Alessio Rastani has worked as an independent trader and in the research of the financial markets for over 10 years. He has become a widely followed commentator, releasing countless videos, reports, and online educational material on subjects such as trading and the technical analysis of stock markets, crypto, forex, etc. He started his career as a trader after the crash of the famous dot-com technology in 2000. Chart Analysis for both the stock market and the crypto market is one of his specialties and favorite topics. He Has been invited to many seminars and events, including to the TEDtalk stage, to speak in London, USA, the Netherlands, and Hong Kong.
Interview Date : 29th June 2020
A Push That Kick Started My Career
My career as a trader started by holding an interest in the stock market in the early 2000s. I met a guy who worked for one of the biggest firms in the world the Goldman Sachs, a fantastic guy and now a good friend of mine. He was the one who got me into the stock market. He taught me some trading strategies, and it all started from there. Then I started researching the stock market and made a ton of mistakes. Before the 2000s, I lost a lot of money, around 50,000 dollars.
This was back in the late 1990s, and to lose that amount of money as a student with money that I had received from my inheritance, became a huge learning lesson. In the late 1990s to the early 2000s, the bitcoin of back then was the dot-com stocks. We had the dot-com internet bubble, which was a different kind of environment than today. The dot-com internet bubble was the new thing just like bitcoin has become the new thing now. People were crazy about dot-stocks, and I was crazy about it too. I make some terrible investments in internet and dot-com stocks. I told myself that I give it up forever, or I can start learning about it. I decided to do the later, and that is how I come to be where I am today.
Ultimate Fail lead to Long-Term Trader
I don’t trade short term, I am not in bitcoin in the short-term but in the long-term. That is the same strategy that I use in the stock market too. I don’t do day trading and swing trading either. It saves more of a position trade, you are in something for 2 weeks but rather for years.
When I first heard about Bitcoin back in 2013, it became an embarrassing moment for me. I did an interview with Peter Schiff and Brian Rose, and in the interview, I made the embarrassing statement saying that in a few years no one would talk about bitcoin. It is the ultimate video to fail.
A Dangerous Parabolic Trend
A lot of people, including me, thought 1000 dollars on bitcoin was expensive. Who would have thought it would go to 10000 dollars, and eventually to 20000 dollars. However, that was a bubble in 2013 in the sense that the price became parabolic. People often misunderstand the term “bubble”. Many have the misconception that it means “expensive”. Although a bubble can indeed mean the price of a good gets expensive during the short term, that is not what traders mean with it. When traders use the word “bubble”, they mean the price has accelerated parabolically. When something becomes parabolic, it becomes dangerous.
When I first got into Bitcoin, there was a small bubble in the price. The price eventually went up to 1000 dollars and collapsed again. Eventually, it went back up. That was when I started to talk about bitcoin, and I went from a bitcoin skeptic to someone who realized that I was probably wrong about it. I started to analyze bitcoin and took it more seriously. A few years later, I started making videos about it as well in 2017. In 2017, I started with bullish videos about bitcoin, but when the parabolic phase occurred, I started making bearish videos. I started saying Bitcoin had become dangerous when bitcoin went from 10000 dollars to 20000 dollars, and that we needed to think about this market as it is going to collapse.
Bitcoin’s Trend Today
Bitcoin has recently been in a messy sideways range for many weeks and months. Bitcoin is probably at the beginning of a LONG TERM wave 3 in the Elliot wave.The Elliot theory is like the Russian Babushka dolls; When you open one doll, there is a smaller one inside, then you open that one, and there is an even smaller one inside, and so it continues until the last tiny doll ha been opened.
The Elliot wave theory resembles that as it is about understanding what the trend of the market looks like. It explains the market is composed of five waves where each wave is composed of smaller waves inside of it.
Ever Since the second wave ended from the rally in March, I think Bitcoin has started and is at the beginning of an uptrend. This will be the start of a major up-trend. My target for Bitcoin eventually for the next few years is the higher 30~50 thousand range (although some consider this to be a conservative estimate).
So, we are only at the beginning of this up-trend, and I think that, at this moment, we are just entering the start of the new big wave 3 of the uptrend. Before getting to wave 3, there will be a market correction again as we end wave 2. The price of Bitcoin will go up to around 12000 dollars one more time, then there will be a correction in price down to just below 10000 dollars (10K), but that will be the last time we will be in the 10K dollar range. From there, we are going to go to even higher levels in the next few years.
I don’t Follow Financial News
I am not a huge fan of financial newsletters or media at all. I don’t find it particularly useful, but I find sentiment analysis very useful. There is a guy out the whose name is Jason Goepfert, who is a sentiment trader. His research is really good. However, I do pay attention to what other newsletter writers are saying, purely for one reason; often, there could be contrarian indicators. Sometimes article writers of these financial journals and media, who will write in extremely pessimistic tones, that often, is a contrarian indicator. There also are journalists who write in extremely optimistic tones as well. So, I go to a news site and just count how many positive and negative articles I can find on bitcoin. The more positives articles you see would be a good contrarian. However, if you see a lot of negative articles with very negative views on bitcoin, and other cryptocurrencies, then you can use them to your advantage. That could indicate we are reaching a turning point in the price.
Aviation Industry is Suffering Hard
I think the aviation industry and the restaurant industry are going to struggle hard, although it all depends on how the virus situation is going to play out. Some people say it will be over by next year, while others say it is not going to go away. Nevertheless, until a vaccine is developed, and we finally see infection numbers go down, we are going to see the airline and restaurant industry do badly and struggle.
However, the industry is not the same as the stock market. You might see airline stocks and the restaurant stocks pick up an uptrend in the next few months, but the industry still might be doing poorly. That is because the market, the price action, is different from the economy.
I am interested in looking at the charts of aviation and restaurant stock charts, to wait and see if an uptrend develops. Let’s take the company Boeing, for example, which is a huge company. I dislike Boeing because they received a massive bailout from the government. I don’t like that, because if a company is failing or is in trouble, it should not go to the government asking for a bailout. It is corporate socialism if you think about it. Other Airlines have also received massive bailout as well all over the world.
Anyways, as far as stocks are concerned, I think that Boeing is something that I am very much interested in to see if an uptrend develops. Once I see an uptrend develop, I am a buyer. We have to be careful here because some of these airlines are going to go bankrupt. I don’t know which ones, but the smaller ones are more likely to. If you see an airline stock price goes below 1 dollar, it will likely go bankrupt. I wouldn’t touch any stock that goes below 1 dollar as it is very likely it will go down to 0. One has to be careful even with stocks that cost 5 dollars because once a stock goes below 5, it could quickly get momentum towards the 2 ~ 1 dollar mark. The aviation industry, especially, will suffer a lot as will scale is decreasing in the coming years.
Interviewer , Editor : Lina Kamada
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(1) Cryptocurrency is not the legal currency that is supported by the government such as yen and US dollar. It is an electronic data on the Internet.
(2) The price of cryptocurrency may fluctuate drastically. There may be a sudden drop or loss of value, and you may suffer losses.
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