Hey trader,
This past weekend, Bitcoin super traders put the word out.
If Bitcoin breaks $60,000, it creates an automatic algorithmic trigger to liquidate all positions worldwide.
The liquidation sweeps far beyond crypto. Gold, silver, precious metals, and the entire stock market all get dragged into the selling.
I spoke with two of my trader friends this weekend and they both said the same thing.
If $60,000 breaks, the bottom of the world falls out.
Today, I am going to break down the trap door, the domino sequence it triggers, and the broker stocks already flashing red.
The Trap Door
My call in MarketWatch back in December was clear. If Bitcoin takes out $65,000, we head to $55,000 and then all the way down to the low thirties.
The monthly MACD on Bitcoin is already rolling over. That means the product is poised to crash.
At $60,000 it becomes a free fall. The algorithms do not give you a window to react.
Everything is correlated through margin. Traders are loaded to the hilt and doubling down on leveraged positions.
When Bitcoin drops, forced selling cascades through gold, silver, and precious metals. Then stocks get swept because the margin calls hit every asset class at once.
Once that indicator looks like this on the S&P 500, it blows the index out by 1,500 points or more. I reverse-engineered the monthly RSI down to a 40 reading and that level puts the S&P 500 at 5,280.
A 1,600 point drop will destroy most portfolios. If you cannot handle that, you need to act now.
The Domino Sequence
The broker stocks are already telling you what is coming.
Robinhood is getting destroyed and the monthly is rolling over. Interactive Brokers is collapsing for the same reason.
The dominoes are lining up across the entire brokerage sector:
- Coinbase is already in a crash and the monthly confirms it. They started knocking it down before the broader market even flinched.
- MicroStrategy goes down with Bitcoin because Michael Saylor loaded the company with crypto exposure at the top.
- Schwab, Goldman, and Blackstone all get taken along for the ride. The retail discount brokers will get razed across the board.
They knock things off one by one by one. I told my members this is a domino effect and the first dominos have already fallen.
The White Swan
Most people prepare for black swans. A black swan is a tail risk event you cannot see coming at all.
What we have right now is a white swan. Same risk of ruin, but you can see it approaching and choose to do nothing about it.
The first bubble to burst was Bitcoin. The bond market bubble burst a couple of years ago.
Now gold and silver are in a bubble. The last shoe to drop is equities.
I am sitting on almost 60% cash across all accounts. If the market blows down tomorrow, I will lose money on my longs.
I will not suffer risk of ruin.
Nobody is going to ring the bell when this happens. By the time you find the reason, the S&P 500 will be at 5,300.
Do not look for the reason. Look for the exit.
Nearly 90% of all trades are now placed by machines. Those machines do not wait for headlines, earnings calls, or analyst downgrades.
They strike across assets and timeframes at speeds no human can match. When Bitcoin breaks $60,000, the algorithms will cascade liquidations through every correlated asset class in milliseconds.
That is why I built the Genesis COG System. It detects when Wall Street's algorithms are loading up a move before the move hits the tape.
The system identified the monthly MACD rollover on Bitcoin and the broker stocks before the selling accelerated. It caught the same pattern forming on the S&P 500 right now.
The trap door has not opened yet. When it does, most traders will be scrambling to find the exit while the machines are already three steps ahead of them.
I built the Genesis COG System, so you do not have to fight the machines. You ride with them.
Professor Jeffrey Bierman
Creator of the Genesis COG System