2022 is coming to an end, and the Bitcoinist staff decided to launch this Crypto Holiday Special to give you some perspective on the crypto industry. We will talk to many guests to understand the highest level of this year for crypto.
Related reading: Crypto Holiday Special: Past, Present, and Future With Blofin
In the spirit of Charles Dicken’s classic, “A Christmas Carol,” we will examine crypto from different angles, look at possible trajectories for 2023 and find common ground among various views of the industry that can support the future of finance.
Spilotro: “As a new technology, crypto has not been vulnerable to cyclical evaluation in the past. But because it has become a larger part of the financial system, it now follows the rules of the system more than society expects.
We close this series with our in-house guest, our Editorial Director, Tony Spilotro. Dedicated to spreading knowledge and tools to anyone willing to listen, Tony keeps his eyes on the market by promoting critical thinking, fighting the crowd, and developing a methodical approach to trading.
Spilotro: “I believe that the media is playing it very wrong. In fact, the “magazine cover indicator” is one of the most proven ways to pick tops and bottoms in the stock market.
Tony is a proponent of the Elliot Wave Theory, which has perfectly described the price trajectory of Bitcoin and crypto since the early 2010s. The market is about to take a critical path, but which direction? This is what he told us:
Q: What is the most significant difference for the crypto market today compared to Christmas 2021? Beyond the price of Bitcoin, Ethereum, and more, what has changed from a moment of euphoria to a constant fear today? Is there a decline in adoption and liquidity? Is the foundation still valid?
A: The biggest difference now is with macro conditions and money flows. The Fed tightening does the trick, taking the bull by the horns so to speak. Ned Davis Research has a rule, “Don’t Fight Food” and this has been proven true over the last year plus. As a relatively new technology, crypto has never experienced cyclical valuations in the past. But as they have become a bigger part of the financial system, they are now following the rules of the system more than society would expect. The industry has been hurt by a domino effect in recent months, exacerbated by the collapse of LUNA and the failure of FTX. But Bitcoin and some other cryptocurrencies feel fundamentally strong. Given how rough it is out there for many stocks, how well the speculative asset class continues to rise is very good. My faith in Bitcoin is unshaken, but like anything, it will continue to experience investor enthusiasm.
Q: What is the dominant narrative driving the change in market conditions? And what should be the narrative today? What do most people face? We saw major crypto exchanges exploding, hedge funds deemed impossible, and ecosystems promising financial utopias. Is Crypto still the future of finance, or should the community pursue a new vision?
A: For me, time drives the narrative. The market will find its narrative when the time is right. The final narrative is that Bitcoin is an inflation hedge and has performed horribly during the highest inflation in years. Narratives are so often false – but we all fall for them again and again. The next narrative will be very euphoric and will cause destruction when the wave of sentiments. I once again turn to some things. Crypto is a new technology that is almost impossible to scratch. Even the internet is early in its design compared to road or railway systems. Crypto is a new baby by comparison. Just like the internet before it, when people don’t fully understand it, it’s easier to fall victim to sentiment and larger market narratives. The dot com bubble is a good example. Like all the other times Bitcoin is claimed to be dead, it does nothing but shake the disbelievers and choke the ready believers. Unfortunately, I don’t think there is a financial utopia ahead, instead of Bitcoin being the best bet to preserve ownership rights over value. I became the digital version of money on the mattress.
Q: If you had to pick one, what do you think is the key moment for crypto in 2022? And will the industry feel the consequences in 2023? Where do you see the Christmas industry going next? Will it survive this season? The mainstream has once again announced the death of the industry. Will they finally get it right?
A: The most important time for crypto in 2022 will be the FTX situation, although one could argue that it will not happen without the collapse of LUNA first. I think the industry is really feeling the impact of the downturn in the years ahead and beyond. A sweeping law must happen, wiping many shitcoins out of existence. Rules will be implemented so that no business can raise capital a’la FTT token. Some innovations will stop, especially around DeFi and Ethereum. The scarcity and stronger foundation of network usage will set it apart from other cryptos. I am convinced that the mainstream media is very wrong. In fact, the “magazine cover indicator” is one of the most proven ways to pick tops and bottoms in the stock market. When the mainstream media starts reporting too much, the extreme sentiment is usually here.
Q: What are the best indicators to watch in 2022, and what indicators are you following for 2023? We know you based a lot of analysis on Elliot Wave theory; what can market participants expect next year according to this theory?
A: The best indicator for 2022 is the weekly Ichimoku cloud. The moment BTCUSD fell out of the Ichimoku cloud, it was a light out for the bulls and a deep decline followed. Granted, this happened after Bitcoin has fallen some in value – it confirms that the bull run is over for some time. I have to give it more weight, especially after seeing how Bitcoin behaved after the cloud disappearing in March 2020. Elliott Wave Theory corresponds to price patterns that many people are not looking for – such as zig-zags or flats – with extreme prices. , and, more importantly, extreme sentiment.
I’m a big contrarian in general, and I go by the nickname Tony “The Bull” I lean bullish on BTC overall. If the crowd is bearish, I think it’s safer to be bullish and vice versa. That said, I’m bullish on BTC for one last rally. I have been building positions for the last 1-2 years in anticipation of what I believe will be the 5th wave for Bitcoin and the total cap of the crypto market.
When everyone is bullish once again, and we have made new ridiculous highs, I will temporarily retire Tony “The Bull” and become the biggest bear in crypto -because this is what I believe to be the grand finale for a while. .