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Welcome back, we're going to talk about different topics today. What is Michael Berry doing? A position that I also decided to follow in his portfolio, because it makes a lot of sense; it's not just following someone for no reason, but because the analysis proves it. It is also taking short positions in other sectors, both long and short at the same time.
Let's analyze those positions. Bitcoin is now indeed in the bottoming-out phase, but this has not been confirmed. Let's see, we've reached the stage where we should be setting up a fund for crypto, a temporary fund. We have not seen any confirmation of a bear market bottom here at all. Well, a few days ago many people were mentioning that the fund was already in place .
And yesterday we made another fund. So, this isn't about saying, "The fund is already in place because I think so, because 53% is enough." Bitcoin has already fallen 54% from its peak. I think many people already agree that it's a bear market. The total sell-off of Bitcoin and many cryptocurrencies for me was last year in November, when we were definitely breaking the entire upward trend and when we were breaking the 50-period weekly moving average.
This was the definitive sign to get out of crypto. I haven't bought Bitcoin again. I've taken trades during bearish flag patterns, but understanding that they are bearish flags and we will probably have another stage for other positions, some, few, that really offer growth. The problem we have right now is that we are in limbo.
What do I mean by that? Everything points to a continuation of the downward trend. Not only the cycles, where the bottom will most likely be in October, it's not far off, really if you have patience here, that's the best virtue, because we are fulfilling the cycles exactly the same as always for Bitcoin, a year of bear market, which would be concluding around October, around November, the exact peak was October 6th, so we could consider that October of this year is where we could see the bottom and you're going to say, how is it possible that it's so perfect?
Human psychology is what governs these cycles; it's not necessarily the news. If you've been around for a while, you 've seen many things that the news doesn't confirm. Good earnings reports for companies can mark a peak, excellent news from the Federal Reserve can also mark a peak, but if we're at a resistance level, it can also mark a peak, as can very bad news.
But if the price is at a support level, it can mark a bottom. In this case, what's happening with Bitcoin? We're below support levels. This was the previous bull market; we marked support here at 30,000 in 2021. We rose, marked support again, and this time it's a bear market. It was a lower high, similar to what we saw here.
In fact, there's another very important similarity: the 200-period moving average on the daily candlesticks is exactly the same. We were actually mentioning this; it was going to be resistance. I was waiting for a short position. In fact, many comments were saying, "How is it possible to take a short position?
It's going to be terrible." I didn't manage to take it, but it would have been great. I was simply waiting for 84 because it would validate this previous support. When it comes to taking a trade, especially with leverage, it's better to wait for the exact points because there are always opportunities, and now we'd probably see some long positions.
The thing is, we're already below this support. What does this mean? Yes, it is very likely that we are going to a stage that favors crypto again, a stage where liquidity returns. That doesn't mean new highs at all; it means a new range. It means that if Bitcoin, Ethereum, and many altcoins bounce, we don't have much room to grow.
It would be around 64, 65, lower highs, resistance now here, what were previously supports, that's the resistance. Moreover, simply coming to see that we are doing very similarly to the previous cycle, a break of this support, a break of this support, we are below that. Nothing falls in a straight line, so growth is likely for the next few days, that is, and I would prefer, in my case, to see validation of the 300-period average line first, here at 54,000.
There are still a few days left where Bitcoin could usually reach a certain point and then see a rebound. There is still no confirmation of a temporary fund and definitely no confirmation of a bear market fund. If history repeats itself, which is what usually happens in markets in general with the price, history repeats itself because this is a combination of human psychology, and the human psychology of those who put money in is basically a cycle of greed and fear.
Clearly we are in fear, but here we were also in feeling. That simply gave us a stage that, although it favored crypto for a few days, a few weeks, as you can see, did not offer a high probability trade. That's what we're doing now. Below support, growth would be to revisit the average line again from below.
We did the same thing here before, we grew, we visited it from below, slight closures, but then we fell. And in fact, you can see that here is this area, which I would expect for a likely bear market, its bottom, and this again is speculation, there is nothing wrong with having projections, always understanding that each projection requires confirmation.
If at any point we see a change here where Bitcoin regains support and starts to have weekly candle closes again above 65, that is already a change of character, a break of bullish structure. In this case, it's basically about being below resistance levels, which is a negative signal, and any growth is towards resistance levels.
What would be better spots? The 300-period average line and clearly, if we repeat the previous bear market, it is to return to this channel. This channel had a fakeout at the bottom, but then they saw that it worked as support. Something similar could happen, or it could return to 44, which is this stage of this channel; having a fakeout or not being a fakeout could continue.
Hard to believe, since history shows us that Bitcoin does usually fall between 70 or 80 percent in a bear market. In the previous one it was milder, it was 77%. What's hard to believe, in my opinion, is that this bear market is only 54%. That's what wouldn't make sense, because that's what would break the data.
And one, as an investor, as a trader, follows the data. The data still favors a larger bear market, understanding that yes, everything has its phases and right now , being excessively bearish, taking short positions when the market is already in extreme fear, doesn't make sense, but it also doesn't make sense to consider that this is the bottom of the bear market.
