Bitcoin analyst Ivan discusses the rejection at $74K and the path of least resistance
Ivan on Tech presents a solo Monday morning Bitcoin and markets analysis.
Summary
Ivan on Tech delivers a Monday morning market update focused on Bitcoin's rejection at the $74,000 level — the prior year's low — which he reads as a sign of weakness rather than strength. He argues that both bullish and bearish news have failed to break Bitcoin out of its current range, making the chart the only reliable guide. Ivan contends that the path of least resistance remains downward, pointing to bearish trends in stocks, high oil prices constraining Fed rate cuts, and weakness across altcoins including ADA and DOT. He also covers a public dispute between Justin Sun and World Liberty Finance, in which Sun alleges that a backdoor blacklisting function was secretly embedded in the protocol and used to freeze his assets.
Key Takeaways
FULL TRANSCRIPT
Bitcoin rejected at $74,000 — reading the range
Ivan: Good morning. Look at this — Bitcoin just got rejected by the $74K level, which is the last year's low. This is not a sign of strength. At the same time, each and every Monday, Trump comes out with something bullish, so we may get another pump and dump here and be in this range for a few more weeks.
This is very interesting, because whenever he has anything bullish, we pump but we don't break out from the range. And then whenever there is something bearish — like the other day we had failed negotiations — prices drop, but still we're within the range. This is why looking at the chart is so much better than looking at the news, because the bullish news didn't really matter — we did not break out. And the bearish news currently doesn't really matter too much either, because we did not break down. We're still within the range, and we have to see it for what it is. As long as we're within the range, you can ignore all of the news. They literally don't matter.
Should we break down, we have the big flush into the buy zone towards the 200 exponential moving average and then below into the buy zone — that's fantastic. Should we break to the upside, you have a nice long until the next resistance, which is likely to be a lower high at approximately $86,000 — that's a 16% move up, a fantastic long, especially if you know how to trade with leverage and know the mechanical rules.
But the path of least resistance is still down. I have to be honest with you. The path of least resistance is down because we're in a bear trend, and because stocks are still in a bear trend. Look at stocks — stocks did not close in a bull trend. They just got rejected by the bear flip. Now this can change this week. We have a very close eye on stocks because they can go into bull trend, and this will of course bring a bit of bullishness to Bitcoin as well — although not necessarily too much bullishness. We'll just have to see Bitcoin separately, and we have to separate stocks and Bitcoin in our analysis.
Stocks and crypto don't move in lockstep
Many people who look at stocks think Bitcoin is going to do the same. But if you look at the stock market here since October — this is when we went bearish on Bitcoin, Bitcoin was at $126K — then here in February, Bitcoin was already down 30 to 40%. Stocks went up, and now stocks have been a bit sideways. Bitcoin is down 50%, now it's a bit higher than 50% down. But you see, stocks and crypto don't have to go hand in hand. In fact, most of your portfolio can get destroyed while stocks are moving up. The S&P here since October went up, while altcoins went down 80 to 90%.
So yes, it would be bullish if stocks went up, but it's not a guaranteed propagation into crypto. The bullishness may or may not propagate into crypto. That's why we have to look at crypto charts separately. We look at the Bitcoin chart separately. We look at the altcoin charts separately. If they tell us they want to break out, great. For now, because Bitcoin is in a bear trend and the S&P did not go into bull trend, it's just another confirmation that the path of resistance is down. The NASDAQ did not go into bull trend last week either. Let's see if it can do it this week.
When you look at the stock index IGV — and for all of you who are new, big welcome, we have many new people joining — we're trading quite exactly. There is a bit of a divergence now, and it's going to be interesting to see whether Bitcoin follows through or decouples. You can see software breaking down — the blue line — while Bitcoin is holding up. For me, that's another signal that the path of least resistance is down for Bitcoin. Tech stocks are taking another dip while Bitcoin is still holding on. Is it possible that we see divergence and they trade in different ways? It is possible. But as you know if you follow this channel, we don't really care about what's possible, because anything is possible. Literally anything can happen. We care about what's likely, and we never want to be in a situation where the cards are stacked against us.
