The highest probability trade is to short Bitcoin (BTC) on a potential relief rally to the $98,000 - $100,000 resistance zone. A weekly close below $70,904 for BTC would serve as a strong confirmation of a broader bear market, signaling further downside. Be extremely cautious with most altcoins, as bounces are viewed as shorting opportunities, such as a rally in Hedera (HBAR) to the $0.17 area. Consider shorting MicroStrategy (MSTR) on any significant bounce, as it is viewed as a proxy for Bitcoin and is expected to follow its downtrend. For aggressive traders, a high-risk long trade on Bitcoin (BTC) could be considered if the price dips to fill the CME gap around $85,740.

Bitcoin (BTC)

• The speaker believes the broader, high-timeframe trend for Bitcoin is bearish. Historical data around midterm election years suggests a bear market environment. The 2-week chart has closed below the 50 EMA, which is a historically bearish signal.
• Despite the bearish outlook, a short-term relief rally (or "dead cat bounce") is considered possible and playable.
• Key Resistance / Short Opportunity: A bounce is likely to fail and form a "lower high" around the $100,000 region. This area is identified as a major resistance zone and the best opportunity for a short trade, as it aligns with the overall downtrend.
• Key Support / Breakdown Level: The level of $70,904 is described as the "final nail in the coffin." A weekly close below this price would confirm the bear market with no debate.
• Potential Long Entry: A potential long trade opportunity exists if the price fills the CME gap at $85,740. The speaker suggests waiting for Tuesday or Wednesday for this trade to potentially set up, after the "Monday range" is established.
• Bullish Signs for a Bounce:
  • Extremely high ETF outflows, similar to previous market bottoms.
  • Funding rates have turned negative for the first time in a long while, which has historically led to sizable bounces.
  • The Short-Term Holder MVRV Z-score is below 0.85, indicating new buyers are significantly underwater, a condition often seen at major lows.

Takeaways

• Overall Strategy: The market is in a high-risk, bearish environment. The highest probability trade is to wait for a relief rally towards the $98,000 - $100,000 area and look for shorting opportunities.
• For Aggressive Traders: A counter-trend long trade could be considered if Bitcoin dips to fill the CME gap around $85,740. A stop-loss should be placed below the recent lows. This is a high-risk trade against the primary trend.
• Key Level to Watch: A sustained break below $70,904 would be an extremely bearish signal, suggesting much lower prices are coming.

MicroStrategy (MSTR)

• The speaker is currently in a short position on MSTR, which is down approximately 46% from their entry.
• They are planning to take profits (cover the short) soon in anticipation of a market-wide relief rally that would also lift MSTR.
• The plan is to re-enter a new short position after the relief rally creates a "lower high," using the profits from the first trade.

Takeaways

• The sentiment on MSTR is bearish, viewing it as a proxy for Bitcoin.
• Any short-term strength is seen as a temporary bounce and an opportunity to initiate a new short position at a better price.

Ethereum (ETH)

• ETH is currently holding a key support level, the "golden pocket" between $2,600 and $2,750.
• Strength would be confirmed if ETH can reclaim the "mid-range" (yellow box on the chart). The speaker advises waiting for this confirmation before considering a long position.
• Until key resistance levels are reclaimed, the trend is considered weak.

Takeaways

• ETH is at a critical support level. A bounce from here is possible, but the position is precarious.
• Conservative investors should wait for ETH to reclaim and hold above its mid-range resistance before considering a long position, as this would signal a structural shift.

General Stock Market (S&P 500, NASDAQ)

• The S&P 500 has confirmed a bearish "death cross" on the weekly chart, which has historically led to price drawdowns.
• The rising US Dollar Index (DXY) creates a difficult environment for risk assets like stocks and crypto to rally.
• The speaker notes that significant market drops (15% or more) are historically rare and present massive dip-buying opportunities in the stock market.
• Key resistance for the S&P 500 is 6,796. Key resistance for the NASDAQ is 614 (on the specific chart used). As long as prices are below these levels, weakness is expected to continue.

Takeaways

• The broader stock market is showing signs of weakness, which typically acts as a headwind for the crypto market.
• Investors should be cautious as long as major indices remain below their key resistance levels.
• A significant correction in the stock market could present a long-term buying opportunity for patient investors.

Other Cryptocurrencies (Altcoins)

• The general sentiment towards most altcoins is extremely bearish. The speaker states that "very few coins look good" and many are "absolutely dead" or in strong downtrends.
• Any bounces are largely expected to be short-lived relief rallies that will likely fail and lead to new lows. These bounces are viewed as potential shorting opportunities.
• The advice is to "stick with the winners" like Bitcoin or coins with high volatility and liquidity like Zcash (ZEC), rather than using a "spray and pray" approach.

Takeaways

• Extreme caution is advised for altcoin investors. The risk of further downside is very high across the board.
• Relief rallies are expected, but they are likely traps. For example:
  • Solana (SOL): A bounce to $150 is possible, but the speaker ultimately expects it to fall to $100.
  • Hedera (HBAR): A rally to the $0.17 area is seen as a prime shorting opportunity.
  • BNB: Despite being one of the stronger performers, it appears to be in a distribution phase and is expected to fall to $692 eventually.
  • Optimism (OP): Described as "absolutely dead" and on its way to zero.
• Investors should avoid buying most altcoins until there is a clear and sustained reversal in the broader market, led by Bitcoin.