[0:02]What's going on guys, it's Killa, welcome back to the channel. Now, in today's video, I'm going to be covering my entire thesis as to why I have closed my big swing short position from the 72.8k region. Now, just because I have closed my short position doesn't mean I'm not expecting lower prices. The reason why I've closed my short is because I want to manage risk and I'm going to be covering some of the external confluence which I'm looking at in today's video as to why I have decided to close my swing short position. And obviously my updated plan in terms of what I see developing next over the next three to six months. So, basically in my previous video, I gave a scenario where we could see something like this, a little range into a push down, deviation, chop below the range low and then expansion to new highs. This is still a scenario which I am favoring. So, you're probably wondering, well Killa, if you are so confident in this area being tested, why have you not held your short? Now, the reason I closed my short position because I want to manage risk, right? Before making money and before being right, you have to make sure you manage risk. You have to make sure the risk reward is in your favor. In this case, I was short from 120k, I was short from 95k, and I was short yet again from these highs. I have played this cycle exceptionally well when it comes to buying around the bottoms and selling around the tops. And if we start looking from a risk reward perspective, Bitcoin has already had a big measured move down, mirroring what's happening in every other cycle, right? We are in a bear market. However, if we start looking from a risk reward perspective here, we can see that approximately in my previous videos, I said we could have a sweep of this wicked low, and we could see another 20, 30% drop to these regions here, low 50s, as the bottom formation. I said we could see this and we still can. Ultimately, I am not a market maker. I do not know exactly what's going to happen. I just have a good idea of what's going to happen based on previous historical price action, and in this case, we could see the sweep below, but there is also a very slim chance we do not. So, I'm prepared for both scenarios. In the event we don't sweep the lows, there's a very good chance we have a different schematic where we range, range, range, maybe have a little sweep and then a push up to the next bull market. This is also an external factor. Yes, I am favoring the sweep of the wick low because the timing doesn't align with a traditional bear market lasting about 350 days. If we start measuring where we are now, we are only about 182 days into the bear market, so there's definitely room to have this chop capitulation. I am not saying there isn't. However, the reason I've closed my short is because I am technically aiming for just this sweep to the downside. When in reality, if we start looking at the possibility of an extension in the next three to six months, then we can see there's far more greater upside versus the downside, which I'm aiming for. Because of that, it doesn't make any sense for me to still be in my short positions, right? I'm essentially trying to catch every single little move downwards. And eventually, just like everybody says, the market will humble you. So, from a risk reward perspective, that is why I have closed my short position. What am I looking at next? Well, first and foremost, I'm looking to long. I'm looking to long to new highs, if we take a look at when I expect Bitcoin to create a new all-time high. I expect that to happen within approximately 350 to 400 days, which puts us around 2027 July, August, right? And this is when I expect Bitcoin to break a new all-time high around this price region, right? I expect that to happen in terms of a new all-time high where we surpassed the 126k region, this is likely going to happen around 2028, right? So, I am looking for long positions in this boundary. As you've already noticed in my previous videos as well, I brought up that I was scaling fractionalized into spot positions. This is nothing new. Yes, I have the scenario for deviation, but when it comes to scaling into long-term bags, I am not going to be fixated on one particular price, just like most people are, trying to nail the peak bottom. My approach has been fairly simple, when I expect there to be a significant trend shift, I scale gradually into the price, even if that results in me being slightly early. I done it at 120k, we went to 126. I done it at 94k, we went to 98k. These are small fluctuations on the lower time frame, right? And I done the same thing here when I took the short. I shorted it 72.8, we went to 76k. So, just because I expect something to play out, doesn't mean I'm going to be waiting for the ideal sweep. This is how you get front run. This is how you get left behind. A lot of people wanted 150k up here. It never happened. A lot of people wanted to test of 100k here for a psychological boundary. It never happened, and the same thing happened here where people wanted 80k to fill the gap, yet again it did not happen. So, that is why I like to scale gradually into the price. So, I'm looking for longs. I'm building my long-term spot holdings within this range as well, and I'll be taking my first swing long at 62.8k. So this is what I am planning for the next three to six months if we manage to get any sweeps into this area. My invalidation is going to be around