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Foreign my name is Nicholas Merton here from data Dash and today is June 28th of 2023. well folks I hope you all are having a fantastic day wherever you are because in today's video I want to spend some time to talk about an incredibly important Dynamic that we have toUnderstand about cryptocurrencies and maybe even the broader macro environment when it comes to the stock market and assets as a whole it is something that no matter if you are bullish or bearish on the market is an important Dynamic to understand in order to maximize returns during opportune windows and to hedgeLosses during downward periods we've got a lot of things to dive into in today's video If you guys happen to enjoy it consider dropping like it's one of the greatest ways you can support the channel and let's go ahead and kick off the rambling so I want to start here byTalking a little bit about something that's going on in the crypto space right now what may be moving in the broader range of assets across the board now I know a lot of people here fit into different camps of investors and some of us resonate with certain types of assetsSome of you out there there are maybe the time tested dollar cost average Bitcoin maximalist who's only about Bitcoin some of you may be in the similar camp for ethereum and many of you out there probably fall into a basket of different examples of people who are very exposed and interested inAll coins as Assets Now as you all probably know everyone's experience investing in crypto depending on what they're invested in is going to vary if you've been in Bitcoin here in the near term Bitcoin has definitely been the winner it's up here towards its relative highs here in April and whether or notIt continues higher or not the question remains here how big of a difference would your performance be being in Bitcoin versus being at all coins well many of you know the answer to that question it's been much more favorable to be in Bitcoin as a reason all coinsAs we've been kind of pointing out since August have continued to bleed since back in August of last year when we sold our positions against their comparative Bitcoin ratios I mean all coins have just continued to continue cratering here within their valuations so again we can see here BNBThe largest altcoin under ethereum or the third largest cryptocurrency is just this past week back from the week of June 19th lost another 15 against Bitcoin now I understand some people may argue again for all quests but Nick you have to look at the dollar value they'reNot down that much but the thing is here at the end of the day it got outpaced by Bitcoin 15 a week and that's following multiple weeks like this we had another 19 decline back here in early June and this is a part of a longer term downtrend where essentially B and BSends its highs back in November of 2022 have declined by over 61 percent against Bitcoin that is not a good look for those who are exposed to BNB you are massively underperforming The Benchmark asset Bitcoin so we can see this across the board here in a lot of plays weTalked about this with Matic a lot of people get saw the dip here at a lot of these plays they looked at the historic kind of dip buying opportunity here around 69 70 and I thought oh my God I'm going to buy into it well it's justFaded right back down and it looks like it's going to continue moving lower here towards our Target here of the lower band support line and as you all know as we've talked about before those five ten percent additional moves from top to bottom can be major differences fromWhere we are now of around 2 100 satoshi's uh or generally speaking maybe 21 000 satoshi's down towards equivalently down towards around 1250 or around 12 500. so huge difference here right and this means that again while maybe in dollar terms perhaps we get it wrong maybe we're in a new bull marketAnd Bitcoin continues to store higher and maybe Matic will still move up in dollar terms but you would have just been better off buying than Bitcoin right along with that as well we've got plays like cardano right again same exact situation as Matic here got a little bit of aBuy-up bit here but it's essentially been continuing to fade after an already continuing downtrend since back in August of 2021 down roughly from where we are now at around 85 from those prior all-time highs with our Target looking to be around 90 to 93 percent right soWe've been talking about this for some time how all coins are not going to be as safe of a bet as they were during optimistic times and this even goes for ethereum I know some people think the ethereum is immune to it because of its supposedly better monetary policyAgainst Bitcoin due to eip1559 which burns a lot of the eat that's utilized in transactions and along with that as well you have the staking which uh what going from proof of work to proof of stake lowered the inflation rate for ethereum and therefore sometimes it can beDeflationary or generally have kind of a Cap supply and people think because of that it is just guaranteed to go up it's got a better monetary policy the big one's going to go up he's going to go well it doesn't really matter at the endOf the day guys if people are on a risk-off mentality and they are generally more sellers eager sellers than eager buyers on the market and we're not seeing a new wave of users or adoptions or narratives each price will underperform against Bitcoin especially considering how much it accelerated fromAugust to 2019 up here towards its highs