This is what makes sense; it's considering that if we have another phase at this stage of the year, mid-year, where the volume drops, it would probably be very, very boring. The trades wouldn't necessarily reach the goal quickly; they could take a long time. Positive signs, of course there are several and we have mentioned them here.
Many are arriving on platforms we were expecting. Sui, for example, reached exactly a liquidity zone that it is respecting. A little bit of that area remained unfinished. Ideally, I like to see that it takes all the liquidity. A three-drive pattern, in this case, would make a lot of sense to visit and take this full liquidity.
If that happens, already at the stage where we can see slight short- term growth, that could be a good trade. These are the ones I clearly have on my watch list and many others that I don't mention here, only within academia, because, obviously, it's out of respect only for the people who are within academia.
If some break out of their liquidity demand zone, it's a clear bearish signal, as is the case with CRO. These positions are not taken. Dogecoin is also at the stage where it should be hitting a deeper bottom, but it has not yet confirmed this. It should hold these support levels and have a candle close around here , because, at the moment, it doesn't give confirmation.
Others like AVAX did come to do a three-drive pattern and are recovering, well, that three-drive pattern, doing what was a fakeout here. In fact, this is something that Ethereum has done in the past. Ethereum in the past also had a possible three-drive pattern which you can see here and similarly quickly invalidated it to take liquidity in a demand zone.
That's why it worked for a moment, but that trade had to be closed, because it had eventually reached resistance levels. And here too, eventually, it became necessary to close down. Currently, this area is not being validated, which is why there is no confirmation yet. The important thing to understand here is that the bearish phase for Bitcoin has not yet been completed .
We are below support levels. Taking trades here is for a small percentage and can take a long time. We are in a stage of low volatility, where volume is low. At this time of year, it's very similar to this time of year as well. This whole stage was boring, and then we created the fund, which was also boring, but at least they were excellent buying points.
In fact, I'm seeing more shorting opportunities, because the stock market, well, we expected it to grow while the dollar, after growing, would get a validation of what the previous range was . That has allowed the stock market to grow these days. Well, the last four days, basically, but it's still a downward trend.
They are still lower highs and are now approaching their resistance. That gave us opportunities for long runs. In my case, within academia, we took the position at Microsoft. Do I expect this to lead to a bull market? Definitely not. They are simply good buying points for small transactions. Now that we are growing, we must take into account that this is still the same, with lower maximums and lower minimums.
It's a trade against the trend, which is less likely, but still a good buying opportunity. Michael Burry was also buying Microsoft. When news of this type comes out, it is usual to see a setback after the news. A red candle is going to read again to now continue upwards. But mainly what Michael Burry is doing is shorting his stock.
Obviously, it's Michael Burry, it's what he usually does. He's currently shorting Nvidia, AI in general, and Caterpillar and SOCKS. Does this mean we should follow it blindly? No, definitely not. Michael Burry is often wrong. It's usually very early in its entries, but in Microsoft's case it's basically simple technical analysis.
Reaching a previous support level, a previous high, also validated what this stage of this downward trend was on the outside. It offers a rebound, but it's only a rebound until something changes. When I mention investors who are very media-savvy, like Michael Burry, well, even Michael Saylor, it's not to follow them blindly at all, it's to see if there's logic in their analysis.
Now he's also taking a short position in Tesla, as he has done in the past. Many people have lost money by going against Elon Musk. I personally haven't shorted Tesla, but I have taken profits. Last year it was necessary to sell Teslas near their locations where we are. It's no longer in its upward trend, it's out.
It faked out of the all-time high, which is a bearish signal, and started to fall. Now Michael Bury is shorting Tesla. It makes sense; it's a bit red because it entered at 416, and right now we're at 426. Personally, I'm not interested in taking this short position; I'm taking it in other stocks. And why?
Because it's simply technical analysis. Yes, we are in a downtrend for the stock market and stocks that are replicating this are now at resistance. And what we mentioned is that the VIX was probably going to recede since after the falling wedge, growth is normal; it continues in an upward trend. Here you can look for support at 15 and once the VIX rises, you know how it works, it's basically volatility returning to the market.
And at this time of year, mid-year, volatility can arrive and volume usually drops. So, it's not the ideal stage, especially in crypto. Of course we 'll see rebounds, growth, but these aren't the best setups, not the best risk-reward ratio. The dollar is rising, that's not positive for the stock market, or for many assets in general.
And now we are pulling back to probably continue the upward trend. VIX validation would be combined with dollar validation. SpaceX also received a lot of media attention. My expectation was not to participate in the IPO at all, to give it time and then back down. It returned to support levels, a slight fakeout below the start of the IPO.
This could have marked the bottom. Now it's simply a matter of waiting to see if this is a validation after this compression or if it could create a similar trap like the one Ethereum created in the past. Because compressions of this type can be seen all the time and even if it resolves upwards, it then completely invalidates downwards.
It's a price action very similar to what SpaceX is doing. The initial boom is over , all the euphoria. These are clearly better accumulation points, but we usually see an even deeper pullback. And that's what I want to confirm. Leave a like, comments below are always welcome. Tell me, are you already accumulating Bitcoin?
Do you think Michael Burry is getting ahead of himself with these short positions in Tesla and many other companies in general, against the entire stock market? I've included free training below where you can open your account and learn how to analyze the markets. You can see it in the description and in the biography.
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