but it worked. Throughout this period, I wasn’t met with much support or belief. In fact, I was pretty much getting absolutely destroyed online by people hidden behind anonymous profiles, usually masked with their weird little chicken NFT picture things.
I was told that I was sidelined, delusional, bearish, stupid and much worse.
One phrase that continually emerged was to “stick to the trend” and stop being a contrarian.
Ironically, as the market now reaches $80,000 per BTC and my optimism grows, I am facing the exact same remarks regarding my belief that the tide will eventually turn.
What’s most common now is to “accept we’re in a bear market”
Maybe we are, perhaps we’re not. My eyes see what they’ve been trained to see. They will never be 100% (as much as I wish that were the case), but they rarely ever fail me when it matters most. I can understand why herd mentality is significantly less prevalent in crypto than in other markets. It’s because the onslaught of attacks when going against the herd is beyond what you would see from other trading communities. I believe that whilst most influencers are paid shills and purposely lead many astray, the majority of surrounding crypto traders find themselves influenced to view and perceive the market in accordance with what the majority of the market participants are telling them they should think and feel.
I’ll be honest, it’s not exactly comforting when what I see on the charts begins to diverge from what the majority sees. My life would be a lot easier and more peaceful if I didn’t say anything and did what I do in silence, without the additional noise from maniacs online. It’s also never comforting when I start going public with my thoughts. As humans, we’re not genetically coded to embrace things that make us uncomfortable automatically, but it’s only through combating these naturally embedded byproducts that I’ve acquired a better understanding of myself, life and the markets. In my earlier days as a teenager, it was mostly my reputation I feared I might jeopardise.
What if I was wrong?
What will everyone think of me?
How will I recover from the backlash?
Well, I'm older now. I do not care. I do not care about being wrong; I don’t care if people fail to understand my viewpoint; I don’t care to try and convince anyone otherwise; I don’t really care. I simply trade what I see, without external influence. Most of the time it works, very well. Other times, it doesn't. That's life and the markets.
The fear of being wrong is a challenge many in the public eye face when trading. If you take a glimpse online, the backlash you face online isn’t coming from the successful players in the market; it’s coming from the losers. When you understand that being wrong is completely fine, losing is completely fine, and most importantly, that individuality of thought is compulsory, you really stop caring about anything, as it’s all meaningless. More importantly, even if you were to be 100% accurate, people would still find a way to complain, ridicule or find flaws even if they were not present. That’s just human nature and the state of the world, unfortunately.
However, I've discovered a hidden beauty in being vocal online. For the slight chance that a minority paid attention and were saved, that alone makes the abuse worthwhile. It does, however, provide an additional benefit.
I’ve realised over the years that the severity of the backlash, voices, and opinions is usually correlated with where major turning points in the market are beginning to take place. The problem is that they will not happen immediately and can often stretch that little bit further before the storm ends and the sunshine starts to emerge. The severity of the voices is correlated with the extent to which people have invested in the market.
When the market is piercing the skies, and everyone goes all-in, they’re not willing to perceive the downside because their personal decisions within the market do not reflect this. It would be hard to find someone buying all the way up to the all-time highs who has a simple conversation with you and says, “Yes, we’re definitely going lower.” Otherwise, they wouldn’t be buying the top in the first place. When they begin to round-trip, and the market sweeps all those dreams away, it’s equally as unlikely you will see those people support the idea of a recovery, because the candles and their portfolio do not currently reflect what is taking place in the present.
This is the reality of cryptocurrencies. It’s one, never-ending wild rollercoaster ride. Every carriage is packed, everyone’s pockets are filled for the journey, yet few ever get off. They stay on for the entire ride, up and down, whilst arguing with each other over which loop, twist, or turn is coming next. Most participants are essentially imprisoned in a cell of their own making.
Taking this all into consideration, there’s one thing I really wanted to see achieved with the crash from all-time highs:
Turn the optimism of the bull market into the complete faith that we’re now in a bear market.
I think it’s safe to say this has now successfully been achieved.
As we now reach these spiralling lows, with little pullback, the market is reinforcing the idea that we’re entering a phase of sudden destruction, with little hope of a recovery in sight. More importantly, during such phases, the market cleverly deceives most into believing in a recovery that actually begins to take place. Even more importantly, it is during these periods that the most profitable buying areas begin to emerge, because prices enter a territory where buying seems like the most psychopathic action.
As the market grows stronger each cycle and new heights are achieved, the corresponding corrections will inevitably grow larger, giving the illusion that the severity is worse than it actually is.
The size and colour of the candle are deceptive tricks deployed by the market. You must not look at the candle itself, but more so at where the candle has gone. The TOTAL Market Cap Chart is the definitive voice of the entire crypto market. It does not matter where anything else goes; if TOTAL remains in bullish structure, then the market as a whole remains bullish.
Over the years, I have used the TOTAL chart as the foundation for understanding what may truly be happening in the market, and it has been one of the factors that helped me combat heightened emotions when everything seemed on the cusp of death.
When looking at the TOTAL chart. We can see the inner bullish structure remains in play. The previous candle's close in November rejected the bullish TL for the 3rd retest and closed back above it. December has started with a downside move. This is often what is necessary to:
- Print the monthly low early
- Retest and confirm the validity of the TL/support before continuing higher
- Allow the remainder of the month to open the doors for a reversal
- Create initial panic (reinforcing the sentiment and fear of lower)
- Liquidate more longs
- Create more capitulation
You want to allow breathing space between 2.5T and 2.6T for any additional squeezes throughout the month.
If TOTAL breaks the bullish structure, then we can warrant some actual panic.
This is what to expect if we invalidate and collapse. Whilst it's easy to understand where the market would go if this inner channel is invalidated, I cannot see how the market suddenly dies right now, and everything (most alts) goes to zero for no reason. Often, in circumstances like this, the obvious play can be the wrong play, especially when everyone else is seeing it. I'm not saying it can't happen, as it definitely can, and I know where to look if I'm wrong. I just don't think it will.
Pretty simple stuff. I'm placing my bets on the opposite side = 5T - 6T.
I frequently receive messages that I "cover both sides to avoid being wrong".
Whilst I indeed cover both sides, it's not to avoid being wrong, it's because I am not stupid and need to know where to look in the event I am wrong, so I do not end up like the herd on the rollercoaster.
Whilst this worst-case scenario is plausible and relatively clean to the eye, I believe the overall boundary of the worst-case scenario is complete, give or take another cheeky monthly low wipe for good measure, which wouldn't be anywhere outside the depths of regular crypto mania prior to a reversal.
The final point to touch upon is the cruciality of these higher timeframes such as the Monthly when the market is making swings in the boundaries tens of percent.
Rule of thumb:
- Candles are shape-shifting entities.
- How the monthly opens is not necessarily a dictation of how it will close.
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How it closes doesn't necessarily dictate that it will continue in the direction of closure.
- Monthly candles initial move has a higher probability of creating a wick
- The initial direction of the monthly open at key regions of support/resistance is often false, see below.
Maybe I am wrong. I most certainly will not argue that I am delusional.
That delusion has allowed me to reach great places in life.
I would like to believe this is another one of those times arising.
We cannot control this market. We can never be 100% percent. All we can do is use the tools at our disposal to make the best possible prediction and act on it.
One thing I do know... is that pain in the markets is often the best route to gain.