in November December of 2021. that's why we've been highlighting this range for a long period of time that if you are looking to add into position so I need at least wait towards you towards those cheaper valuations but this is allBesides the point here why am I going on about this here what I want to emphasize is that there are cyclical periods where certain types of assets the market leaders in this case those that are the largest value plays in the market the highest in regards to valuation theSafest bets historically speaking that maybe don't maximize returns in the grand scheme of things but generally in the short term are plays that people can go to that are resilient time tested they've been around the block for a long period of time and they have the largestMarket cap where these plays do very well in all coins believed the risk on plays either go practically sideways they have minimal to no returns or they end up losing valuation or severely underperforming for that matter and there are also other periods of time where that's completely flipped on itsHead we're being risk on is going to pay it forward no matter if maybe even the macro environment is there or not but generally speaking the small caps and the mid caps are accelerating and they're making massive amounts of Returns versus that of the more defensive plays which may still be doingWell Bitcoin may be performing well Eve may be doing well but those altcoins are really with the Firepower is that's where you make those generational returns right so we have these periods these waning periods where essentially certain asset classes do better than others and as we've emphasized so weTake it back here to bitcoin we talked about the fact that we may be getting the first blue flip here really depends on how we close we're at just 200 above uh where we need to be so if that starts to correct then again things may changeHere for Bitcoin we may not be getting that bull market confirmation yet or at least a higher inclination that we're going to get a bull market here near in the future but the key Point here I want to mention is that while Bitcoin here is starting to Teeter on Flipping its TrendTo the blue side which is in favor of the Bulls we can see here that all coins are incredibly far away from that flip with our custom indicator that we utilize uh within the newsletter which actually has a pivot showing the price point we need to cross for our indicatorTo flip even that pivot is far away from where we are right here uh in regards to valuations for all altcoins excluding Ethan stable coins of 230 13 billion dollars Far Cry away from generally where we got out of the market at around 320 billion dollars so this looks like it's ready toContinue moving lower I have no doubt looking at the candle pattern here that maybe we get a slight up move here where dollar valuations move up and then you have a tall Wick that just gets obliterated by the end of July I don't know what it is or what it's going to beBut that looks the kind of setup here I've seen a lot of charts guys and on a monthly when you've got a build up like this you have a fake out and then you just start bleeding downward guys this does not look good and I want to make anArgument here today that this is not just me bashing on the names we talked about I'm not here to bash binance not here to bashmatic cardano or ethereum or the broader all coin space as a whole I'm just here to talk about how not only this is a normal part of crypto marketsBut more importantly that we've also seen this and we continue to see this in equity markets and the stock market as well there are periods of time where the large cap stocks generally far outperformed the broader stock market and you all have probably been feeling that right now with the kind ofPerformance of names like Nvidia of stocks like apple but we can just go ahead and we'll run through some of these here right just take a look here at nvidia's performance month after month after month here it's been continuing to print green apple as well has started to recover here to NewAll-time highs as of this month in June we also have as well many other stocks like meta which have massively recovered a lot of their losses just completely blowing things out of the water here and we also have other stocks like Google as well that have started to move higher asWell as Amazon off of the supposed AI hype that's going on right now and that has led towards a pretty big Distortion here where it sends back here roughly and around October when we set in a double bottom here in March we've seen this massive acceleration in the overallLarge cap plays now what I'm looking at here is a custom ratio again you guys know if you watch the channel here drop a like for the ratios we like to analyze ratios between different types of assets or indices and what we've essentially done here is we've taken the S P 500 orSPX and we divided it by rut which is the Russell 2000. these are both both stock indices that track a whole range of stocks the S P 500 tracks the 500 largest companies and on the other end of the spectrum we have the Russell 2000 which is the 2000 a mixture of 2000Different small caps in the stock market right so essentially this gives us a really good measurement and this ratio to determine whether or not the large cap stocks really the High concentrated large stocks like apple Microsoft Microsoft's another name we've got to mention earlier Nvidia you know meta allThese kind of big Tech plays that have been really dominating the world Google right