Hey, everyone Today, I'm joined by Mati Greenspan and Erik Crown to discuss the current direction of the Bitcoin market, regulation and the future relevance of cryptocurrencies

My name is Jackson and welcome to this week's Crypto Duel First, let's get your guys take on the crypto market, specifically with regard to Bitcoin Are we headed up? Are we headed down? Are we headed sideways? What are the numbers and charts telling us? So Bitcoin, this is a daily Bitcoin right here Overall, you know, very little has changed since we last spoke And to be quite honest with you, for better or worse

However, if you are asking about the more proximal action on Bitcoin, just kind of what you expect or what I'm expecting for this week, we do have a pretty obvious sort of setup going on right here And there's a few things that are of interest right now in the lower timeframes, lower timeframe being a daily right now And I am starting to see a lot of momentum also to sort of turn back up My favorite indicator, my personal indicator is the jewel And this actually fired off a decent buying signal a couple of days ago on the low

So I'm kind of split in the way that I'm looking at this, because short term, you know, do I think that we have some upside? Probably, yes You know, the way that I trade it would be mostly the same I do think that if we take out yesterday's high at $8,350ish region on BitMex, I'll be looking for a move to test back up towards about $8,650-$8,700 But that doesn't really do anything for the greater picture And I think that that's probably what this video's more focused on

As far as the greater picture goes, you know, the levels that are relevant are still very much the same $8,650 to the upside and about $7,800-$7,900 to the downside right here You know, any sort of a short term play is just that And I do believe that the way that we break yesterday's, you know, yesterday's doji right here, or if you want to call it a shooting star, whatever you want to call it, that kind of acts as the same thing I do believe it's gonna be our short term direction and we're gonna test, you know, the outside of the range, whichever way that we break and so forth

You know, in this example, be looking for a test back up to $8,600-$8,700 if we do break north above $8,350 If we broke south below $8,150, I'll be looking for return back down to about $7,900-$7,950ish region And realistically you know that's probably the most unsexy answer realistically is sideways I am a little bit biased here to the upside just based off of that However, longer term I am biased to the downside, especially to go below $8,700 because death crosses are coming on the way and I do put a significant amount of weight on all major moving averages which are really shaping up to be quite bearish the longer that we stay below $8,700

So it is a little bit of a ticking time bomb I believe that the bears were gonna take full control They would have done it a few days ago when they had their chance right here The fact is that we're going more and more sideways actually does bode better for the bulls But I would expect to see a move probably a little bit later this week to test one of the outside's the range

And at that point in time, we'll once again be able to maybe get that next breakout trade If we do break north of about $8,700, I would target a move towards $9,300-$9,400 back up here probably applied another slow bounce I suppose I'd still be overall cautious I am a very, very defensive in this market right now, even though I am slightly, I actually just flip slightly long right now I'm quite defensive in this market and even if we did work our way back up to the mid to low $9,000 side, still kind of be thinking to myself like, you know, likely still a lot of resistance in that region

I'm not necessarily convinced that the downside is over And of course, if we do break below $7,800-$7,900 right here, I would target that next move, as I've been speaking about towards about $6,900 And then be looking for a bounce around that But other than that, you know, again, it's kind of an unsexy answer, probably mostly sideways here in the lower timeframe range, you know, of about two and a three dollar moves north to south, it's really the only thing that I'm playing right now How are you feeling about all that, Mati? So what you're saying, Erik, is that if it breaks below the relevant support level, you'd go short, actually

Yeah, exactly Okay So there's a bit of a difference between the two of us, because personally I don't short gold and I don't short Bitcoin And as you can see in my portfolio, I do believe that it's correct to be defensive at the moment But for me, what that means is to lower my exposure on the long side

You want to talk about the big picture? We really need to zoom out a little bit on the charts over here, because that analysis is spot on for what it is It's a very short term play If you look at the long term, however, all of what you were showing on your screen fits in this little kind of area over here, which is since the end of last month, we've been in a consolidation range, which is actually a very low volume consolidation If you look across the board right now, volumes are, I wouldn't say historically low, but they're incredibly low compared to what we've seen over the last two years You can see that, for example, on Messari Crypto, who tracks the Top-10 exchanges

