This is part 2 of the CryptoCast #403, the podcast part in the 4003A.
We discussed the crypto news this week and now we're going to talk about the sense
and nonsense of technical analysis.
And with who else do I discuss that, then with Betts Lachter, analyst at Kenneth's platform Bitcoin Alfa.
- That's Daniel. - Welcome.
We're going to do a deep dive into your work.
We're going to evaluate whether you actually do it well.
- I haven't talked about it that often. - Function and Live on the air, that's going to be very interesting.
Before we start, this program is sponsored by Bitfavo, the biggest crypto exchange in the Netherlands.
And at Bitfavo, you can handle very low trading costs, more than 400 digital currencies.
Well Bert, it was high time that we did a deep dive again.
No Veronica S.J. this time, that couldn't be included.
So maybe we should have had some of that.
But good, next time, then Veronica is gone, that's what I believe.
- Technical analysis Bert, we have to talk about it, it seems like it's fun to talk about it,
and about your role as an analyst.
Tell us, technical analysis, why are you fascinated by it?
- Tell. - Yes.
Well, fascinated by technical analysis, I actually don't know that.
- That's why I'm fascinated by it. - But in complicated things, you do it yourself.
Well, look, that might be a nice starting point.
I'm fascinated by complexity, complexity systems.
Then complexity science is the field of expertise that thinks about it, that researches it.
And then complexity systems, you have to think about the weather and the climate.
The CNU system, the organs, the people.
And it's fun, it's a low time right now.
The people consist of the CNU system, the organs, that are also complex systems on their own.
But also groups of people, they are at a higher level again.
Or communities, they are also complex systems.
And maybe as a extension of that community, the world economy is a complex system.
And financial markets, too.
And the earth to a complex system, and you could put a complex system next to a complicated system.
And a simple system, for example.
In a complex system, you see that the whole system has behaviour, knowledge that you don't know.
By studying individual parts of it.
And that's what we call an emergency.
And a nice poem by Peter Dodds, he's a complexity scientist in Australia.
He wrote it like this.
There is no love in a carbon atom.
There's no hurricane in a water molecule.
And there's no financial collapse in the dollar bill.
So if you look at the elements of a system like this, if you study it, you don't see what the whole thing is about.
And if you study a water molecule, you don't discover anything about organs, you study a dollar bill and you don't see anything about the financial crisis.
One person doesn't say anything about the entire society.
And if you study a spray, you wouldn't imagine the beautiful flowing patterns of such a swarm visible.
Look, a simple, a non-complex system, which can be very difficult, very large,
but simple, you can understand and predict that by studying the parts.
For example, a lock and a key, you can look at it and say, well, I can certainly predict it, I'll put it in and I'll turn it on or not open it.
Sort algorithm or the new tonic, meganica, I throw a ball in the air and then I can predict that it will also come down again in so many seconds and so on.
And in complex systems that can not be fundamental, you can't predict by looking at the parts,
those parts of the system that interact with each other and the environment for a long time.
They are heterogeneous, one part is the other is not, they are a bit unique or each part is different.
Think about society, each person is different, think about the financial market, each investor is different, big, small, professional, and so on.
And changes are not linear, as in exponential growth, phase transitions, tipping points, that kind of things you see in complexity.
And all that makes it impossible to predict each other, I don't want to say difficult, but impossible.
And you see that, for example, in the weather, you can say something about tomorrow, maybe in two weeks,
but we really have no idea what it is in March 2028 for the weather.
And you can say, yes, there may even be a sort of fundamental natural problem on the ground that you can't know from all the parts in the universe the state.
Because if you know it, it will influence you.
If I would know that, I would go to the market now.
I think so.
And what you see in complexity is that very small changes in the starting position for a totally different end result,
well, you might know that as the butterfly effect.
All right, that's a very short summary of what complex systems are and why I think it's boring.
I think it's a very interesting thing and they often look nice, for example fractals, crusted lines and so on, I know it.
Financial markets are also such a complex system with all kinds of players,
I already said it, all kinds of different players, big, small investors, naive and sensible investors,
flyers who trade on milliseconds and long-term investors who hold on to something for 30 years, so some people give their shell or KLM parts to their children, you know?
Honest players and generous players all interact with each other to buy and sell each other.
And that manifests itself in an order book, where you then offer and sell prices.
For that price, it used to happen in a pit with open-out crates.
50 euros for, you know, team fat oil.
So first you have the order book, where the intention is to sell and sell and then ultimately results in a list of transactions.
And that's all the deals that are closed, on chronological terms.
And then the last one in the list of transactions is the course, that's the current course.
The current course is where that gene is traded for the last time.
And this is the essence of a financial market.
And you have that in incredibly many kinds of things, in all kinds of places in the world and in all kinds of points in time.
Because the financial markets were already there with the old Egyptians.
And, okay, this is it then.
And the idea of technical analysis is that in all kinds of markets,
in all places where people interact with each other, there are certain patterns visible.
Like the wind, everywhere in the world, at any moment in history, the same patterns are left behind in sand dunes.
And that's just a kind of result of the nature, you could say.
And what you see in financial markets is that even if you have the same kind of brains and psychology for thousands of years or more,
if you let them interact with each other, then there are certain patterns.
