The Twitter space, the Instagram space, 90 percent of the people who are posting on there don’t know how to trade anyway. I could see twenty thousand on Bitcoin by January this year. If you put your money on the line and then you can’t ride it, then what good is that? What’s up, everyone? Today I’m excited to announce that I’ll be joined by two legendary English traders, Alessio Rastani and Charlie Burton. Alessio is probably best known for his viral 2011 interview on BBC News. ‘The governments don’t rule the world. Goldman Sachs rules the world’. And Charlie was also featured by the BBC in a 2014 documentary called Millions by the Minute. One of the biggest things that most traders get wrong is, is a lack of discipline. Before we get to the interview, let’s take a quick look at how Adex is using blockchain to change the game of advertising. Ad tech startup Adex Network is making waves within the blockchain and ADTECH industries. The private beta of the decentralized advertising platform launched just a few months ago, but it is already serving millions of impressions. Adex helps brands and publishers reduce the impact of ad fraud by providing them with transparent, verifiable reporting. The platform eliminates middlemen and enables payments for comparable traffic only. All this by remaining 100 percent privacy focused and collecting no data about end users. The platform is now invite only, but it is expected to open for the general public soon. Visit www.adex.network for more information. How are you guys doing today? Good. Thanks for having us on. Yeah. Yeah. Very good. Thank you. Let’s see what else you got to say here. Yeah. Thanks for coming on. Really appreciate it. So as you know, Bitcoin’s been kind of steadily consolidating since its latest big move on October 25th. Could you give us an idea of what you think is going to be the next move for Bitcoin? And when do you think that move will happen? Either of you can can take this question. Well, I guess I can start off. Again, thanks for having us on. Basically today as we’re making this video, in fact, Bitcoin has sort of dropped further, presumably to fill that gap that it formed after the massive spike high in October. I said before that my view still hasn’t really changed. Essentially, I believe that the rally we saw back in October, I consider that as an impulsive rally. In other words, I consider that as not a correction to the previous drop, but more as potentially the beginning of a potentially start of a new trend to the upside. So I think this is just retracing filling the gap. And I’m looking to find basically if this if this is the bottom on Bitcoin, which again, I still think this could be a bottom here on Bitcoin, the bounce that we saw. If this is a bottom, which is my view. Then it needs to hold support at eighty seven hundred eighty four hundred. If Bitcoin closes the week we look at twenty one moving average twenty one weekly average, which is about 9K I think bitcoin maybe in a bit of trouble there because that usually results in further losses, further drops down as long as we hold the October lows and as long as we can keep above the eighty seven hundred eighty four hundred. 87 to 84 hundred is really my line in the sand. As long as we can hold above those support, as long as the bulls buyers can protect those levels, I still think there’s a chance here that we could see, you know, this rally continuing further higher. In other words, we could potentially see further gains in the weeks ahead. What do you think about that analysis, Charlie? Ok. Can I share a screen? Yeah, go ahead. OK, go into my other analysis in a moment. But I’ve got a trend line on here, as you can see very clearly across the top tier. It’s just a daily chart and we keep reacting to that trend line at the moment. Like Alessio has been saying 84 hundred 84 hundred comes in with all these triad little cluster price action down here. So I can see the the the bitcoin could want to come down into that zone and then we would want to see it hold. And really a breakout of that trend line would be quite a nice key break for Bitcoin. So that is something which I think is quite important as far as the weekly charts concerned though, the weekly is already below the weekly twenty twenty one is Mike twenty on here. So I’m not too worried about that. We broke that one a month or two months ago. But overall the bottom line is looking at these charts like this. What’s the overall thing. The overall thing is that certainly since the beginning of the year we had this fantastic run and then we’ve done a pullback. Look at the weekly charts, monthly charts. This is still a bullish market. It’s just being in a bit of a pullback since it made the highs in the summer. So, Alessio, on your YouTube channel. I’ve seen that you’ve been talking about something called the Wild Card Theory. Could you just quickly explain what exactly that is and what you think the