They're tracking about $200 million for the Top-10 That number has reached four or five billion as little as three months ago As well on the CME group, the CME group futures are kind of steady, actually, but still pretty low Bakkt is almost nonexistent We're talking about three Bitcoin's traded today

And then even on the Bitcoin blockchain, we can see that over the last few weeks there was a significant drop in transfers on the existing blockchain So when volumes are low like this, volatility is low This is a high risk situation, which means for me that I want to kind of cut my exposure But for the long term, I'm still definitely long Joe Weisenthal, host and editor at Bloomberg, took to Twitter to voice some speculation about the use-case and efficacy of Bitcoin

To summarize his rather lengthy tweet, he argues that there is no point in using Bitcoin for legal transactions because you can just use a much faster payments system, like a Visa credit card, so the main use-case for Bitcoin is to make transactions that Big Businesses and Big Governments don’t want you to do He goes on to add that because Bitcoin is propped up by a symbiotic relationship between speculators and transactors – meaning that the more transactions are made, the more investors will be attracted, and more investment leads to greater price stability, which benefits transactors His point is that because of this relationship, Bitcoin investors are essentially enabling transactions that are against the interests, and possibly the law, of “The MAN” He then uses this argument to issue a warning, asking “how sure are you that down the road regulators won’t come in and shut it all down?” As two people who actually trade Bitcoin on a regular basis, what do you think about his perspective on Bitcoin? I think he really destroyed his credibility with that last statement there to say what's going to happen if the government comes in and shut things down shows that he hasn't really done the research into what this is and what he's talking about Which makes you think that his prior comments are likely unfounded

I mean, of course, there's some truth to it as well, like no doubt about that But that last little clip there tells me, you know, this guy's maybe not the most informed How would the government shutdown Bitcoin legitimately in the sense where they just complete snaffled it? Of course, they can make it difficult They could, you know, put in sanctions or whatnot with making sure that, you know, banks know exactly where your money is going So if you were to send money to exchanges, some like that, they could maybe track that

I can understand that But even then, there's still no way to truly shut it down So, you know, through that conversation, I'd have to first understand exactly what he means by that And then second, you know, Judge, OK, is this you know, is this founded or not? And I'd say at the outset, probably not What he was trying, I can kind of clarify, because I was quite part of this conversation

What he was trying to say is that because Bitcoin is intended or its sole use is transactions against the man, therefore we shouldn't necessarily be rushing to institutionalize it That was kind of his main point I actually wrote an open letter to Joe Weisenthal that day, which, as you can see, he was kind enough to tweet out to promote the discussion The letter is called "Where are you goin' with that gun in your hand?", of course, a play on words from Jimi Hendrix "Hey Joe" And the point in my letter was pretty much that Bitcoin, yes, it does have roots in sticking it to the man

But I would argue that that's not, first of all, that's not the only use case I've outlined several use cases that are not necessarily sticking it to the man or related, but more than that, there are use cases that are sticking it to the man related, giving it to the global economy, the big banks, etc, but not necessarily illegal or illicit, meaning that as a free country, the United States should be able to have the option to kind of choose their own money and to kind of choose their own source of that and to choose the financial institutions that they choose to work with or to opt out if they so choose And therefore, my conclusion, of course, is that if the United States truly stands for freedom, then they should be embracing a product like Bitcoin that is immobilizes what freedom is But overall, and as you can see, I put it to analysis here, a chart from TheTIEio, which basically shows the point where Joe started his attack on Twitter and actually the sentiment on Bitcoin Twitter actually went up significantly

It had dropped because of the price drops But actually, the entire discussion that Joe created around Bitcoin actually seems to have served to lend a positive hand in the sentiment of crypto on Twitter Right But as we all know, the sentiment gauges on crypto Twitter are notoriously inversely related to price action The thing with that is and I agree with you here

You know, this person just sounds like, it just sounds like the traditional just old man saying, you know, Bitcoin is bad and you should not like it I think that's just a very lazy, it's extremely, extremely lazy argument You just say, you know, this is for sticking it to the man, he has like a very clear person in mind, which I understand And that's kind of the person I want to distance myself from in this space You know what I mean? You know, you want to be reasonable