And now you might think of patterns in a graph, but it's about patterns in the data, patterns in behavior, actually in the first instance.
Or patterns, overmoots, but also fears.
That's right. So accumulation and distribution, there are terms that you might see in the graph before you.
Trends and ranges, so a course is on the rise, a course on the decline, and a course is a time, less or less the same.
Excavations, false excavations, capitulations, then you have that fear, panic, or blow off, pop it.
Yes, then you have something about the hapsucht and the foam.
In the old Egypt they thought, oh my God, the price of tar is really high now.
If you look back 100 years, 150 years, this kind of thing will also be described.
From the old Egypt, of course, there isn't a lot of documentation, but there are courses with, for example, the Ovestromus Ciclus of the Nile.
So there are certain other powers that were of course influenced by it, which is logical.
But now we have Donald Trump.
Yes, and now we have computers, and we have the internet.
But we didn't have that 100 years ago, there was no Donald Trump and no computers and no internet, but we see exactly the same patterns.
That is very interesting.
And whether it is a super professional market, where only experts can handle certain areas,
or a, say, a Haas Casino market, you see the same patterns.
And that is of course interesting that it is like that.
You can just notice this, it's remarkable that you see that.
Okay, and then there comes a technical analysis that says, okay, if that's the case,
then the goal is to recognize those patterns and basically do statements about the future.
Because we have already noticed that in a complex system, that you can't know the future.
You can't know what is happening, but it doesn't mean that you can't do any statements about the future.
You can say something about the future in terms of chance and probability.
And that is, and we always talk about that in probability, never in security, and so on.
Because that's what we hear about complexity.
I think that's the essence of what technical analysis requires,
because based on what is happening in the market now, if you put people together and let trade always happen,
then they can recognize their statements about the future and do something about it.
And there are a lot of, let's say, methods and indicators and visualizations.
They are all ways to process that same data as a person, or as a computer.
Yes, and that happens all the time.
We have a lot of kinds of analysis, Bert.
I often hear fundamental analysis, the chain analysis, the analysis of sentiment.
How different does that all that thing I just mentioned, than technical analysis?
Yes, so those are different ways to say something about the future.
I mean, fundamental analysis, then you really look at the nature of what is going on there.
So what is fundamental analysis is also different per market.
So if you talk about shares, then you look at the company and their earnings,
and the quality of the management, and the market where it is active, and all that kind of stuff.
If you talk about Valuta, the course of coins, then you look at the relationship between economies.
How the economy develops, and how the rates develop, and that has an influence on the exchange course between two coins.
So that is the fundamental side of looking at Valuta market.
If you look at the raw materials, then you always look at the question of an offer.
And that often has to do with investing cycles and so on.
So how much is taken out of the ground?
And often it takes, if you take more out of the ground, 10 years before you really take more out of the ground,
then you can look at the application side, at the question side, how much is it then?
And there is a picture of the future of a raw material.
If it is about oil, then it is often what the OPEC has decided on and so on.
But that kind of, that kind of fundamental reasoning about raw materials.
Yes, adoption of a certain technology, say, oh hey, this technology, it's first 10 million people, 20 million, 40 million, 80 million, just 60 million.
Yes, adoption curves. Well, in some parts, take stablecoins, tokenization, that are a Bitcoin as digital gold.
That are actually money, especially in a technology, in which you see that there is a certain adoption curve ahead.
You can put them next to other adoption curves, and based on that, you do make a statement about it.
Well, then I expect that to continue in this way.
And then you make a fundamental statement about the future of the use of Bitcoin as digital gold, or the use of ethereum network for tokenization.
The problem with that is that you always have to make a statement about what does that mean for the core.
So if you say, well, I do expect that tokenization is going to be really, really important, and stablecoins and tokenized stocks, very nice.
But where is the value that is created, then caught? Is that in the asset, the price of Ether, or is that in the price of all the second layers or all the protocols?
Or is that in the price of the part of the JPMorgan or Tether, you know?
And that's fundamental analysis, that's pretty useful.
If I look at Bert de Belegger, I have Bitcoin in my portfolio, also because I believe that Bitcoin will be adopted in the next 10, 15 years, if it is digital.
It will be used by people in the world of the eight billion, it may now be a few hundred million, that there will be more soon than now.
And because there will be 21 million Bitcoin, higher courses will be added, and that is the investment hypothesis for the long term.
And that's a fundamental argument, one technical argument.
And that is certainly useful for de Belegger, the trading trader couldn't care less. Sometimes a trader uses fundamental arguments to expect volatility, let's say there is a quarter note, then we are going to go there and trade a bit.
But then it's not really about what he's expecting, but more about that volatility. So that's an investment thing.
So that's one form of analysis. Sentiment always sounds a bit like the emotion of the day, but sentiment goes, I think, in the financial market about risk readiness.
So how much risk sentiment, how much risk does Belegger want to have in the books? And what does risk mean? That differs from particular Beleggers to professionals quite well.
I think that the particular one has to do a lot on the outside, based on fear and that kind of emotions. And professionals see that it is also quantified with the economic models.
For example, say risk, you can measure that with volatility. And if the volatility takes something, then it takes more risk space in my portfolio, then I have to have less of it.
