2023-04-06 09:00:00 ET
Summary
- Our guest this week is Ryan Wilday, the founder of Crypto Waves Investing Group.
- Ryan lays out his support and price target for Bitcoin and Ethereum.
- He provides insight into the trading strategy they use, and touches on the correlation of Ethereum and Bitcoin with altcoins.
Editor's Note: This is the transcript version of the previously recorded show. Due to time and audio constraints, the transcription may not be perfect. We encourage you to listen to the podcast embedded above or on the go via Apple Podcasts or Spotify . This episode was recorded on April 4, 2023. |
Ryan Wilday, the founder of Crypto Waves Investing Group, lays out his support and price target for Bitcoin and Ethereum. He provides insight into the trading strategy they use, and touches on the correlation of Ethereum and Bitcoin with altcoins. Relevant Links: Timecodes: (00:49) - What is the state of Bitcoin? (07:03) - What is the current correlation between Bitcoin and Ethereum? (08:39) - Ryan's history of trading cryptocurrencies (09:20) - Is this a new bull market for cryptocurrencies? (11:49) - What's your take on the US Government going after crypto? (14:41) - Advice on a starter position (19:46) - Bitcoin's Price Target (20:30) - Ethereum's Price Target (23:29) - What is the current Elliot Wave Count for Bitcoin? |
Transcript
Daniel Snyder: Welcome to Investing Experts. I'm Daniel Snyder. In this episode, we are joined by Ryan Wilday from Crypto Waves, an investing group on Seeking Alpha, centered around cryptocurrencies and crypto-related stocks. Ryan has many accolades under his belt, with over two decades of experience in the markets. We're getting down into the nitty-gritty numbers for support levels and price targets on Bitcoin ( BTC-USD ) and Ether ( ETH-USD ) on this episode as a sneak peek for you.
But before we dive in, if you're enjoying the show, this episode, the guests, let us know. You can follow Investing Experts on Seeking Alpha, Apple Podcasts, Spotify, you can leave ratings on your podcast app of choice and engage in the comments section of the show notes page. We just love hearing and hanging out with the best and best seen audience in the world. Now let's get to the interview.
All right. Ryan, let's go ahead and kick things off, dive right in. What is your take on the overall state of Bitcoin right now?
Ryan Wilday: I mean, I think we've had really interesting action. I mean, your - the subscribers of Seeking Alpha would have seen Jason and my somewhat bearish or cautious arguments - or sorry, articles over the last couple of months. And what has happened is during that time or in between some of those articles, Bitcoin has broken over a key resistance level, which was $27,500. We'd mentioned it in the articles, or at least I have, or Jason may even look at slightly different, but we've both, at least, cautiously, had to turn to respect the least bullish part, potentialist market.
I mean, sometimes when you write an article, whether you say it's - you're looking down and cautious or the opposite, I mean, position sizing for me or position in trading for Bitcoin is - generally is different levels of long and I'll occasionally take short trades to hedge my overall long position and I fill cold wallets. I use the bear market to fill up my cold wallets. So it's been a very good market for me, but - so I want to make sure people understand that from a disclosure standpoint in terms of the means of why I trade. But I had to turn from attitudinally, sentimentally from being more cautious on the market to be more bullish.
The other thing we had seen, too, I mean, and that's just chart based. Now you look at what's happened event-wise over the last man talking now about six months. We had the FTX collapse in November of last year. And what at Bitcoin, everyone - I got tweets like, "Okay, what are we going to do?" The crypto market is falling apart. No one is going to want crypto after this. Those are the kinds of things that folks said to me over Twitter or even subscribers I have in my services.
And what has happened that that sparked a rally. And rallies often start when the sentiment is the worst. I often tell my subscribers that the worst news happens at the bottoms. The best news happen at the tops, that's just the nature of markets and sentiment. But I didn't necessarily assume that was the bottom at the time, but it continues to develop. It developed into hitting our resistance point at 27, and then we had the Silicon Valley Bank collapse recently on top of the Silvergate Bank collapse, which is probably more important to the crypto space since they serve a lot of exchanges and more rally.
And so I think we have a state where, if you know the crypto history or the Bitcoin history, you know that countries that have had serious economic problems have often [run to big] ((ph)) crypto, Zimbabwe, Venezuela, even Hong Kong, which wasn't so much of a financial crisis, but a crisis of freedom as China moved into to take stronger control over it. And capital moved out via Bitcoin of in all of the situations.
