The near flag Bitcoin has been trading in since November keeps leaking lower, with the price looking like it wan't to make a trip back down towards the 2024 chopsolidation range.
I’m very grateful for this deep research it really helps build confidence for what’s coming. There’s hope, even if rough times come. “Write it down; when it happens, stick to it.” Mark those words. Thank you, as always, for your incredible work.
That's what I find incredible when reading James. Since I started reading him, I've wanted only one thing: for Bitcoin to go down so that I can buy this fabulous orange coin without hesitation at a lower price haha
Thanks team! Sometimes you need to be reminded of all the work you have already done to build your conviction. There is a tonne of proof-of-work we've all done, and red price candles are temporary, but that work is much more durable.
The big ideas I keep coming back to as my conviction anchors are two fold:
1) I remind myself how incredible it is we can monitor Bitcoin's investor heartbeat using onchain data like this. We literally see people HODLing more coins for longer over time.
2) The quality of people who worked out that Bitcoin is special, is next level. Brightest people I have ever met, from all different backgrounds. All of us forged high conviction when the whole world, from governments to media, to our uncle, all told us we were insane.
Trying to make arrangement to loosen up some spare cash for a low to sub 70K buy.
Check for months now I've been very much appreciating one of the most amazing things to me about you and your teams work here is that I spend less and less time on X scrolling through a clusterfuck of dumbness to find little bits of signal.
One thing I would love for you to add if it's not already here is an acronym key with brief explainers. That would be extremely helpful
Thanks for the kind words, and we share the same feelings. I write and produce analysis here because I know there is an absolute gap in signal out in the wilderness of X. We get the best of both worlds, more considered analysis + more time in our life back.
As always your analysis are great and I love the progress been made in the website and the new charts. It will be interested to see what happens when the top buyers became LTH, what information we can get from March to May and the same for STH during this month that is starting at the low 80.
I don't think we're going to get lower than 70k and if we get there, is probably a double bottom from the 2025 low and hitting the floor in the next 2-3 months if it's not early. And like you said people will sell off in the recovery to get off the market.
BS hopium, but when Bitcoin bottoms and starts rallying, everyone will claim it was the rotation all along.
There will always be rotation between everything, especially now that Bitcoin has ETFs. What's more important, is to look at when Bitcoin investors rotate from speculative fast money, back to high conviction HODLers. That is the rotation that actually matters, twitter will always find a new narrative to explain it after the fact.
All I know about Wycoff patterns, is it often becomes a consensus narrative long after it was useful. I only ever see people talk about it when they have run out of other reasons to be bullish (Wycoff accumulation) or bearish (Wycoff distribution).
Fun fact, Aussies don't drink Fosters locally. It's one of our greatest scams on the rest of the world. We ran very Australian looking ads for foreigners to make it feel like drinking a piece of the outback, but we only export it. You won't find Fosters in any pub in Australia. We just ship it offshore.
Two posts every week. In the video for today's post, just after the intro I show you how to make sure your notifications and emails are on.
Please let me know if any of those settings needed changing for you because you're not the first person to say this (I think substack has a bug somewhere and I'm trying to diagnose it)
Once again, a big thanks for the quality and quantity of thought here …
I’ve separately been looking back at late 2022 to reflect on my own and others behaviour then and, coincidentally, your new chart on STH & LTH jumps out.
Back in late 2022 the world had gone to shit - central bank interest rates were up into the 2-3% range and forecast to at least double or triple, the S&P 500 had dropped 25% from its previous high, bonds were also down so that for the first time in its (theoretically 150 year) history the 60:40 (equities:bonds) portfolio was failing to provide investors with any protection, global supply chains were knackered from the pandemic (the PMI indicator was flashing bright red), Putin’s invasion of Ukraine was destroying oil and other commodity asset prices, and our beloved bitcoin had spectacularly tanked over 75% from the previous ATH!