But those moments of app inflation are very clear in crypto, in tega shares. So I think we really had the app, but now there is something on the way back.
Yes, so those are action and reaction-based things that follow each other sometimes.
You can still look at, for example, a kind of secular context, so make economic geopolitical things.
For example, things like demography and productivity and debt and globalization and that kind of thing, that is not per se fundamental analysis of the market itself, but more of the context around it.
And those are all facets that are useful as a Belegger to form a picture of how I am going to control my power, how I am going to allocate my capital.
That is of course a bit professional term, but just as a normal particular.
And here is something sad, I actually think that you as a citizen, as a company, should be able to transport your ability or the purchasing power of your ability into the future with the help of money.
I actually think that the most important function of money is that if I now have all the energy I have with me at work, then I don't want to get what I can buy for it.
I actually want to be able to transport it over 10, 30 years.
That sounds like a salesman.
Well, I think that that would be very healthy.
Yes, that is possible.
And that is possible with euros and dollars no longer in the past 10, 20 years.
We have become a Belegger.
We have become a Belegger to take risks.
And because savings provides less on rent than that inflation is high.
If you save for a house, then the inflation is not even the right measure, but you have to think about it at 6%.
So that is difficult.
There is a group of people who actually have no trouble here.
Those are the people who live from salaries to salaries and have a rental house, so they have no power.
So that's fine.
So that's a small group.
For them, the most important step that they can take is to build a buffer.
And that can be fine in euros, because that buffer is only 6 months long.
But it is quite a large group of people who are forced to do something with their money.
Yes, they can sit in the middle class.
Yes, people who receive savings, who sell a house with profit, who get a profit, a large profit to 20 years of service,
who sell a company, there are all kinds of moments where you can suddenly sit with a few tons or a half million or a million
and think, well, that's a lot of money, but think about how much you need to be able to do it with passion at the moment.
And then you suddenly have the responsibility to make sure that the buying power of that ton or that million,
that it is exactly the same amount of money that you buy in that period of 30 years, and that is bad.
Whether it is the people who don't have a house, but do want to buy a house, never.
That's even bigger than that.
Nice, Bert, that's fun.
Yes, but then you suddenly have the responsibility, that doesn't mean that you have to stop working, you have to become a trader.
And that's actually a lot of people who don't have a lot of money, but quit, because to be a good trader,
that will be a huge risk management in the first instance, an iron discipline,
the ability to not go underground to your emotions and sleepless nights, and to behave incredibly well.
And that's very difficult.
And a nice Twitter account, nice couple of courses.
So for a lot of people, you know, is it purpose to invest?
I want to keep that power at least as a buying power in one way or another.
And then the question is, okay, what are the useful tools there?
Fundamental analysis, that says something about where I invest in.
Make an economic, geopolitical context.
For example, which tax categories are interesting.
For example, obligations, that's actually, I call it now "return free risk", instead of risk-free return.
Yes, you have a certain risk, but you have less life than inflation.
So yes, fundamental analysis, make an economic context,
maybe sentimentality, because less relevant to the common tax.
And technical analysis, yes, that can be useful.
But then above all, to prevent anything from going to zero.
To prevent you from getting into the top, and also prevent you from getting out of the ground.
So maybe, yes, and maybe to keep a kind of feeling where you are now investing.
So for the common investor, that is actually why you would want to use the technical analysis at all.
Or are you doing something more intensively, because you think it's just super fun?
Hey, you can be your hobby, or if it's your job, then technical analysis is going to play a bigger role.
And then it depends more on, so you could say, what do you have at Teyana?
That's a scale of, yes, maybe say something about in-and-out moments, to a very important goal.
But we can say that astrology for men, technical analysis is still called that.
Line drawing on a graph, that's too short a curve.
Because you just explained to us, actually, we are involved in trying to bring people in markets in images.
Yes, but I think that T.A. in the beginning indeed is astrology for men.
Yes, so I'm going directly into that, if people say T.A. is astrology for men, then that's right.
Because men give a graph and a goal to draw a line, and a man draws a line.
Yes, and he has the meaning.
Yes, technical analysis is just a serious instrument.
If you think about probabilities, it works with scenarios, it deals with your risks, it combines with other perspectives.
Otherwise, you are looking for an oracle, a magical truth, a prophet who tells you exactly what to do.
If I draw a line here, the curve won't come up, you know that?
If you look outside, you see a dog in the clouds, or a face in the clouds.
Yes, people are so incredibly good at that.
People are a kind of patron-recognition, not only in faces in the clouds, but also in the noise of the sea.
You hear voices in there, and in music played in the background, there is a message.
Sure.
People say, but that's useful, because our ancestors lived somewhere in the jungle.
If they heard something, they could only think better than if it was a mountain lion.
If it was 9 or 10 times, it was nothing, but the only time it was really a mountain lion,
they made sure that your DNA was in the right pool.
So you could say, the lazy ancestors, who thought that there would be nothing,
who didn't have such a sharp patron-recognition, overactive patron-recognition,
they all filled out of the right pool.
So we are, as people, we see patron-recognition, so give a man a graph,
then he sees patron-recognition, and he draws lines.