chances are of it actually happening? Yeah. The wild card just simply means this. The correction on Bitcoin off the highs of near near fourteen thousand thirty thirteen thousand eight hundred. We’re gonna be much more deeper below the twenty one weekly average when to plunge below that going below going nearly eight thousand to seven thousand level, maybe even down to six thousand. But essentially I was looking for eight thousand seven thousand regions and the reason I was expecting that is because I believe that the wild card simply means that it was going to make people think, oh well, it’s gonna go drop significantly lower. In other words, people have to turn bearish or at the turn to become for to become a bottom in a contrarian thinking. In other words, what I was saying was we need to wipe out and take out take out a lot of bulls. Bulls need to be taken out. The sentiment needs to get bearish again. People need to start thinking negative, which actually happened recently. People were calling for lower and lower figures recently back in October I remember. And we need to see that kind of sentiment changing, becoming bearish with people, with the public and then moving to the eight thousand seven thousand region and then finding a bottom there and a bounce and major bounce. I was looking for wave one and two, wave one and two to being the corrective wave to complete and starting the wave three. If this is the wildcard scenario, then we should start wave three, the major bigger wave three towards twenty thirty fifty thousand soon if we haven’t already started it. I think I think as long as we hold the October lows, as long as the October lows hold, this could be the start of the larger wave 3. How do you feel about this wild card theory Charlie since you don’t really believe in the Elliott wave theory as much. It’s not necessarily naive. I just don’t use it. There’s so many different ways to trade the markets. It’s just not the way that I trade. But generally speaking, the way that I’ve been looking at bitcoin is from from a long term sentiment perspective. Bring up the charts again. Is that yes, we have that huge run into in 2017. And that’s that was a big flag for me when my builder came round and asked me if he should be investing into bitcoin. And I knew that we were in a bubble at that point. I think we were probably about ten thousand dollars at that point. And so that was a concern to me. When the masses start to get involved and want to invest into something like bitcoin, then you know, you’ve got to stay away because the masses are uneducated as far as trading is concerned. And so what happened over last year was a good thing. And it did sweep a lot of people out of the market because a lot of people who were certainly the less educated in investing into cryptocurrencies would’ve probably just thrown in the towel. And I think we needed that. We needed to go quiet, which it did happen. And then obviously we had this big run earlier this year, which would have retempted people back in and then we’ve had this pullback over the last few months. Well, I disagree. I think we need another period of consolidation, basically a continuation of what we’re seeing at the moment. So possibly for another year or more, I’m not necessarily looking. I’m bullish on on this chart. I’m long term bullish, but I’m not necessarily saying that I think that Bitcoin is going to go straight up from here or if it does pull back down to eight thousand seven. Don’t get me wrong, I think there are great buying opportunities if you’re a longer term investor. But I see that we could run back up to 12000 and then we could pull back again. We could enter a range which would be enough to pull the masses. Then they’ll end up just not being interested. But actually, what’s happening, if is building that range, at some point it will break that range and then the masses won’t be on board, which is what the market will most needs. I think it’s more likely going to consolidate maybe for a year, maybe a bit longer. You’ll go up a bit. It will pull back. It’ll keep on trying to put off the masses. So where do you expect to see bitcoin by the end of this year? Because I know, Charlie, before you’re saying you’d like to see some long term consolidation, are you expecting it to be sort of in the same range that it’s in now? Yeah. I mean, I have an interesting point of view on this. Well, I say it’s interesting, but we’ll decide what the public thinks about this. Let’s say Bitcoin goes above 10000 in the next few weeks and close above 10000. I think there is a very high probability by December or January, we could see twenty thousand at least fifteen to twenty thousand range. But I would need for that. I would need bitcoin to hold above the October lows of seventy three hundred and then take out the 10000 level. If I can’t do that in the next couple of weeks, which is possible then because seasonality of