What has struck me looking back is the collective goldfish behaviour of humans and their willingness to dive back in. This is shown on your chart by STHs (by the way, each time I write that I see the word ‘shitheads’) and how they flood back in to bitcoin. In reality this is less likely to be the same humans - they’d have to be demonstrating extreme levels of cognitive denial to compensate for the ‘peak-end’ bias from their recent losses, except of course for the sociopathic derivative degens, but more likely a cohort of fresh-meat retail buyers, along with degens and indirect buyers dipping toes behind the newly forming spot ETFs, treasury and other vehicles.
Your analysis is great for seeing events - candles - that indicate a bear market trigger to rush to the exit. I guess it would be far harder to analyse how the process of bull markets builds.
However, STH growth appears to initially overlay periods of chopsolidation, and could be driven - not by neat indicators - but in most part by human sentiment, narratives, group-think, hype and FOMO, etc.
Meanwhile, of course, there are macro indicators for the bulls (notably M2 supply and global liquidity) but none of this is apparent on Satoshi’s ledger.
But I wonder - is there something about your STH & LTH chart that provides a useful indication (albeit a lag rather than leading indicator) of bear and bull sentiment … enough to say, ok, let’s now also look at what’s going on in the heads of the smart folks and goldfish, such as the events at the end of 2022 and the bounce back in 2023.
Im still working through the right way to model it, but this is somewhat like how we assess a deteriorating market as we did from Oct -- > Nov using the HODLers wall. The 'shitheads' cost basis is first line of defence, then we hit a majority of their supply underwater, then unrealised losses push higher...and as price falls, things eventually reach a critical threshold.
This is a little bit like how the monthly chart takes MONTHS to reverse, but every bear market starts on the 1 min chart, and slowly propagates up to the daily, then the weekly and so on. It's this gradual deterioration / recovery that we're trying to model.
I haven't got the perfect solution yet, but I'm always coding new chart ideas in the background, and one day, I will land on the answer.
Incredibly good, thorough, and valuable report. Hoping that I didn't overlook it somewhere in this or the last report—can you say anything more about the time frame? In other words, what do you expect to be a reasonably good benchmark for the length of a second bear leg? I realize that this cannot be said with certainty, but just as I realize that I will most likely not buy at the bottom and sell at the top, it is valuable for planning the accumulation in order to distribute the more weighted DCA amounts well.
Thank you in advance, your reports and analyses are incredibly valuable, especially in times like these. Thank you!!
The time element is always difficult, especially in today's headline dominated market. The 2015 bottom was 12 months, 2018 was 5-months, 2020 was 1 day, 2022 was either 8-months or 2-months, depending on how you want to measure it.
All had their own characteristics and properties that make them unique. We'll only know as we ride through the storm. Instinct is, I think we will look back by the end of 2026, and this process will be deep in the rear view mirror.
My darkest worries: in past cycles, once bears cooled, existencial risk were off the table, and there was demand in side line, waiting to get in, large enough to push price moving the needle in TA, momentum, FOMO, narrative, retail blabla the know virtuous cycle.
In my perspective the garanteed demand waiting bears to cool right now are not large enough for our current marketcap to cause the same cascade effect. To ignite that virtuous process we would need, I conjecture, some strong fundamentals improvement like death of quantum FUD or relevant sovereign official demand and, maybe, even only strong regulatory clarity would be enough (but not sure).
The same rational that breaking 4-year cycle to the upside, itself, could ignite some fresh bull narrative the other way around also shall happen: if good vibes dont show up after bear cools it could ignite some new wave of hodler giving up.
I’m very grateful for this deep research it really helps build confidence for what’s coming. There’s hope, even if rough times come. “Write it down; when it happens, stick to it.” Mark those words. Thank you, as always, for your incredible work.
As always, your insights give me confidence to stand on what brought me to bitcoin in the first place.
At this point, I'm vigorously hoping for low 70s. I have some capital to deploy!
That's what I find incredible when reading James. Since I started reading him, I've wanted only one thing: for Bitcoin to go down so that I can buy this fabulous orange coin without hesitation at a lower price haha
Thanks team! Sometimes you need to be reminded of all the work you have already done to build your conviction. There is a tonne of proof-of-work we've all done, and red price candles are temporary, but that work is much more durable.