It actually looks, if you do it a bit better, very professional.
Yes, one of the most professional people you know.
And then you tell a nice story, and then everyone still believes, you know.
So yes, I agree with that, from the astrology of men, yes, that's a big risk.
A big risk, that people just do something, and then tell a very nice story,
and that people then believe.
While, in terms of analysis, it is an instrument,
with which you can connect to scenarios, possibilities.
And that is, of course, a bit less sexual story,
and then say exactly, well, Bitcoin is then, so on and so forth, you know.
October 25, 2015, we saw the top.
Exactly, exactly.
It is also super attractive, people who see a graph,
and someone who tells something about it,
gives a kind of feeling of control back in an uncertain world.
Yes, also real investors are of course from all times, that is also weird.
So in the end, yes, it also ensures that there is a lot of rumble.
After the financial crisis, a lot of criticism came to the economy.
It would be too abstract, too little social,
and not help to understand large pieces of this time.
Let's get to it.
In the podcast series "Economy in the Class" we make
Elisa de Weerd and Koen van de Kraats the balance on.
We dive into economics education on all education levels.
Economy in the Class is now being heard in your favorite podcast app.
But okay, we are talking about a technical analysis.
It is already part of astrology for men,
and if you really make that list, then you do have something to do with it.
What are things that you can't catch per tenent in a technical analysis?
You still have influence on it.
Well, look what technical analysis does,
is a kind of going through the movement that has already been caught.
So it is a kind of logical action-reaction.
And what technical analysis cannot do, is to predict external shocks.
I think that is the most important thing.
So imagine that you have a source market,
where you have a lot of cyclicity,
based on fundamental factors,
such as the production, the economic cycle, that kind of thing,
and also based on the psychology of the traders,
whether they have been greedy or frightened,
maybe some manipulation of the market by all the players,
and then you can talk a lot about scenarios.
Until then, a pandemic breaks out,
or an earthquake, a complete supply chain is shut down.
A black swan, a fat tail of the probability distribution,
that happens there, and suddenly you see a shockwave change.
That is not going to be predicted by TA, that is going to happen.
It can be that you can prove a price level with TA,
or that, very well, that it will stop there,
because there is a certain way to respond to a certain demand,
on a certain course, that is understandable.
I think that, for me, that is always a goal,
that if I do something, if I search for something in the data,
I can also explain what mechanism is behind it.
And then there are a lot of logical things in the market.
If you think of Bitcoin, if I think of Bitcoin as an investor,
then I have very strong emotional feelings at certain price levels.
That under 100,000 is one, maybe because the amount is around,
but also around 60,000, 20,000, 6,000 is for me,
also because we have been there for a long time.
20,000 was the top of 2017, 60,000 was the top of 2021.
Look, it also happens often.
For example, I always think that people have a kind of collective feeling
of now something is expensive or now something is cheap.
That is also research done,
but you can also ask people who are in a certain market,
for example, take gold.
Gold is of course the last two years greatly increased in prices,
and then in March the price went above $3,000 for the first time,
and in October above $4,000 for the first time.
And then there comes a point where people have a collective feeling,
this is very expensive now.
And if you would quantify that feeling,
then in all markets there comes a sort of the same point
where people have the feeling that now something is very expensive.
And if you visualize that,
then you can catch that in the distance of the course
after a significant average.
Because a significant average will of course go much less fast
than the course, because it actually takes the average
of the course of the past X time.
And so the course now goes up,
and it takes a while for the average to come up,
and the distance between it is very large,
and then the course is now much higher
than it has been in the past period of time,
then you have a feeling that it is very expensive.
So you can quantify that kind of shared experiences and feelings,
so if you say, I look at the distance between the course
and a significant average,
and you can use that in the momentum strategy or something like that,
and then you say, OK, but what does that mean?
Well, that's about a collective feeling of something is something expensive, for example.
And it often has to do with how much unrealized profit
are the investors, because if you first come up with a certain course,
then it implies that everyone is at that moment on profit,
because you can only buy it at a good price.
So there is also a point, and we know that,
at such a large percentage of unrealized profit,
people get the desire to take profit.
Well, the exchange director of FD has already paid for a high price.
Yes, that's a kind of word.
And that's why, if the exchange starts at such a high price,
then it's not weird that it finds support on a certain point,
and I often use Fibonacci retracements for that.
And how does it come about?
Well, there comes a point somewhere,
and it's a course of gold, for example,
now 44,000 dollars a week, 43,000 dollars,
then it goes back, then there comes a point
that the unrealized profit is a bit doomed again.
I think, well, I'm not going to sell it now.
Now I'm waiting for it again.
So there are all kinds of things behind it
that are also recognized, as you said.
And just like the reflectivity of Markten
on the way to high or low,
George Soros wrote a lot about it.
The idea is, Hoes, I'm not going to sell it today,
because tomorrow I'll get more for it.
I'll wait for a while.
I'll wait for a while, because I'm not going to sell it now.
I'm going to wait until it's, you know, it's rising.
It's rising now, so I'm waiting for a while.
If everyone thinks the same thing, then the course is also rising.
And until the point that everyone thinks the same thing,
you see that rise, that intensity,
you take something off, you think, yes, this could be false.