bitcoin. Bitcoin is seasonally strong. If you look at the historically the seasonal patterns on bitcoin, the strongest periods for bitcoin is between November, sorry, between October to December. Now last year was an exception. I’ll take I’ll take that. But again, the majority of the time. Probability wise, seasonally it’s strong between October to December. Therefore, as long as what I just said holds, we hold above if we hold above the October lows and take out ten thousand the next couple of weeks, then yes, I could see twenty thousand on bitcoin by January this year. In a number of your recent videos, Allessio, you mentioned how you think that there’s going to be a recession coming in the next 10 to 12 months or so. What do you think about that assessment, Charlie? And what do you think recessions effect will have on Bitcoin? Okay. There’s been a slight global slowing, a slowing of the global economy. And there are a number of factors at play. Brexit being one, trade wars, dispute between the US, Donald Trump and the rest of the world. And so these are factors that we don’t know 100 percent how they’re going to play out. Now, in the last 24 hours, the Trump administration have been claiming that they and China so both sort of saying that they think they got a deal and they’re going to reduce the tariffs and not impose tariffs. So that could be a really positive. And we’ve seen the stock market is doing really well on the back of that. But it’s the same with Brexit. Now I’m looking more like we’re gonna get a deal. So if those events are going to play out that way, then I don’t know if we will be seeing a recession. We might still see a cooling, a continuing cooling of the global economy. But I’m not overly seeing a recession, not not within the next twelve months. Obviously, there are always going to be recessions coming at some point or other. But I’m not overly seeing that just yet, but suddenly there are there are warning signs within the global economy. The consumer certainly looks a bit stretched in certain economies. But moving on, let’s assume that we do start a recession in the next twelve months. How would I feel that would affect bitcoin? I think Bitcoin would probably benefit from that bit like gold would do. And we’ve actually seen some correlations this year, not 100 percent by any means, but correlations between the price of gold and bitcoin, whereby even this year when we’ve seen some nice little rallies in gold. Bitcoin has been benefiting as well alongside that trade war talk. When there’s been fears out there in the economy in relation to trade wars, then Bitcoin has benefited at that time like gold has. So I think if we did go into recession, I think Bitcoin would probably benefit. What’s your position on the recession, Alessio? Do you still think it’s going to happen or have you changed your stance at all? No, I am actually very confident. I understand the caution that Charlie’s making here and I totally understand where it’s coming from. However, I’m actually more confident that we’re heading towards a recession. I agree. Probably not in the next 12 months, but I think 18 in the next 18 months, very like my own actual preferred target years. 2021. A lot of people are saying is next year, 2020, I’m actually leaning towards 2021. So but who knows. But bottom line is 12 to 18 months is the kind of timeframe I’m looking for for the next recession. Number of reasons. Number one, the yield curve inversion, a lot of people saying oh because the yield curve has now gone above zero. It’s not inverted anymore. It’s actually gone above. It’s positive now. Or, everything’s okay now. Wrong. It’s actually when the yield curve goes negative and stays below negative for at least 50 days which has happened so far. And then goes above the 0 level. That’s when the the risk of a recession becomes more imminent. In fact, there was an interesting video on CNBC recently by the creator of the yield curve himself, the person who actually invented and researched this yield curve inversion. I forgot his name. And he said again, this is this is the words he used. The creator of the yield curve inversion, he said, it is code red right now for the economy. “And now we’re code red. We have an inversion effectively for two quarters. It’s really hard to ignore”. He’s basically much more bearish than I am. He said his code red. Those were the words he used. And he said we’re heading for a recession, probably the next 12, 18 months. And there’s not just the yield curve inversion. It’s also the PMI, PMI. PMI has gone below 50 now with the yield curve inversion, Fed cutting rate, the Fed cutting rates is itself out there raising rates and the Fed cutting them. If you look historically, every time the Fed has cut rates after raising them. Bad move. It’s a bad move. It’s a potentially significant sign of weakness in the economy. Maybe the China thing will the economy and the market for for a