The importance of compounding and capital preservation
We always want to rig the game so that the cards are stacked in our favor. That doesn't mean we will win 100% of the time, but over time — the more trades we take, the more we survive, the more our capital grows, the more our networks grow, the more we'll be able to participate in different markets and different upsides and be here long term. That's the most important thing you need to understand: compounding.
As long as you can stay in the market, as long as you can survive, as long as you can compound your wealth, it doesn't matter whether you buy the exact bottom or sell the exact top. As long as you capture a good portion of the move, that's fantastic. As long as you preserve capital so you can buy when everything is down 90% — altcoins down 90%, Bitcoin down 50, 60, 70% — that's how you compound cycle over cycle.
If you blow everything each cycle, you round trip. There is no compounding taking place. And of course the worst is if you lose everything — you just reset your portfolio and round trip to zero, because then you cannot compound. Compounding is only possible if you have money. You have money, you can compound. And compounding, as you know, is the eighth wonder of the world.
So losing everything is very bad. It happens a lot to people who hold an altcoin into a bear trend and think, "but it's possible that it recovers," or "the team has great fundamentals so it will recover." Look at Polygon, for example. You remember in 2022 we were all about Polygon. We found Polygon at a few cents. It went to $23 or something like that — it was fantastic. People still to this day tell me, "Thank you, Ivan, for Polygon last market cycle," because our community rode it all the way up and we sold around the peaks as well.
Now the same asset — in fact maybe even better fundamentals, because they've had more time to build and invest in the protocol — is horrible this cycle. It's been horrible especially since the bear flip right here on the weekly, which was over a year ago. It's down 81%. Fundamentals will not save you if the asset is in a bear trend. You have to run. If you have great fundamentals but the trend is down, the cards are stacked against you. Even if fundamentals are great, they're still stacked against you. So never disrespect the bear trend, and never ask "but it's possible." Never take a bet on whatever is possible when it's the least likely scenario. Always stack the cards in your favor.
Bitcoin vs. prior midterm years
If we now look at Bitcoin versus other midterm years, you can see that we're tracking it quite exactly. If we look at the average, we're slightly above average, but we are below the 2022 year-to-date performance at this exact day — day 104 of the year. The conclusion is the same as before: the path of least resistance for us is down, to basically be magnetized towards the white line, which is the average of the previous midterm years.
Oil, the Fed, and the macro picture
As you know, the most important chart in the world right now is oil. If you look at the GSG index — which is commodities, but mainly tilted towards oil — we will have another pump in the GSG. Pre-market is tracing right now and it wants to go up. Oil is now back here at 104. Last week it dumped a bit because there were negotiations. This week there are no negotiations, and it's up a bit.
Let's see if Trump comes out and says something bullish this morning. I'm expecting something — he's going to try to pump the market. Or maybe not, because the markets are barely reacting now. You need something bigger than a peace deal, because you remember in the past he could say small bullish things and they would move the market. Then they stopped moving the market. Next he needed to say bigger things — such as the peace deal, an actual ceasefire, "we're going to negotiate." That actually pushed the markets to the upside and pushed oil down. Now you need something bigger than that for markets to move. Let's see what that is.
But the chart is the truth. You see the chart here — it's up. Oil is at 104. GSG is at 32, basically back towards these highs. It did not go into bear trend. We were discussing the possibility of going into bear trend last week, but it did not. Bull trend is still intact. And as you know, the reason we look at this so much is because it's going to be tough for the Fed to decrease rates when energy prices are so high. That's why this is a signal for us to be conservative, to be risk-off, to be cautious, to protect capital — because if you don't have capital, you can't compound, you can't do anything.
MicroStrategy below the 200-week moving average
Looking at some stocks — MicroStrategy is opening lower. It is below the 200 moving average. It actually used the 200 moving average as resistance and got rejected down. It is in a bear trend. It is maybe even MicroTragedy. This is what happens when you hold in a bear trend. Don't hold in a bear trend.
Last time it went below the 200 exponential moving average, let me just see how long it took to get back above it. Here it went below it — and it took 62 weeks to get above it. So you can have a year of sideways.
