Bitcoin Is Pulling Back Before the Biggest Bull Run in History

Michael Nadeau (0:00)

I think there's a chance that the setup for crypto right now is like the best it's really ever been.

John Gillen (0:05)

Bitcoin is pulling back, and a lot of investors are scared. Is the bull market canceled? Has all of this just been a fake out? Or is this a retest of support before the biggest bull market in crypto history? Hello and welcome to Milk Road Crypto, the show that is home, watching charts, and catching falling knives while everyone else in crypto is having fun at Token 2049 in Singapore. I'm your host John Gillen. Today is Thursday, October 8th, and today we are joined again by the great and powerful and very wise Michael Nadeau, who is the founder of the DeFi Report. He's one of the best analysts in crypto, one of the best performing portfolios in crypto. Right now too, I will add, and a longtime friend of the show, I'm really excited for this episode. Michael is going to save Bitcoin today. So if that sounds good to you, make sure you like and subscribe, share this episode with somebody who's going to enjoy it. And as a reminder, our podcast today is free and that would not be possible without our partners at Nexo, the digital asset platform that lets you earn, trade, borrow all in one place, all from one account. Keep an ear out for more information on them later in the show. But for now, welcome back to Milk Road Crypto. Michael Nadeau, how are you, sir?

Michael Nadeau (1:05)

I'm doing great, John. How are you?

John Gillen (1:07)

I'm good. The weather is great, but Bitcoin is not. Right.

I think that would be a good place to start the conversation. Bitcoin is pulling back here. We just bounced off of 81K as we sat down to record here today. What's your initial reaction to this pullback? I know it's just happening right now on the charts, but is this surprising to you? Is it worrisome? Is it expected? What's your reaction to this?

Michael Nadeau (1:28)

Not super surprising to me.

I've been looking. Bitcoin established its what I would say technical confirmation of what I would say the early bull phase with multiple weekly closes above the 50-week moving average that played out towards the end of September. And we've been in this elevated range here, trading between 77, 87K or so for roughly a month. And we're processing, I think, that initial move that we had in mid-August after Besant came out and said they were going to protect the long end of the curve. So I think the market's processing this. Bitcoin has been performing quite well through what I would say is a lot of darkening clouds in the macrospace. And I've been looking to see, I've been expecting that Bitcoin would come back and retest the 50-week moving average, which is still sloping downward. That's about 78K right now. So I think there's a lot of eyes on 83K because that's the high that we established in May. We want to kind of maintain that level as sort of more confirmation that, you know, we're in a secular upward trend here. But I do think it's totally normal that we would come back, retest that 50-week moving average. I think there's a lot of shorts that want to push the price down there in the near term. And that's really what I'm looking to see is how does Bitcoin respond once we go to that level? I don't know, it looks like the charts are going down today. Maybe we see that today, tomorrow. But I don't think this is any major cause for concern unless we start breaking those levels and establishing weekly closes at lower levels.

John Gillen (3:10)

Okay, before we get into some of these other topics, let's unpack those ideas a little bit more there. So what I'm hearing you saying is that you're sort of expecting Bitcoin to revisit 78K or at some point hit that 50 week, and you wouldn't get concerned unless it convincingly lost the 50 week. Does that kind of encapsulate your ideas on this? And what time frame are you looking for that to happen under?

Michael Nadeau (3:30)

Correct. On sort of the path here, I think it makes sense to me that we would come back, revisit the 50 week. And if we do that, drop lower, have a close, weekly close at a lower level, maybe a multiple weekly close at a lower level. And we're not seeing flows. We've seen a pretty strong return of flows back into crypto markets over the last month or so, particularly in the ETFs. So we'll be watching kind of the flows, how the market's responding, what the positioning looks like in the order books to see how this plays out. But I would say the sort of technical confirmation is in that we're kind of in this what I would call the early bull period.