while. But I doubt for too long. I think there are deeper factors involved in China. China itself is heavily in debt. We still don’t know what’s going to happen with the Brexit and the European zone. We’ve got a U.K. election coming up in about a month’s time. Who knows what’s going to happen? The U.K. election. There’s a whole bunch of uncertainties which could easily lead us into some kind of a global uncertainty by 2021. And, you know, there is a possibility there’s something we don’t even know about yet. If we go back to 2007, 2006, there were things happening behind the scenes. Nobody had a clue yet. Only professionals like the people in the big short – they knew what was happening. Again that’s what I mean, people like you and I, Charlie as well, we look at the charts, the charts will tell you everything. One thing punches out one thing to Alessio said, though. This one thing called the presidential election. Yeah, it’s happening next year around the US administration will do everything in their minds to to stop the US economy from being in recession this time next year when we have the election. It just that the incumbent president is always going to want to be able to present economy and show that the economy is doing well even if it’s stretched. But he’s not going to want there to be a recession by this time next year when we go. When they go to the polls. So I suspect, like Alessio said, the Federal Reserve will continue to pump liquidity into the economy to try and keep it going as they will do. And the Treasury have told us that disposable as well. So I do think that post the election anything can happen. But I think between now and then, maybe some softening. But I don’t think that the U.S. It will happen for that reason. And traditionally it doesn’t. It does not. You don’t normally see big recession going into an election year. Well, I want to say about that. Charlie and I most of time agree on everything I know. And I understand where it coming from, Charlie, on this point, probably we disagree. My perspective is that because I know where you’re coming from, you’re saying that the Fed reacts to the other words, don’t fight the Fed. The Fed will do something to stave off the market. I actually think it’s the other way around. I think that the Fed reacts to the market, not market reacting to the Fed. I think it’s the carts before the horse kind of situation. I personally think that the Fed will probably try and stave off try and save the market, but it’s not going to succeed just yet. If you don’t believe me, just go back to the year 2008. The Fed tried to do its best to hold the market. It failed. Several times. It tried to intervene. It’s failed. Markets kept dropping in 2008 over and over again and happened in previous times, even in the previous recessions. Again, it is the Fed reacting to the market. The market drives what the Fed’s decision are, and that’s where we might disagree. And again, if people don’t agree with this, just go back to Alan Greenspan, who himself was the chairman of the Federal Reserve. He himself also made this point. The Fed has to respond to the market and the market drives the Fed’s decisions. So I that’s the only point probably where Charlie and I might disagree. I agree. I agree. But I’m not talking about the market. I am talking about recession. It’s two different things. Yeah. Normally, the stock market will have already going to bear market long before the economy goes into a recession. We are talking about different things here. Recession is lagging. The economic indicators are lagging behind the market. So I still don’t see there being a recession by election day next year. That’s a good point. You’re actually right. Economy lags behind the stock market. The stock market will tell us. I agree with you on that. So you mentioned that a number of times how you rely a lot on charts for making your decisions. Are there any other factors you consider when you’re trading? Do you trade the news? Or are there any other things that you look at? I’ll let Charlie go first. Well, in the short term, I am gonna feel daytrading use is important, because I could be trading the U.S. dollar against the Canadian dollar today on a day trading basis. If I hadn’t have been aware that there was employment figures coming out of Canada today that could affect my day trading position. So in the very short term news events are very important. But if you will swing trading or positional trading, I think they’re less important. And so it’s still worthwhile knowing certain economic fundamentals. But also the charts. Like Allessio is alluding to, the charts will tell you a lot. They the charts factor in, you know, people’s views on the world economy, on how a market is doing. All of that all of that information that people are utilizing is there in the charts. So I’m more of a chartist and a sentiment chartist as well. So like I alluded to earlier. I like to pick