You don't want to get carried away with these just silly arguments that are you know, they're mostly just based on emotions and whatnot So this guy over here, you know, saying the same thing, that's just completely asinine Then he got the then you got the Bitcoin drinking too much of the syrup on the other side That's what I really want to get away from And it sounds like this person just hasn't really done the research into what it is

So I, you know, I'd have to say at the outset, I'm just not It just sounds, it just sounds like a non-event, really I'd just love to hear the question answered, how does the government shutdown Bitcoin like legitimately shut down to the point where you cannot use it no matter what? He was arguing that the government should shut down Bitcoin to clarify, and if you read his note, he was arguing against the approval of a Bitcoin ETF He didn't say Bitcoin should be shut down I mean, that's quite a simple thing then

I mean, you know, does Bitcoin need an ETF or does not I think it's kind of grandfathered in that it will get it one at some point I mean, it's just headed toward that direction You know, we're not just going to get CME futures for no reason And now we're talking about options on CME as well

I didn't even know they do options on CME, by the way And then on top of that, we just got Bakkt and things are absolutely going in that directon It's coming out Next year, though But yeah, to me that's showing that the traditional market has actually been very accepting of Bitcoin

It's just a slow process as it you know, as it kind of should be because these things are very new volatile technologies You wanna take your time getting to know them And then I think that that's what the market do And I think that is the right thing to do Cool

So let's switch gears a little bit and let's talk about some of the bigger names in cryptocurrency right now Specifically Libra and TON So as you probably know, Libra has been losing a lot of its members over the past few weeks, including MasterCard, Visa, PayPal and Booking Holdings And the TON ICO release has been delayed to February because of SEC problems And now Mark Zuckerberg is going before the Senate tomorrow to discuss data issues with Facebook

How are these delays affecting the cryptocurrency space? So the way that I've always known markets is that markets love certainty And whenever you have an uncertain, you know, just whatever conversation – the market hates that, and in this sense, the market kind of treats Libra in a similar vein to Bitcoin And I know that people are gonna really dislike that statement, but let me explain The way that the traditional market kind of plays things as you do it through like corollaries, you feel like the next best thing And the way that the traditional market is kind of looks at Bitcoin is that it is related to Libra just by the name cryptocurrency, essentially

So I believe that we've actually seen a lot of the positive momentum in price action over the past three, four months Obviously not the last month But in that run up from what was it like June to where we were in September, essentially, that was also a lot of, you know, a lot due in part to Libra just coming into line, because when the government or when the SEC or whatever, you know, Congress, whatever it might be, you know, accepts Libra, it sets a standard and it makes crypto more mainstream just by that just, you know, just by that name kind of being now accepted, I suppose, just by being spoken about So kind of answer question in multiple facets I do think that, you know, Libra kind of proven itself in a way

And if it does have a good hearing tomorrow, I would expect you know, I would expect, you know, a nice move to the upside probably to the $9,000s, actually, if that were to happen I don't think that that's necessarily grand I don't think that that's necessarily all said and done But a strong Libra would be good for Bitcoin And I do believe that we saw a lot of the run up and also kind of at some of the downfalls precipitated on just random news, parts of of Libra's partnerships and kind of their overall acceptance

You know, as the story went on The big thing with that is, the big thing with Libra is that if Libra can actually pull through here, it makes Libra antifragile And even though all of these major companies, all these major names have left them, I think said Visa, PayPal and then a bunch of other ones Well, that's kind of a big blow If Libra actually pushes on through here and survives that and then and does what it sets out to do, that's going to be incredibly powerful

So it's gonna be very, very interesting thing to kind of monitor over the next six months, twelve months, whatever, whatever it ends up being I'm not qualified to speak on the legal aspect of that, because I know nothing about it, but I can only say that I would expect the market to move off this And this is why I'm kind of a little bit more guarded with the way that I'm doing my own analysis, my own trading right now Just because, you know, I can come up with some incredibly bullish things I can come up with mostly, mostly bearish things, actually