Now I'm going to sell it quickly, that's the feeling,
and then the image is often called up.
The music goes out, and there are too few chairs.
That's the image language.
And then the course is going to go down.
It's very logical that this reflectivity occurs,
because there is a very logical mechanism behind it,
and that makes up a pattern in terms of graphics,
what you call a parabolic rise.
And if you go down there, you say, hey, it was a blow off top.
And if it's a daling, a parabolic daling,
you say, hey, this is a capitulation.
So, on the patterns that you can visualize by drawing,
or by measuring with an indicator and a value to know,
behind those patterns there are logical behaviors of the market.
And I like that, because every Sunday you make a video
for the Satoshi Video channel, I think.
YouTube, for sure.
And this time you talked about the handbrake.
I used it to look at it.
So you talked about moving averages,
what you just explained.
And there you spoke about the words or the meaning.
It's a tool, but it's not perfect.
How are you going to deal with this story?
You probably have the scenarios,
but it's...
You actually know in your head that those moving averages
can also be like this, but they're not exactly the same.
Certainly, yes.
So, now it was very specific about the question.
About Bitcoin.
And at Bitcoin, we got used to the phenomenon
bull market and bear market.
And that is a cyclical bull and bear market.
I think you can also say that there is still something
like a secular bull market.
That is, Bitcoin has only made a secular bull market.
And because every top, every bottom of every bull market
is higher than the previous ones.
And do you know what it feels like
if we have the secular bull market once in a while?
If we have the 288 convertibles in the world,
or maybe around Bitcoin.
Or the big depressions or something like that.
Fortunately, we still have a secular bull market.
We have a kind of, we have a cyclist,
a exchange of bull and bear markets.
And that was in the early days of the halving cycle.
That was halved every four years.
And that is then a sort of...
Well, yes, that is a kind of phenomenon.
Because the bull markets are phenomenal rises.
And the bear markets are phenomenal halving cycles.
Last time it was 77 percent from the top.
And no one was 85 for that, but you have to imagine.
80 percent halving from the top.
Then the course has to go back 5 times
to come back to that top.
So 80 percent, that sounds...
You think, what is the difference between 40 percent and 80 percent?
That sounds like twice as much, but it's really, really deep.
So there is a kind of strong desire
to participate in the bull market.
And not to participate in the bear market.
So what...
And understandable.
So what you want is to identify
what the bull market circumstances are,
what the bear market circumstances are.
So far, the bull market is also a rising trend
on the weekly graph.
Trends, the concept of a trend.
That is also something from technical analysis.
And the definition of a trend in the market is
that you have a trend of higher tops and higher bottoms.
That's actually primary ownership.
And you could say that an important secondary ownership
is that the market is above a certain average,
a certain dominant average light.
And it's always looking for a market,
which average is now...
He's now dominant, what length does he have?
How many days, weeks, months?
And that can of course also change over time,
because the characteristic of a market changes.
I had in the video Sunday
also the S&P 500 show after the Second World War.
For a few decades,
you have a period of about four years,
I believe, in the middle of 49 months,
where you also see such cycles.
Not based on the halving, of course,
but about four years.
And then in the 90s it becomes a bit messy,
and then from the zeroes, the cycle goes more towards 70 months.
And something happens there.
You can make a separate podcast about that,
but something happens,
which changes the rhythm in the market.
Well, that can happen.
You have a certain rhythm.
So a bull market is a rising trend
in the weekly graph at this point.
Until now, in the last 10, 15 years,
a dominant medium of about a year.
So on the monthly graph, you look at 10, 11, 12 months.
On the weekly graph, 50 weeks, sometimes 55 weeks.
On the daily graph, you often look at something longer,
for example to 400 days,
because on a daily graph you have otherwise too fast a false signal.
Because that's actually what you do,
you say, I want a medium that can be a kind of early indication
that that trend ends.
Because if you come under the medium,
then you are probably starting to fail.
And then you can say,
I take a medium that is very close to that course,
a short medium,
but then it also gives a signal to the halftrack.
And the halftrack may also be a false signal.
Yes, which is still strong.
They are all wrong until it's just right once.
And then you really have the trend around it.
You can also take a very long medium.
You are too late.
Then you just buy it if you are at the bottom.
So it is always an exception.
Between I want such an early signal,
but as less possible mistakes.
And so far, that 50 weeks,
that is about a year,
is that a pretty good, efficient exception?
So you have few false signals.
And if we are there,
you can still get away with it.
But if you use it as a signal,
then you also step out early.
In the sense of you miss a lot of that halftrack.
Imagine that you are going to step out now.
Imagine that we step out at 90.
And so he goes through to 90,
then you step out.
90 out of the 126,
that is a halftrack of about 35%.
But it's a bit different than 80%.
That piece down, then you miss it.
If you suddenly disappear in the meantime,
then you miss yourself.
So that's the idea.
Your question was that it's never perfect.
No, that's right.
Well, as a good technical analyst,
do you actually keep in mind that your instruments
are not absolutely perfect?
Absolutely.
So what you actually do is,
your indicators give a certain probability
to a scenario.
So imagine that you are now asking yourself
that you are making two scenarios.