And I think we've seen our first little taste of that event in America if I was to pinpoint it. I don't know, like - but I get a sense that people understand the value of crypto and its - and holding Bitcoin takes you out of the system of intermediaries that happens in our banking system. I can only assume that that's what happened, but regardless of the chart is breaking - has broken over resistance. And as it pulls back so far, it's we call it correctively in Elliott Wave speak, Elliott, and I'll speak, but pulled back, I mean, honestly, barely pulled back when it pulls back.
I mean, that's just - it's a bullish market right now. And so we monitor every level of support that we have below us. We have multiple levels and right now $21,000 - or sorry. $27,800. It's right below us, $21,200 next and then $17,000 after that. $17,000 is where I start to look for new yearly lows. What - right now, it's - we're not even close to that.
We've doubled off the low with all these banking crises with so-called worst events in crypto ever, so to speak. And if I was to listen to some people, some podcasters and whatnot, but it was very much the opposite of what the crowd expected in terms of price action. So yeah. And, I mean, Ether has gone over its level support, gosh, or resistance. I don't remember that offhand, but it's broken it solidly.
Actually, Ether has a far more bullish setup if you look at the daily chart because where Bitcoin gave us a new yearly low in November of last year, but Ether gave us a higher low, which from a technical standpoint, suggest a stronger rally to go. Although Ether, Bitcoin chart is a little bit bearish right now, I think, in the grand scheme, Ether has - is set up far more for ultimate targets.
And what I'm - what I would like to see is Bitcoin rally 225,000. I've asked for that many - for many years now, but a little slow, although it's hit all of my past targets, which I had asked for. I'd asked the market or projected that the market would hit 21,000 in - sorry, 65,000 in 2021, got that solidly. But I did expect the market to consolidate [100,000] ((ph)) to 125,000 and then that that's where it failed. But this set up here could eventually develop that set up again.
So we'll see. As always, my projections work until key levels below break, right? Like I said, I'm looking up, but if 17,000 goes, we have a cascading level support, like I gave earlier. And if 17,000 goes, that's sort of critical and we'll see more yearly lows. So it's always if this than that, but it's looking really good right now. That's kind of the - I mean, I went through that fast if I need to review any of that, but it's looking pretty good.
Daniel Snyder: Let's dive in a little bit further. So you mentioned Bitcoin and Ethereum. So is there a correlation between those two coins right now?
Ryan Wilday: The other - I mean, they're always they have been highly correlated for many years. I mean, they - when I traded, I was actually more active Ethereum trader in 2016, more than I was trading Bitcoin. I own some Bitcoin, but I - but as a trading vehicle, I was more into Ether and they were less correlated back then but kind of related. They're highly correlated now.
I mean, I think it runs 90% on, like, an intraday basis, roughly. I'd have to look. I mean, a correlation is a dangerous game because you can measure it statistically from an intraday, an hourly, daily, you have to look at it from that perspective. And I know, intraday, I think, it's quite high. From a daily chart, quite high, but then you'll see variations like I said earlier, where Ethereum has a higher high - a higher low and Bitcoin had a lower low in November 2022, which is a very important on a technical basis, a very important characteristic in the chart that traders will look at.
So correlation - there's correlation and then there's - you could go out, you can chew, you can break, you can unpack that in many different ways. But, in essence, they tend to move together. With right now, on a lower time frame, the Ether and Bitcoin chart will look bearish. Maybe trying to turn, but it's pretty bearish, meaning that Bitcoin should be ahead of Ether short-term, but that on a daily chart. So you can see the variation in time frame on a daily chart. Ether looks a lot better. That makes sense.
Daniel Snyder: So you've been investing in cryptocurrencies for like a decade now. Is that right?
Ryan Wilday: Yeah. Yeah. Yeah. Definitely - I mean, I have to qualify that because like, my bio will say since 2012, I was just qualified as I wasn't a terribly active trader back then. But I'll just say that the 2016 to 2017 rally changed my financial life. Obviously, I'll just put it that way. Without putting any details around it, it changed my financial life. So I was there for that. And the 2018 took some of that back - but not enough to - I mean, it really set me on a totally different course of life. So I'll just put it that way. Yeah. So it's been a while.