up on extremes in sentiment. And if I pick up on an extreme, whether it be by the public at large, when we have this with bitcoin, you know, two years ago or even within the trading community, you can pick up sentiment, clues, and sometimes even within the trading community, market’s blowing up and you can get a good gauge that actually there’s too much froth there. And unusually, I have measures of seeing what the general traders are up to. And a great thing to do is to do the opposite of what they’re up to. So if 80 percent of people long the particular market, then you start looking for reasons to sell. Do you view charts the same way, Allessio? Yeah, I actually believe it or not. There’s a famous phrase by Bernard Baruch, a famous chart analyst and trader who said that I believe his quote was, show me the charts and I’ll tell you the news, which is I think really, really good point. And I agree with Charlie, actually, as a matter of fact, I know this is kind of boasting of being a braggadocious, but Charlie and I were absolutely correct about a few months ago. You remember Charlie back in August. Me and you did an interview and you and I got it correctly that we need to wait for bitcoin to come back to us, as a matter of fact. This is one of the key, important lessons, key, important points that Charlie and I both agree on, which is we never chase the market when the price come back to us. And eventually people people are not listening to any of us. By the way, back in August or back in July, if you said Bitcoin is going to come back to 8,000, people were laughing on us. The people were completely ridiculing anyone who said that bitcoin is going to come back form from 12 to 13. Back to 8000. They said: “Forget it. This is not gonna happen.” But me and Charlie were absolutely correct. We were both right on this. Yeah. You don’t want to read the comments, Charlie. Well, I’ll read them, so you don’t have to. But bottom line is, I agree with Charlie on this point. And one, there’s a very great passage in this book by Michael Covel. This book, which I’m holding. I know you guys can see it, but it’s called Turtle Trader by Michael Covel. And in this book, he makes a good point that professional traders like the turtles back in the 80s and even still today. Even now, they look at technicals, not so much the fundamentals. They look at technicals, the key levels on the charts. So basically what I am saying is that often before the news announcements, like the FOMC. Market prices pullback to some key average or trend line or some key level, and then they continue to move in the direction, the trend. So again, we follow the technicals. Technical analysis is really interesting, especially in the crypto trading community, because on Twitter you see a lot of these like technical analysis traders posting about their price predictions and their charts and everything like this. And it feels to me like this is more prevalent in the crypto space than many other spaces. What role do you guys think that this sort of technical analysis plays within the crypto trader community? As far as I’m concerned, the Twitter space. The Instagram space, 90 percent of the people who are posting on there turn out to try it anyway. So they’re after the fact traders. They’ll manipulate their screenshots of their mobile phones. They’ll do all these sorts of things to show these wonderful, amazing trades they done. I think the best advice, like Alessio is just giving some good advice. The best advice I can give to anyone is, yes, use technical analysis because I use, like Allessio, lots of traders use technical analysis. But you need to work on your mindset as well. And you can have a view that Bitcoin might go to Alessio’s talked about 30K. Let’s pick 30K every one . So let’s say you’ve got a view, you’ve done a technical analysis, a huge amount of analysis to come up with that view, but you haven’t worked on your mindset. There’s no way you’ll be able to hold your position all the way to thirty thousand, because when it goes up to twenty thousand again, let’s say it does. Double tops, then pulls back down to 12000. Will you be able to hold your nerve or will you just jump out? So all of that comes to having the right mindset and lots of people can do analysis out in the markets. Not many people can actually trade and stay with their conviction. And that’s where developing a trader mind really comes in. One thing, knowing the fundamentals, one thing knowing some technical analysis. But if you put your money on the line and then you can’t ride it, then what good is that? Awesome. Thank you guys so much for coming on the show. I loved our discussion today and it was a pleasure talking to you guys. Thanks, Jackson. Thanks very much. Pleasure. That was Alessio Rastani and Charlie Burton joining me today to discuss the crypto market. Thank you, everyone, for watching. And always remember to, like, subscribe and hodl!