But I do believe tomorrow's events gonna be likely a big driver Mati, how do you feel about that? I thought it was very interesting Specifically on the legal aspect, how just yesterday, the day before, I believe, Libra kind of took a change in direction We heard David Marcus announced that they would be open to rather than having a basket of currencies, actually have more of a stablecoin type of model where depositors in the US would hold US dollar stablecoins Depositors in the UK, for example, would hold GBP stablecoins

And I think that that actually gives the entire project a lot more of a clear path forward as far as regulation is concerned First of all, it's something that's already being done by several large financial firms where they have tokenized fiat currencies and those are completely legal and as well done by major financial institutions throughout the world who continuously print US dollars Of course, they don't call it, you know, JP Morgan dollars They just call it US dollars But actually having that kind of clarity and say, OK, these are the dollars that Facebook actually introduced, I think that that could actually give the entire project from a regulatory standpoint, much more stable footing

I was very curious about the companies who pulled out because I didn't really understand why would they pull out at this point, at this early stage It doesn't seem like they have much to lose by staying in However, you know, if the project does go forward and does clear that regulatory hurdle, I do believe that Facebook will not have any problem finding 100 companies that are willing to plop down $10 million on something that seems very, very sure is going to happen and be immediately open to all of Facebook users They would be silly not to Yeah, agreed

That sets a precedent for the overall market and I think that it directly affects Bitcoin as well and just cryptos in general So something I'd definitely be paying attention to You know, as this kind of unfolds here, like I said, tomorrow, if we see, you know, if if there's just a good sentiment going into this meeting, which I'm sure will be live broadcasted as well, so if you want to watch, you certainly can Then I would imagine that that's going to likely show up in the market Either way, we'll be able to tell very clearly what the effects of Libra on Bitcoin are

Last time we were in a rally, we saw Libra, you know, the Libra hype and Bitcoin rising together But there were many other narratives of Bitcoin surrounding it at the time Now we're looking at a very low volume environment If we do suddenly see some sort of huge price movement, positive or negative in reaction to those hearings, I think we'll have a much better understanding of how Libra affects Bitcoin and vice versa Right

And you know, everything that I look at from a charting perspective is suggestive that we do see some pretty massive price action precipitated on tomorrow's event Volatility, as Mati said, is extremely low I mean, if I bring up my screenshare just once again, there are just so many influences here showing that we are in decision phase for, you know, a multi thousand dollar move relatively very soon I'm looking at stock volatility percentile and just about every time frame is extremely low We are at low

We are lower than we were from the breakdown from $10,000 where we are right now This was just about a week ago, two weeks ago right here We're even at about the same area from historical volatility percentile standpoint or sorry, even lower than what we broke out from March by the way, as well But we're basically at the same kind of read that we saw from $6,000 to $3,000 drop right here So I do believe that we're gonna be looking at a major, massive move

Momentum are suggesting some bullishness in here But, you know, like I said, I would actually be extremely bearish here if it wasn't for my own indicator, the jewel And I'd be happy to put on some pretty massive shorts But looking at this right here, I mean, we do have some death crosses on the way And it makes it very difficult for me to be bullish as long as we're below $8,700

So I do believe that the benchmark is going to give clarity on the situation And the way that I would be trading is just whichever way that we break from this consolidation, it's very simple here I mean this is not like crazy technical analysis just above $8,650 or below our current lows like $7,900 That's going to be the next major move To the downside, I've been looking at targets into the upper $6,000s

To the upside, I'd be looking at targets into the mid to low $9,000s and perhaps beyond So right now, you know, if you're not in position right now, I mean, that's a pretty noble decision, to be quite honest Realistically, all you have to do is just wait, just wait another day Once you have clarity on the direction, then you know this jump on the winning team, essentially What would happen to the cryptocurrency market if their regulatory challenges are insurmountable? Fizzle

Yeah, I'd be devastated You know, Bitcoin can survive on its own without that I'm sure that it could, but it certainly put a massive damper in the progress that's been made thus far with kind of joining the traditional world from the crypto world, which I know that the true crypto fiends are going to hate that statement I'm going to hate it right there But here's the thing, man

Here's the thing At the end of the day, I do believe I strongly believe that's the best solution here, is kind of combine the good parts from cryptocurrency land and the good parts from traditional land, and then you're probably going to merge together And that's the way forwards That's kind of how I see what's going on right now, especially with Libra, especially with the fact that we're you know, we're talking about an ETF still The fact that we've already got in futures on a major U