Daniel Snyder: Being the veteran that you are in this space, is this a new bull market that we're seeing unfold right now?
Ryan Wilday: I'll just say it's the early signs and we have to continuously follow through. It sure looks like a turn. And you put this in perspective that if I'm not mistaken, someone may correct, but Bitcoin has never had two bearish years in a row. So if it wasn't a new bull market, it would be historic.
I mean, okay, historic in like how long have we had Bitcoin? 14 years now. But Bitcoin has never had two bearish years. When they had - when basically, the open on the January was higher than the close on December. We've only had that one year at a time. So you would expect it. We also have the Bitcoin halving, which I don't look at from a - because the data points are quite small. We only have a few data points for the halvings, but typically, we're in the window where the mining halving, which is the halving of mining - minor reward.
So basically, the inflation rate of Bitcoin drops on a, I think, it's a four-year cycle. Someone's going to correct me, I'm sure, because I'm - this is not my area of expertise. But we're in the window where that usually sparks a rally, that drop in inflation rate.
So a lot of data, secondary data, historic data suggests, yes. Now I'm just looking for price to continue to suggest that to be true because price is proof. It's not all the secondary data, it's just insight - provides insight, but now it's - prices got to continue what it's doing right now. I mean, just present tense, it's doing what it should be doing for any bull - to bull market to start.
And then as long as it stays over support, then we'll just continue to look up. Yeah. I mean, that's the way it works. Now we have you risk and manage that in a trading standpoint, that that's - there's a lot of different approaches to that, but I would not suggest that everyone go all in. But if you don't have any exposure, well get some, but I wouldn't go nuts. And then I would buy pullbacks and then and just have a risk level where you at least are going to get cut back.
So I would just make sure people be careful about my words and what they - what their actions are because I teach my subscribers day in day out how to manage a risk and harp on these on - on those things. So you don't go all in just because it's a bull market, but it does look very good right now.
Daniel Snyder: So a few episodes back, we had analyst Clem Chambers on, and he was saying that the U.S. government wants to get rid of crypto. Just curious from your viewpoint, are you worried about that at all?
Ryan Wilday: I mean, I think that - well, I would disagree that the U.S. government in respect to single issues like this is hegemony. The truth is if you - is that there are players within the U.S. government that wants to do [away] (ph) with crypto, and there are players inside the U.S. government that are very, very pro crypto.
The question is who wins, right? And I would say that maybe the anti-crypto voices are a little loud right now. The reality about crypto is the only thing that that is going to play into is banking rails in the end of the day. But we're already seeing some - Wyoming is probably the most notable. They're actually creating an alternative banking system that is separate from the FDIC insurance, that's fully deposited and they haven't passed laws.
They passed laws that are pro-crypto in a sense - in the sense of the banking industry, but they haven't passed laws to sort of block like CBTCs and other things that the federal government. So we have a war between state governments - and you can talk about Florida, action in Florida, a war between state governments and the federal government with regards to crypto and banking.
So I don't think that that story is written. The other side of it is in strategy for me, I can't - well, I make a living doing this, so I can't exactly just turn off my living. I definitely have thought about if it gets really bad, I could leave the country and all of that, so I can continue to make a living. I mean I left my previous career to do this, so I'm in.
But from a tactical aspect, I collect a lot of crypto into cold wallets in case I've got to dive out or dip out, so to speak, leave the country if I had to. But I don't - I think it's a little bit of stretch to say it comes to that. I - some people prefer gold for those situations and all of that. To me, that's very cumbersome.
I think crypto works as long as they keep the Internet lights on. Bitcoin is a lot easier. I mean, I'm a digital native, so to speak, well, I transition - I mean, I came into life without the Internet, and I got used to it at an early age, right, and it's just more natural. Now do I own gold? I do, but I prefer to have something that's portable. Leave the country? No one necessarily knows I have it. I don't have to guard it with guns, so to speak, I just have - that's my preference. So it doesn't change that much, but I'm certainly watching these developments very carefully for my own living sake.
Daniel Snyder: So, Ryan, want to take a second. For the people that are listening, they may not have a position in Bitcoin or Ethereum, and they want to start a position. Would you recommend that now is a good risk reward period for them?