One is a farmer or we have started with the bear market.
Well, then I would say, you never have 100% on one,
0% on the other.
That does not exist.
But there have been quite a few moments,
say, well, 90%, 95% chance of being in a farmer.
Everything, we are on all data,
now gives the signal, this is a farmer.
And also fundamental.
Of course, you can also make other forms of analysis
in terms of making macroeconomics.
Well, that was also the case with the bear market last time.
If you also started making macroeconomics,
the fat was beginning to rise with the fastest rate of consumption.
We have known that.
Then you also have arguments from outside the technical analysis.
You all put that on a list.
You say, well, I raise the chance that we are in a bear market,
for example, to 80%, somewhere in 2022.
And at a certain point, 90%, at a certain point,
you have to conclude.
OK, you could say, if you have a very specific idea,
for example, that you are in the bear market,
coupled to, at the same time,
having a rising trend in the weekly graph,
then you can, of course, have a moment when that is 0%,
when you know for sure that you are in a dutch trend.
But anyway, it is difficult on trends that you can show
in a dutch trend, but you also have periods
when there is no trend visible.
Then the course changes in such a way,
and then the course goes sideways.
We call it Range Bound.
It is in a price range.
In 2022, it was also called Chop Solidation.
Yes, in the summer, yes.
A kind of consolidation of the price,
which is very, very...
So there was a lot of fear.
So you talk in scenarios,
and you probably know of things
that you raise or lower based on data.
Well, we've talked a lot about the meaning of technical analysis.
I also want to go to the wrong side of technical analysis,
because we are of course in a deep dive.
Well, we are already going deep,
but there is also something on the surface
that we have to talk about.
Namely, the incredible amount of YouTubers, influencers,
who also want to do something with technical analysis.
Well, it's fun to listen to.
If you read the Cryptocast or the Toshiba video,
you are well done.
But if you look for bitcoin on YouTube,
then you only get serious stuff with graphics
and people who go over there.
Why then do they choose technical analysis
for the instrument to sell their content?
Yes, it is of course very attractive.
It is visual.
These are pictures, these are colors.
You can do everything with it.
You can actually choose your own standpoint,
and you can draw the graphics afterwards,
if you want to.
It is not so difficult to draw some lines on a graphic.
At the same time, someone who draws a line on a graphic,
versus someone who takes a year's worth of a company,
to take all of that out about the ratios on the balance,
at one point you think it's cool,
and at the other you fall asleep.
So that's just the attraction in a nutshell.
And tell a nice story and people believe it.
People also want to hear that it goes well with their work.
When they get a hypothesis, or something like that.
What are the big red flags for you?
I'm not saying that every day you are surfing on Bitcoin YouTube.
No, not at all.
And it is also difficult that there is a spectrum,
which we also understand.
Because if you were to do purely technical analysis,
that would be very boring.
Often, quite boring, and quite unspoken, quite nuanced.
Who cares.
So we also try to distill that in one way,
to something questionable, something that is actionable,
something that gives some hints.
And there is also the spectrum of interpretation.
And certainly, I would not want to say it for games,
but to talk about the future.
Actually, if you keep it very academic,
you only present the facts.
Then you leave the interpretation to the reader.
So we also understand that on the spectrum.
You have to honestly say that.
And completely at the wrong end of the spectrum,
there are the real red flags.
Those are people who are sure about it.
100% sure.
Guarantee.
Unusual.
It cannot go wrong.
It will happen.
Precise dates.
Precise courses.
Now or never.
You have to participate.
You know.
Win, rich, Ferrari, Lamborghini, Shell, Orloge.
You know that.
I also think it's better if it happens without underbuilding,
that it's just a kind of data that is going to happen.
Without that.
And also red flags are used by indicators
that are not to be reconstructed.
So indicators, data, lines, colors,
which are proprietary or at least closed,
that you can't make it yourself.
Another thing that also makes sense,
history, it's also tricky.
So tricky.
And then graphically, this was in 2021.
So is it going to happen now?
The four-year cycle is very strong here in Cripto, of course.
We are in the middle.
Correct.
And the difficult thing is that there is a core of truth.
Because every market has a certain rhythm.
And you have to recognize that further.
I took the S&P 500 in the '60s and '80s,
but I took an oil market.
Or you see it everywhere at a certain period of time.
And that is also logical, which you can also explain.
Only the problem of the four-year cycle hypothesis
is an extreme precision.
A metronomic precision of exactly 47 months,
which is a long time, but of the top in the month of '35.
But that's not how markets work.
And what has happened twice, that is coincidence or manipulation,
or a bit of both.
Or a kind of collective self-affirming prophecy.
A collective hallucination.
And it can happen to me quite a third time,
but it says nothing about the future yet.
And that's what you see a lot.
And then people come together and say,
'This is going to happen with Bitcoin in the 1970s.'
'Let's talk about each other.'
And you know, that's a really red flag.
While on its own, the point is, it can happen.
Because ultimately, what gold then did,
was also the dynamic that arises
when people come together.
But you don't have that guarantee.
You could say, 'Well, I did research
on markets that have developed as Bitcoin until now.'
And from the 70 markets that I looked at,
there were 30 that ended up like this.