S exchange I mean, CME is one of the best ones And we're talking about options coming on there, you know, coming into next year and then more and then Bakkt and all that good stuff So that I believe is kind of setting up the stage for this, you know, integration

And Fidelity making their roll out Yeah, absolutely I'll give you a possible scenario that might just happen in the future And I hope for your sake it doesn't Let's say Mark Zuckerberg tomorrow gets completely sloshed in Congress

And confidence in the Libra project goes down the tube Traders like yourself are happy to take a break out to the downside And then that ends up being a complete bear trap Okay, so this is exactly what happened in the ETF decision, the Winklevoss ETF decision of March 2017 The ETF was highly anticipated, much hyped and then completely squashed by the SEC

Right, but hold on Let me stop you there, let me stop you there An ETF was never Nine month rally, one of the greatest rallies of all time where the crypto traders said, we don't need your ETF, we don't need your Wall Street products We don't need any of that Great, we have Bakkt on board, come on board Great, we have Fidelity on board, come on board Other than that, we're moving forward

This market is extremely immature and extremely young That would be the wrong, extremely wrong stance to be taken That's a possibility, I'm saying, that's all Right, possibly Perhaps, yes

But again, the way forward is by more mainstream adoption, whether people like it or not I know the traditional crypto person hates hearing that, but the best thing is to meet somewhere in the middle That's how you get real adoption That's how you get mainstream people into this game, which is, I believe, the true purpose of Bitcoin is to really become something bigger, not just for, you know, not just like this super niche type thing, but something bigger, encompassing and including everyone in the world But don't forget, with that, with greater institutional adoption comes greater price stability, which means that all those crypto traders who are hoping for those thousand dollar movements

Those moments go away as the larger institutions enter the crypto market Right, hold on So let's just take that one step further I'll go into the chart just one more second here I have to extremely disagree with that

So cryptocurrency land is a very unique place right now because you have an extremely volatile asset that moves, you know, sometimes thousands of dollars per day and you can trade up to like a 100x leverage On exchange Binance now you can do like a 220-225 bucks leverage, which no one needs by the way A little bit of that going on But what Mati us saying over here is that some price stability would be bad I would actually disagree

It would be so far fetched for, you know, in the future that they would even become an issue because we trade, you know, we trade like legitimate fiat currencies which trade quite literally like four decimal places to the right, as you can see over here I mean, we're looking at an extremely, extremely small amount of moves But many, you know, you can make a living trading this right here There's plenty of opportunity because you have that leverage, because you have you know, you can still trade those moves It's always a percentage game

So as far as that statement goes, I think traders wouldn't care Traders trade, you know, Forex all day and not imagine that Bitcoin would be no different In fact, I think it'd be much more readily accepted by traders because now we're going to have it, it would also imply that we have more liquidity so you can get your fils where the biggest issues with Bitcoin right now and the biggest issue with institutions coming in here is that you just you can't get your fills Why is Bakkt doing no volume? Because no one's trading there No one's trading there

And how do you get more people to trade there? Well, you need more liquidity How to get more liquidity? You need more well, you need more people trading there It's like a chicken or the egg type thing My point is, is that that is just the natural progression And it's not going to really change anything for the traders

It's only going to change things for people who are like using degenerate amounts of leverage And you need a move like that in order to produce like a respectable amount from their trading You know, for people who you know, for people who are professional traders, it just be, you know, as Forex And remember, we're talking about Forex, which literally moves in, not point Not, not not one of a decimal, which is in every tech

And we're talking about Bitcoin, which moves literally in a half dollar ticks like not even to the, you know, multiple decimal place to the right We're talking about half dollar ticks And you could see like you could see a $50 move in the span of, you know, 10 minutes And it doesn't really change anything That would be so far and well away

And then we also kind of have, you know, already set a precedent with Forex anyway So I think it's kind of a non-event, really That was Mati Greenspan and Erik Crown bringing the latest in this week's crypto market Thank you, everyone, for watching My name is Jackson and always remember to like, subscribe and comment