that 38k region. So, if we managed to get to this lower region and I do get stopped out, what does that mean? Well, I lose some money. It also means I can buy even more Bitcoin at a lower price, which eventually, if we follow since Bitcoin's historical price action suggests we're going up, well then if we follow that path, well then eventually I will recoup everything once we go back up again. This is how you play the market, when the risk reward is in your favor for upside versus downside, you simply buy. And a couple of the indicators which I'm going to be covering right now are on crypto quant and Bitbo. where I'm going to be covering some of the statistics in terms of where we are currently positioned, and hopefully this is going to give you an idea of why I have closed my swing short as well, and why I do not think it's a good idea to be shorting around this lower price region. Now, like I've said, we are still in a bear market. We can still see drops, but you need to be prepared for the possibility of a trend shift eventually. I just ain't interested in trying to catch every little move towards the downside. Also, before I start covering the indicators, I just want to bring up a similarity to what we saw in 2021 to where we are now. We had this downwards trend line, we had a break above. I remember when we around this region, everyone was extremely bullish. We saw a 75% drop, we saw a break, everyone was extremely bullish, then we had the capitulation in FTX. If we start looking at where we are now as well, we can see we have that trend line here as well. So what does that mean if we mimic something very similar to what happened here in the past? There's a very good chance we have a slight break, everyone is going to be extremely bullish, but be prepared for a swing failed breakout into a push back down into the range. So that is something else I'm also observing here. Now, moving on to crypto quant. First, we are going to be looking at the bull bear market cycle indicator, right? and start analyzing what is happening from a higher time frame perspective, right? So, if we start seeing the red, overheated bull, if we see orange, we have the progress of the bull market, if we go to bear, this is our light blue, early bull, obviously before we have the move towards the upside, and then we have extreme bear, being the extended blue. Now, we start looking at where we are now here on this chart. We can see that we are in a bear market. We are in extended light blue, and we've had some slight flashes of these dark blue regions. Now, what does this tell us from historical examples? We can see while buying every single time within this light blue, dark blue flashing, it has been very good for long-term buying opportunities, right? You want to buy when we are in extended blue, being the bear market, right? The extreme bear market, we can see each cycle, the first cycle we had extended extreme bear. The second cycle we had less extreme bear, the third one around here, we had very similar to the previous cycle in 2016. But you can see buying in the light blue and buying in the extreme bear is where you want to be capitalizing. As you can see here, we are in extended blue, approximately somewhere around here from all the other previous cycles, showing that we have already had that big measured move towards the downside. So, I'm no longer interested in looking for shorts here because the higher time frame macro is shifting. Moving on to our next indicator here, which is giving us a mayor multiple of oversold, the SMAs, the overbought, the high overbought and the alert signal, right? Basically where we are forming a local bottom. So if we start looking at what happens around the green zone of when we start approaching this 0.8 region of where we are undervalued, right? We can see we get the signal of where we are going to likely see a trend shift. In this case, we see light green, we see that Bitcoin does have the drop, but we can see once we are in this extended green area, it marks the bottom area. If we start looking at previous bottoms as well, once we are in this lower green boundary, we are looking for solid buying opportunities. In this case, if you bought around here, you would have been in great profit the next cycle. If you started buying any sweeps into this lower green region, you can see on the chart here that it marks around these bottoming areas where you want to capitalize. The same thing happened last cycle where we saw a sweep into this lower region, we saw a push towards the upside. And what are we seeing again? We are below the 0.8. We have tested very low into this oversold area yet again, whilst Bitcoin is down 53%. Now, yes, every other cycle we've seen 80% drops, 70% drops. Right now, we are down 53%. So, we could see another 5, 10% drop, right? However, if we start looking at the asymmetry here and the risk reward, it doesn't look like a good idea to be shorting here anymore. If we start looking at these external factors. As a matter of fact, it looks like the area to be looking to buy long-term bags. Now, just because we're in green doesn't mean we're going to be V-shape recover. We can spend months in this lower range before having that recovery. Same thing here, we spent months in this chop before the recovery, we could see the same thing yet again, right? So looking at these indicators, it's given us a good idea of what to expect and where the cycle is currently positioned.