You could argue that this is somewhere where Bitcoin is going to be bottoming out. If we look at the Bitcoin bottom timing, we have this orange box here. It corresponds to where Bitcoin bottomed last time — it had the flash here to $20K, then sideways. It went way lower, all the way to $15K, but we still count that as the bottoming zone because it was mainly sideways. You could say, if you want to be bullish, that when MicroStrategy went below the 200-week, within the coming month or two Bitcoin basically had its final flash towards that sideways consolidation. Maybe something similar is going to happen here — some kind of flush in MicroStrategy, a flush in Bitcoin, and that becomes the Bitcoin bottom formation. We'll see. But the capital destruction has been crazy here.
People are speaking about black swans. Could MicroStrategy be a black swan? We just have to react when it happens. I don't have MicroStrategy. I don't think it's an interesting proposition for my portfolio. I don't like that Saylor is promoting a 10% yield. It's too much for me. It could be a black swan.
World Liberty Finance and the Justin Sun dispute
Another black swan potential is what's happening now with Trump coins, World Liberty Finance, their lending protocols, their DeFi, and things like that. There is a big conflict now between World Liberty Finance and Justin Sun, because Justin Sun is basically saying that the Trump family is using World Liberty Finance as a personal ATM — using the crypto industry as a personal ATM.
He's saying: "I'm calling on World Liberty Finance to publicly disclose who controls the single guardian address and the three-out-of-five multisig that govern the smart contract. Early investors have the right to know who holds the power to freeze assets." By the way, they have frozen a lot of his assets.
Here is a summary of what's happening: the original token was deployed in September with no freezing function. Then they added a freezing function. Then they froze tens of millions — if not hundreds of millions — of Justin Sun's assets. Now there is this public battle between Justin Sun and World Liberty Finance.
Here's what he said a few days ago:
"I have always been an ardent supporter of President Trump and his crypto-friendly policy."
But then he goes on to say they added the freezing function, and it went from a decentralized platform to something else — which was never disclosed to him or any investor. He says World Liberty Finance embedded a backdoor blacklisting function that they started to use. He states:
"Every action taken by the World Liberty Finance team — to extract fees from users, to secretly implant backdoors, to use the community as a personal ATM — all of these actions are illegitimate and were never authorized by any fair, transparent, or good-faith community governance process."
So many people also don't like Justin Sun. They think Tron is a scam. But you just have to look at the chart to see for yourself. I think that's important — the charts speak for themselves. You look at the Tron chart and it's super strong. And by the way, I have no Tron. I have no altcoins since October. Since October I have zero altcoins. I have no financial interest in speaking about Tron. But you can see for yourself that Tron is one of the strongest charts, despite what the ETH podcast crowd or ETH maxis or Bitcoin maxis have been saying — they've all been calling Tron a scam, but it's one of the few coins that has actually been able to perform so well.
Altcoins breaking down — DOT, ADA, and the fundamentals trap
Then of course you look at World Liberty Finance — down and down. You look at other things that have crowded themselves in fundamentals. Look at DOT, for example. DOT is fully obliterated, going to new all-time lows right now. It's actually breaking down. And if you have listened to the pride that these communities have about the tech, about this and that — then you look at the chart. For comparison, this is the Tron chart. And this is the inverted chart. You see — that's why, again, fundamentals will not save you. Only price trend will save you.
DOT is breaking down. Literally, price is converging to the downside. ADA is very similar. They're so proud of their coin, so proud of the fundamentals. I don't know what they're proud of, but it's breaking down. Should it break down — which it kind of wants to do right now — you have a very nice short here of 30 to 36% until this level right here, which may serve as support. Let's see what happens there. Not looking good.
So yet again — look at the chart. Don't look too much at the narrative. And there is some kind of black swan possibility with either World Liberty Finance or something else. I don't want to discuss that too much before it happens, because at this point we don't see any super clear signs. We just have to see — in case something starts unraveling, then we react. And we also know that if something black happens, it's a bottom. FTX was the bottom. Something bad happens — don't be sad, don't worry, be happy. It is the bottom. The risk-reward is very nice when you have such a scenario.