And then they say, 'Well, OK, then 3/7, 42% chance.'
'Perhaps headache, etc.'
OK, then at least you are one piece more meaningful
to talk about the future.
And if you see someone selling him in courses,
Bert, that would be a hope, right?
Yes, I would also like to add some nuances to that.
Because it depends on what the motive is,
what the course is about.
Look, I know people who really want to explain things to others.
And learn things from others.
They find it super cool.
They have discovered something and created something for themselves.
For example, we had Barry van Dopeykes here in the Cryptocast.
I think these are groups of people who are completely crazy
about playing that game and sharing it with others
and sharing it on a YouTube channel.
That's a good example.
And there are also people who say,
'Come to my courses and then I'll teach you some footages
and then you're a day trader.'
And it all looks very difficult.
A guaranteed win, a guaranteed win for a trader.
Exactly, those are all red flags.
There is no silver bullet in technical analysis.
It's not a magical trick that you learn.
And from that moment on, you can adapt that trick every time.
Then you are winning.
As a trader, there is still something methodological,
something systematic in it, just for Dopeykes.
You just have a certain systematic, if you do that really well.
And there is also a certain talent needed.
And they are often enough next to it.
Yes, but the good thing about a good trading method
is that it is not something that you often find out.
It is because your reward is bigger than your risk
in combination with risk management,
that you are more than half of your setup is good.
Combination of a number of factors
ensures that you can do that on the long term.
But for most people, that is not why they are on the financial market,
to learn trading.
And they just want to say something meaningful about
the one they have in mind.
Please.
We are going to do the last 10 minutes and a quarter of this podcast
for summer guests.
Yes, summer guests.
But I am a trader Bert.
How was that?
No, I am very curious.
You are also a part of technical analysis,
you combine that with a number of things.
How did you put together your financial box,
your instrument box, your financial box?
Is that also in certain methods, how did that grow?
Because we take all the things from you.
And of course you are very reserved and very curious.
But I am curious how you built that yourself.
Yes, I really want to help people understand what is happening.
That is, I think, also with Bitcoin Alfa,
maybe like Tosco Radio, and actually with Cryptocast,
but then also more fundamental areas, what we want to do.
It is quite a difficult process,
it is fundamental, but also the market.
And now we can give a little insight into what is happening now,
so that you can make better choices.
With Bitcoin Alfa we have then chosen to protect and strengthen as a payoff.
I suddenly have to think about the hammer and the dance.
Well, yes, it also comes from there.
You know, people are all like, how can it go so fast?
Why do we care about hospitals?
Yes, that is just calculating people, but that is quite difficult.
For those who are dealing with coronavirus.
And it was actually about the question of if there was a certain disability,
then in the Netherlands the factor of the hospital capacity is limited.
And then you can find everything in the political sense.
But in any case, with each other, getting the truth on the table,
that then something is going to happen, that is step one.
And then of course we did that.
That there can still be nothing in the hand,
but that it is completely different over three weeks.
And then you have a society-wide political conversation
about what you think of it.
And then you can all kind of deal with it.
And that is very difficult again.
I often wish you had an inequality, but that was not possible.
But purely the digital insight of what is happening here.
That is what I like to think.
So I am also always looking for instruments in my analysis
that have certain power of explanation.
So if you say something about what is happening,
that you can also say something about what is underlying in such a market.
So one of the basic building blocks I have is trends.
I find trends interesting.
A rising and a decreasing trend.
Why is it interesting?
Because that's pretty easy to see yourself on a graph.
High peaks, high boulders.
Trends have a tendency to go further to the point that they turn.
So you see, you can say to every top on the graph,
well, this could be the top of the real market.
And that is true, it could be it every time.
But the first five times you have an inequality, the sixth time it is a pass.
For example, your eleventh of the last two financial crises.
Exactly, so trends are interesting.
And then we just talked about the dominant average,
which is visible on all types of time scales.
If you go to the urographic, to the metagraphic, call it that.
In the meantime, you can see that the course interacts with the average every time.
And then at some point you cross that average,
and then you sit under it for a while, you have a decreasing trend.
And then you go up again, you have a rising trend.
That's interesting.
So that's trends.
And if you look at the dominant average a little further,
then you see that if you take the distance between the average and the course,
then it says something about the strength of the trend.
And then you get to the area, that is, my second building block of momentum.
So what you see is that a trend is a kind of swell,
becomes stronger, becomes stronger and then becomes weaker.
And then it goes over in a decreasing trend.
So in a decreasing trend, you can also say something about...
And then you can perhaps say that in the fundamental world,
to the conviction or the attractiveness of such a market at a certain point and that kind of thing.
And then you can measure that, for example, with RSI and MAC, those eight indicators.
We also call them the temperature of the market, right?
Is it loud? Is it hot?
Over heat.
Over heat.
So there is hype that people no longer think about, that people just want to have something to have.
And so you can also make that visible.
Then the trend is rising.
You can say, well, that's in the beginning so positive.
But you see that the market is overheating.
In a rising trend, yes, that is not per se favorable.
Because overheating means that people want to take their sales benefits.
But they don't do that yet.
So there is a mechanism behind it.
So that has a certain power of explanation.