Ryan Wilday: I would - I always try to teach people to, like, one, if you don't have a position, get a position. What's the right size is the question then, right? I think that a good guideline is 5% to 10% of your tradable assets are investable assets. I do think - so Bitcoin, I have Bitcoin as a - at a portfolio level asset, meaning not tradable.
So I trade Bitcoin. But if I put assets like SPX, SP500 exposure, gold, bonds, some of these sort of umbrella level assets I consider real estate, I consider Bitcoin one of those, which to - is probably foreign to a lot of sort of older generation, right? Like, what? Why? And part of it is the capability that if the crud hits the fan, Bitcoin is immediately usable in a lot of countries. It is an asset that can't easily be confiscated. I mean, they can't be confiscated without serious violence and even harder to confiscate than gold.
So I consider Bitcoin at that sort of level of portfolio. And so that I manage that at a sort of rebalancing, right? So that's non-trading. So, like, okay, my Bitcoin asset sort of overinflated because of the gains, I should take some of that and put into - move into gold. So kind of the rebalance level portfolio. And then when I go down into, like, the swing trading, or day - or intraday trading, it's also an asset in that - those portfolios that are being used for intraday to multi-week market.
So I think it starts with what are your trading investing strategies? And do you operate at, like, a long-term portfolio level only? And I think in that respect, at least those people should have some exposure. And 5% to 10% in Bitcoin can do a lot.
I wouldn't mess with a lot of altcoins. I mean, there's - Ethereum has a unique benefit if you learn smart contracting, all that. That's a kind of another whole another podcast, but you could consider that as well, but I wouldn't touch anything else in the crypto space at that level where you aren't trading. Like anything that's a very sort of little tiny micro altcoins is really a tradable asset. It's not an investable asset right now.
So that's the way I would treat it and then just then go, okay, what level of exposure am I comfortable with? And there's no reason to go nuts if it's new to you because a little goes a long way in terms of return. If it's a really new bull market, we should go 5x. That's just normal.
Like, just look at Bitcoin's history. In 2017, it was the - was in - Elliott Wave talked a third of a third wave, and it went from 1,800 - well, it's even lower than that. I think the ultimate low was like 100 and something, and then it went to 18,000. Ether went from 10 to 1,300.
So we won't see those level of returns, but then even from 2018 low to the 2020 low was 20x. This is very normal behavior for Crypto. I'm only talking about 5x from here, that's historically low level of return for Bitcoin. So you don't need to go nuts with some large position. And then after you add some, you need to consider whether you would buy lower. Would you DCA if we went lower? Would you - are you going to set apart some cash to dollar cost average or add or buy dips? And then are you going to trade that?
Those are the questions you just need to ask yourself, and some of it has to do with who you are as a trader. It really isn't too hard for - most of my subscribers who are not really traders, it's not too hard for me to learn how to say, "Okay, I'm going to start with a small position and then buy dips, simple as that. And then if some profits arises from some of those dips, I'm going to take some profit. And then you build yourself kind of a long-term asset base to work from. And then later, you might mature into some trading, try to make it some income out of it on a daily basis.
So I think that that's - it starts with knowing yourself, it starts with considering some exposure if you haven't had any and then it goes with controlling yourself, your animal spirits to say, okay, I'm not going to make that position size too large for me to handle right now, especially with the potential more economic duress. That's a less long winded, but I think I'm trying to walk people through how you could - how one thinks about these questions.
Daniel Snyder: So I just want to take a second. At the beginning of the episode, you had mentioned some support levels for Bitcoin. Now let's talk about price target, from what you just said about 5x, that would be a return of what, 120,000?
Ryan Wilday: 125,000. Yeah. So I mean it's a little less than 5x, but pretty - sorry, it's a little less than 4x. Sorry, I did speak out of turn, so it's about roughly 4x from here if we get there.
Daniel Snyder: Is there any time horizon on that?
Ryan Wilday: I avoid. I mean - so I'm using Elliott Wave analysis. And one thing I have learned over time of doing it is that the corrective ways which are the non-trending waves, they just tend to slosh around longer than I ever expect. So I'm just - I'm super cautious on time frames.
Daniel Snyder: What about the risk to reward of Ethereum right here?