all those names whether or not they are outperforming the broader small caps now we've seen generally since back in 2014 since we have a structural double bottom in this ratio again this is a significant significant reason whyWe cannot ignore these ratios Guys these ratios are incredibly important and same goes here back during the 1990s where we saw a lower high here in those plays it's very important to come back to this but we can see that since 2014 this has been a broader Trend now we saw a prettyBig disruption in that during this wave of covet where there's a lot of stimulus a lot of retail Traders coming in essentially small cap stocks do phenomenal when there is retail liquidity when there is a surge of retail Traders and Retail speculators they like to buy cheaper stocksGenerally speaking they don't want to buy into the crowded names these are periods of time where institutional capital is the major driver and we can generally see that we are back up towards our relative highs since back in March of 2020. now there are a couple different ways to feel about this somePeople will immediately jump the gun and take the bearish side and say that this means that we are about to create a downward we're back where we were in March 2020 it's time for a correction some people on the other end of the spectrum will say that hey Nick thisLooks like it's about to break out and we could be repeating either this kind of blip here in the 1990s where we accelerated a little bit further before we really start to pull back or we're here in the midst of the 1990s here in 20 the 2020s essentially we're in ourRoaring 20s and this is just going to keep going up off of generative Ai and that Nvidia tsmc uh you know Microsoft all these names are the ones that are really poised to hold out in this environment and continue to accelerate off of potential growth and I thinkThere's an argument to be met on both sides all I'm here to say is that no matter if you believe the Mark is going up or down you need to be watching these ratios you need to have them on your radar and that's why I share the ratiosWith you guys here we want to share a ton of great free content you guys can add this I'll show you how to do it you essentially type in SPX hit the down key here to make sure we get the right price feed and for the embassy and on top ofThat we're going to divide it here by rut and we're going to hit the down arrow here again Russell 2000 and just like that you'll have this chart here and you guys can again add this towards your watch list within trading view but generally speaking we are at a prettyBig make break point here if the market doesn't show up to the plate and continue supporting these large caps and we start to see a pretty substantial decline in them here in the next month or so then it may be time to start looking at smog tabs and looking forGreat discount opportunities on those that are performing quite well outside of that as well if we do see a really big green close here for the month of June or maybe a nice performance here in July this might put us in a position where although we're going to probablyBe looking for some pullbacks or discounts back to those lower moving averages getting us to rethink our thesis on a bear Market still playing out and possibly consider that we may be in a bull market and these large caps although they're not going to perform properly as nicely as small caps wouldDuring those optimistic periods that there may still be some more upside this is the critical thing to think about because we always have to keep an open mind and I emphasize that here in the channel here that we are always keeping our mind here as much as we do believeMarcus are going to pull back we've got to keep track at the data here and it may be a little more nuanced than essentially being a bear Market all coins and the small cap stocks and broader stock market as a whole may go relatively sideways or underperformedBut maybe large caps are having their moment right now maybe we are going to see some kind of acceleration like during the.com bubble or more moderate one like here in the 1990s but at the same time generally speaking historically we are in a period of time where it is generally less favorable toBe in these large caps so this isn't something where I would be dollar cost averaging or building positions for the very long term for these plays again you can ride the wave maybe some of these companies it will still be at a good price where they're at right now butValuations are quite High just bear that in mind here guys I see it more as a short-term thing one thing that kind of proves to me to a large extent that I think we are in a kind of a short-term run-up here or at least makes me lean inThat direction rather than being 100 confident it is taking a look at the consumer cyclicals right now I know these are are boring stocks to look at I know they're not the nvidias they're not the Teslas of the world but taking a look at names like Procter Gamble andGive us a really interesting perspective into the correction that we saw that many believe maybe the end of the bear market and taking a look here at what we've seen historically speaking Procter Gamble declined 26 from top to bottom roughly speaking over a period of around nine monthsIf we take a look at history we can see that prior Corrections were 31 42 percent 57 now generally in the case of Procter Gamble the corrections are getting weaker over time as the company does expand but we've also had weaker Corrections in the past like this oneBack in