Top and bottom, which I then refer to with oscillators that work with momentum.
Stochastic RSI or a DSS-Bressard, instead of breaking the market structure.
That's another approach.
So the trend, momentum, cycle analysis, I find interesting.
That's actually one of the few perspectives on the market that says something about timing.
The biggest part of technical analysis is about course levels.
So how the market structure is formed.
And that are course levels with supports and resistance and so forth.
And Zyke-Analyze actually says, there is a kind of natural rhythm in the market.
Like a swing of a clock.
Even if you're sitting there, it goes back to a certain time.
And you can destroy that by striking a button.
And you can change it by making the swing longer, for example.
Sure, but there is a certain natural rhythm in the market.
And we can talk about that.
And that's not a question of, well, that's then Monday, so much November, at 4 o'clock.
Not at all.
But it's about having a certain probability to say something about the change of power and weakness.
I find it interesting to add to that.
And next to that, I have a whole series of perspectives that I actually use as a supporting proof.
That I use to look at, is there confluence?
So if you have 20 data points, they all point to the same side.
Then I have a bit more conviction.
Or is it 50/50?
And that can also be seen in the macroeconomics.
Well, I'm actually talking about technology.
For example, you can look at patterns on a graph.
Head and shoulder patterns, cup and handles, double-bottoms, flags, those kind of things, three corners.
Bullflex.
Bullflex.
But look at the point.
Here are books from 50 to 150 years ago.
It was written about here.
On paper.
One of the veterans of Wall Street, Peter Brandt.
Also in Bitcoin.
With his 80s, he's sitting behind his computer with his mouse.
He used to make graphics on paper.
He was working on patterns.
A bullcowsky, wrote thick books.
Not with, well, that's how you can draw lines.
No, that man has looked at thousands of markets and then looked at it.
Okay, if I define such a pattern carefully, where it has to be done, without that pattern,
if I see it, how many percent of the time it spreads up and down.
And then you get behind it, that such a three corner, for example,
67 times percent of the time it spreads up.
Not 100, 67.
Or sometimes 58 percent.
That's almost 50-50, but just a little more.
That's the probability.
So patterns can be very interesting.
Correlations are interesting.
I look at chain metrics.
So that's specifically for the crypto market.
You can't share that with crypto, but with crypto you do.
You can say a lot about the behavior of investors.
Are they taking profit?
Are they realizing losses?
What kind of points are coming in motion?
How old are the wallets that come in motion?
How big are those entities that do something?
So that's interesting.
I use derivative data.
So we see that on futures markets.
The open interest star, the funding rates.
It says something about which side of the country is positioned.
For example.
So they are all a kind of, I often call it supportive proof.
So you say, well, a lot of my technical things
show that side.
And I also see in the derivative data.
And I also see in the chain data.
And then, well, that makes sense.
And then you can say, with some more probability,
probability, I wanted to say more security.
Of course, weird word in Dutch, but with a higher probability
you can say something about a scenario.
Yes.
But it seems to me at the outset now a very difficult period
to imagine that now, for example, in my study,
that there are quite some witnesses on the left and some witnesses on the right
or for example, light on green and on orange and on red.
That's right.
And that was, for example, in early April, different.
So in early April, the players also arrived at the 50-week average.
That was after the trade war of Trump.
75,000 or so.
Yes, 74,000 from Iraq and Iran and Israel.
Yes.
That period.
And we arrived at 74,000, something about 150 weeks average.
But in a lot of other indicators, they were just
on an intact bull market.
Yes.
And now we have come to the same point.
But I see more data that still shows a little more
on the possible transformation of the trend.
There are really very clear distribution patterns around that, let's say,
$123,000, $24,000, $26,000.
The price reaches between $120,000.
The Barrage Divergence with RSIs.
Momentum indicators that just give a little less power.
Unchain data, in which there really is a strong distribution.
But also, for example, a microstrategy part that already has acceptance
of dominant means.
It is also such a small piece of support proof.
You think, well, that was also a kind of foreboding on the facts last time.
And now we just talked about, last time that doesn't say anything.
The result doesn't have to be achieved.
But it can be fundamental that speculators,
that speculative money is fuel for the passing of a bull market.
And if that is already removed, then a bull market can still go on for a while.
But, and so forth.
So now I see more indications for the end of the bull market
than in April or September last year, when we were also on that 50-week average.
So yes, that's how I use those different other data points to look at,
I see this in my primary instruments, I see that there too.
Or not.
Nice.
Well, I think we all know you better than a technical analyst.
As a human being, maybe.
High-class or whatever.
Have you done anything yet?
Or are we going to the tea?
We're going to the tea.
No, I don't think so.
I think we've mostly touched on that.
Then we're around.
Then we're at the end of this CryptoCast.
Thank you, Bert Schlachter, analyst at the Kennis platform BTC.
I have already mentioned you at home analyst Des Falerland.
Something like that.
A lot of scary times.
We're going to see.
Thank you anyway.
Don't forget to share this CryptoCast with your followers on X
and then use the
[email protected].
Make a beautiful review on Spotify and like, subscribe and comment on your YouTube.
Until next week.
The Crypto Exchange by Bitfavo
PodcastTranscript AI