Ryan Wilday: Well, Ethereum, the target is 10,500. That's the - and right now, we're sitting at 1,800 range. I didn't look to the price in about 30 minutes, but it's in that range. So that's even bigger risk reward. I would just, again, be careful with Ether if you're not interested in trading or don't have interest in smart contracts and all that. It's just a more volatile asset. And the altcoin space is just something that I think people need to spend a little more time with. It's not like digital gold, so to speak. It's not - it doesn't behave like digital gold in the same respect. It may over time, and it's starting to behave that way, but just a little bit different type of asset.
Daniel Snyder: Do you have any insights as to why Bitcoin and Ethereum are so correlated, yet their returns can be so different like that?
Ryan Wilday: I mean, the whole crypto market is highly correlated. So even if you see Bitcoin, go up for, like, over a period of days and, like, big green candles, you might look over at Dogecoin is doing the same thing. The crypto market - at Ether - but Ether and Bitcoin have - both have pretty strong institutional exposure as well.
So I would say under the hood, I would imagine that there are institutions doing balancing between the two, trading the Ether-Bitcoin [pair] ((ph)) chart. Both of them have a healthy options market, so there's hedging going on. So there's an institutional behavior that happens in Bitcoin and Ether that you don't see in the other altcoins. It's not to say institutions are not in the other altcoins, but you don't have the sort of very well-developed infrastructure of a market.
You got CME futures in both on our standard futures market in the U.S. They're both there. Both have mini contracts and full contracts just like the S&P500. So there's a very healthy, like, institutional market on that side, so that's going to correlate them. And then there's just the market cap. So they're both pretty healthy big fat market caps.
So that affects the way they move, the volatility characteristics and all of that. It's kind of [keep] ((ph)) together where you can have - you can have another little altcoin that's so small in the market cap and so thin on the exchanges that some little stupid piece of news and they're dropping 50% and then back up by the next day.
I mean, you get - we used to see that kind of stuff in Bitcoin back in the day, Ether back in the day, for sure. But because they're so healthy market cap-wise and liquidity and infrastructure in the market has developed so much they just - they don't do some of that crazy stuff the same way that they used to.
I mean, it was a very different market, like five years ago, for sure. 2017 was very different than it is today. And even 2018 - all you go on and on, I mean, every year these markets mature, not just internationally, but even in the U.S. where we are getting such a - even though we're getting so much pressure from some politicians, the market continues to develop in terms of its infrastructure and its health, overall health.
Daniel Snyder: So multiple times, you have mentioned Elliott Wave theory throughout this episode. So for the listeners who know what that is and the strategy behind that, what would you say is the count right now for where Bitcoin is?
Ryan Wilday: Yeah. I mean, there's a lot of debate because the data - the early data at Bitcoin is very hard to judge where does Bitcoin - where do you actually - like, when Bitcoin first traded, it was not on any exchange. It was basically on bulletin boards. And it actually had an exchange price on some of those bulletin boards. So it makes it really difficult data-wise to say, okay, because you - when you do Elliott Wave, you have to use the entire history of the chart and work in. But my perspective is that we are in the fifth of a third - of a large third wave, but I have some alternates.
So the 125 would terminate the third wave of Bitcoin in its history. And that means that the fourth and fifth is going to go much higher, and I do expect the $1 million Bitcoin price. In fact I think it's better than - for it to hit $3 million eventually. That suggests a lot of problems with the currency, the U.S. currency, to be honest, because I expect a lot of - some bigger gold prices as well.
So I think there's a lot of charts that suggest some serious problems are with the U.S. dollar. But - so fifth of a third, yeah, and then the fourth and fifth to come. And then - so what that means is eventually there's a wave two, that's of a very large degree, which can be a multi-decade bear market in Bitcoin, but that's a ways far off. It may not even be in my lifetime, to be honest.
Daniel Snyder: Oh, what a bold take. Love it, Ryan. Thank you so much for joining us today, providing all those insights. Listener, if you want to see more of his research, go over, just click the link in the description or on the show notes page, Crypto Waves. Check it out, there is a 14-day free trial.
Just a reminder, anything you hear on this podcast should not be considered investment advice. At times, myself or the guest might own positions in the securities mentioned, but this is for entertainment purposes only, and you should seek advice from a licensed professional before investing. And if you've listened all the way to the end, you're the real MVP. Thank you, listener, and we'll see you in next episode.
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Key Support Levels For Bitcoin That You Should Know With Ryan Wilday (Crypto Waves)