the 70s generally speaking all of these led towards a red flip and we did not get that red flip here on our quarterly momentum indicator this has to be a little bit concern that the market is buying and again towards a relief rally and does not have the kind ofSteam momentum like we've seen in the past that really drives valuations much higher here over that period of time along with that as well United Health Group right United Health Group huge Healthcare conglomerate not my favorite company but definitely one that has been able to swallow whole the entire HealthCare system in the United States and keep it as crappy as it already has been for so long but generally you can see here that just like back here in 2006 we have this period of stagnation in the name and that is not good to see for multiple Quarters here multiple yearsNow since back in 2021 this has been stagnating and we have yet to see that red flip but we are looking like we're getting very very close towards getting that here and if these names you know the United Health Group is not an end to scoff off here it's 449 billion dollarCompany if these names start to severely underperform these are those large caps I have a feeling they are going to hit the sentiment of even the tech plays and they're going to at least leave investors waiting to see if these technology plays really meet up towards the hype along with that Johnson andJohnson again another large cap company 424 billion dollars has continued to underperform here from around 186 billion dollars towards our 163 excuse me 185 dollars per share down towards where we're at right now 163. we have not gotten that red flip yet but each and every time we had thesePullbacks but by the time we were done we were in red territory on that quarterly indicator so I want you guys to to kind of keep these on your radar and keep open-minded to the idea that long term as we've been emphasizing here in the channel there are a lot ofMetrics that while we have some short-term optimism in the market a lot of people are really hunky-dory around Ai and all these supposed narratives that are just going to supposedly pick the way for these companies to double or triple it was very difficult for these large caps to really perform so well soYou could very well see in this situation where we do expand up here that perhaps we're about to still prepare for a correction in valuations that's why I'm kind of pulling into this topic here we could still very well see a massive correction in valuations for equities but it could be that theResilient names are those large caps during the discount opportunity but when optimism returns to the market we see the opposite of the.com bubble we essentially see that the small caps come roaring back while people fled towards the large caps during the pullback small caps will be beaten down there'llBe at really cheap discount valuations and that's where it's time to scoop in on all of those alternative energy stocks all of the different types of small caps and all potential narratives that people might be getting interested in any name you can think of right companies are losing money names thatAre again just momentum plays at the end of the day that would attract retail investors I think that is what could very well play out here and that also could repeat itself in the more microsphere of crypto through altcoins I think that is something we need to keep an eye on hereEspecially as retail liquidity is drawn towards these plays so again keep in mind here that this does not prove whether or not the Market's going to go up or down right we could see this go down here and stocks could rally to new all-time highs still and vice versa weCould see these valuations go up and the stock market could continue right or crash it's just something about determining where you want to allocate your portfolio how you can be allocated towards Market leaders now if you guys like this kind of content here in this interesting way of looking at the marketFar beyond just doing standard price analysis and short-term trading like a lot of others out there if you like this kind of content I highly recommend you guys check out the dash report down below in the description you guys will not only get access to our momentumIndicator which we feature here the red and blue line indicator which we discussed you also get access towards a premium version of that that has a pivot letting you know what price point the candle needs to close above but on top of that you guys will get access towardsOur monthly newsletter 20 Page report on cryptocurrency stocks Commodities and Forex you guys get access to the dash report Discussion Group our mid-month webinars where you can ask me questions live on the webinar we can dive into the charts you guys will get access towards our trade alerts the whole back weTry to add in all of that and you guys can get 20 off on an annual newsletter I'll leave a link Down Below in the description it's a great way where you can support the channel if you guys were considering maybe supporting us on patreon or something we recommend doingThe newsletter because you guys get so much out of it in this case and we have a great community of hundreds of members in the dash report discussion group that you can interact with ask questions and continue to share content with but that's going to be it for today's videoGuys thank you all so much for watching I hope you guys are having a fantastic day wherever you are in the till the next one I'll see you all on Friday take care everyone thank you