[11:37]Again, if we start looking on Bitbo at the SOPR chart, every single time this is in this dark blue region, this is marking where we are significantly oversold, right? In this case, every time we flash with this dark blue region, this is where you want to typically look to buy. In the first cycle, we saw blue, blue, blue. We saw blue marking the macro higher time frame bottom into the extended red, which is obviously where we are in a overheated bull market. Overheated bull market when we start seeing the flashes of blue, we start having them bottom signals into that push upwards yet again. And if we start zooming in to where Bitcoin is now, we can see extended blue on this entire drop, and we're going to look back at this in a couple years from now and be like, you know what? It was very well worth it buying around this price region. A subtle indicator, but again, very, very useful. The next indicator which I'm going to be moving on to is the net unrealized profit and loss, which is given us the different stages of where the market's positioned, right? So, if we start looking at the first cycle, right? We start looking, we are in extreme fear. The capitulation, we have the reversal back upwards into extreme euphoria and greed. We see the next cycle yet again, we are in extreme fear, then we push up to euphoria, greed, and then we see another push down, and you get the drill, right? However, look at the characteristics of what's happening. The first cycle, we were all the way down here for extreme greed. We can see we are gradually shifting from having these capitulation which to these lower levels. So what does this tell us? It tells us the cycles are changing. It tells us the drops are being less lethal, and we can see each time the drops are getting shallower, right? So we can see here, we went from all the way down here to our recent one, which was back in 2022, we were just scraping below this capitulation area, right? And we can see now we are in this gray area, hope, fear. We are in this lower boundary, right? So, we can see there's a gradual decline, meaning that there's a very good chance that we might not even sweep this lower green box where the capitulation is. There's a very good chance that doesn't happen. We might get very close to it, but we don't have to sweep it because we can see each time in other terms, trading terms, we are seeing higher lows right here in this case. The extreme capitulation is getting shallow each cycle. So, there's a very good chance we don't actually sweep the green, and eventually each cycle, this is going to get gradually higher. We're not going to see these capitulation moves from what we saw back in 2012, 2016, we're going to start moving more like a legacy asset with less volatility. Moving on to a very useful indicator, yet again, which I use on the higher time frame, is the Bitcoin VDD multiple, right? If we start looking at what happens when we are in green, this is where you want to be buying, right? When we're in extended red, this is when you want to be selling. This cycle we saw, we weren't in extended red, so we can see that the cycles are changing. But what we do not see change is the consistency of when you are buying in green. When you're buying in the green zone, this is essentially when the price has already dropped 50%, and every single time it's marked a very good buying opportunity. Where are we? We are in this green zone, very similar to where we were back at 23k, 24k last cycle. We are all the way down here at 0.29 green. So, yet again, this is another very subtle indicator, which I use. And I'm not going to typically go into the analogy of how this works, but you can see here, if you do want to use this, you can always head over to their website as well. Again, how to use extreme tops, extreme bottoms, I already understand this, but if you do not understand, you can always pause the video here, quickly run through how it works, but it's pretty self-explanatory, right? So, given all of these confluence, we can see that Bitcoin on the macro higher time frame looks like it is bottoming or forming a bottom region. Because of that, that is why I am no longer swing short. Right now, my bias completely neutral. I'm waiting for the market to play its hand. Whether we see the sweep below, if that happens, I will be looking to capitalize as much as I can. Yet again, if we see a sweep above into acceptance and we see a trend shift, same thing, I'm going to diversify, and I'm going to get into a long position. I am waiting for the market to play its hand. Right now, I have a neutral bias. I'm waiting to see if we have structural acceptance above a new range or we are still in the range, and we're going to see deviation below these lows. So, again, everything I do is justified based on math and risk reward. We are approaching a period where the market's going to be extremely difficult to navigate. So that is why I prefer to sit on the sidelines. I'm going to wait for the market to show its hand, and once I see enough structural acceptance or if we see deviation below, then I'll look for longs or shorts depending on what the price action is doing. As of now, I'm not favoring shorts because we've already seen a massive drop, and there are a lot of signals that on the higher time frame, the market's bottoming. Hopefully that clears the confusion as to what I'm expecting here and why I've closed my swing short, and I'll catch you guys later.