The big ideas I keep coming back to as my conviction anchors are two fold:
1) I remind myself how incredible it is we can monitor Bitcoin's investor heartbeat using onchain data like this. We literally see people HODLing more coins for longer over time.
2) The quality of people who worked out that Bitcoin is special, is next level. Brightest people I have ever met, from all different backgrounds. All of us forged high conviction when the whole world, from governments to media, to our uncle, all told us we were insane.
I'm not betting against that pool of people.
the best analyst in the bitcoin space bar none. and the temperment to match it.
Thank you for such kind words, genuinely makes my day.
Great article, thanks - again! Do you plan to send short-term alerts when you think such a nasty red candle may have just occurred?
As soon as I am awake, coherent, and have a chance to write the piece, this will be the first place I will post about it.
🥰🙏🏻
Another day another banger.
The floor model ties in really well with the concepts explored in the last post!
Trying to make arrangement to loosen up some spare cash for a low to sub 70K buy.
Check for months now I've been very much appreciating one of the most amazing things to me about you and your teams work here is that I spend less and less time on X scrolling through a clusterfuck of dumbness to find little bits of signal.
One thing I would love for you to add if it's not already here is an acronym key with brief explainers. That would be extremely helpful
Thanks for the kind words, and we share the same feelings. I write and produce analysis here because I know there is an absolute gap in signal out in the wilderness of X. We get the best of both worlds, more considered analysis + more time in our life back.
Noted RE acronyms, good suggestion.
Prescient article, James.
As always your analysis are great and I love the progress been made in the website and the new charts. It will be interested to see what happens when the top buyers became LTH, what information we can get from March to May and the same for STH during this month that is starting at the low 80.
I don't think we're going to get lower than 70k and if we get there, is probably a double bottom from the 2025 low and hitting the floor in the next 2-3 months if it's not early. And like you said people will sell off in the recovery to get off the market.
Mate. Have been loving the analysis lately and it is helping immensely in my thinking about my DCA allocation and ‘letting the market come to me.’
I’ve still fomo bought the rip a couple of times, but have also nailed a couple of nice chunks in the low 80s.
Just wanted to ask you, is the ‘rotation’ from PM into corn actually a thing? Or is it a BS hopium twitter narrative?
BS hopium, but when Bitcoin bottoms and starts rallying, everyone will claim it was the rotation all along.
There will always be rotation between everything, especially now that Bitcoin has ETFs. What's more important, is to look at when Bitcoin investors rotate from speculative fast money, back to high conviction HODLers. That is the rotation that actually matters, twitter will always find a new narrative to explain it after the fact.
Does the often talked about Wycoff pattern carry any significance with you?
All I know about Wycoff patterns, is it often becomes a consensus narrative long after it was useful. I only ever see people talk about it when they have run out of other reasons to be bullish (Wycoff accumulation) or bearish (Wycoff distribution).
Gracias! Buy you a Foster's next time you're in Seattle.
Would gladly take you up on that!
Fun fact, Aussies don't drink Fosters locally. It's one of our greatest scams on the rest of the world. We ran very Australian looking ads for foreigners to make it feel like drinking a piece of the outback, but we only export it. You won't find Fosters in any pub in Australia. We just ship it offshore.
Incredible alpha in this comment section
This is the first sub stack notification I have received in weeks! I thought you were on a long holiday 😔
Two posts every week. In the video for today's post, just after the intro I show you how to make sure your notifications and emails are on.
Please let me know if any of those settings needed changing for you because you're not the first person to say this (I think substack has a bug somewhere and I'm trying to diagnose it)
Once again, a big thanks for the quality and quantity of thought here …
I’ve separately been looking back at late 2022 to reflect on my own and others behaviour then and, coincidentally, your new chart on STH & LTH jumps out.
Back in late 2022 the world had gone to shit - central bank interest rates were up into the 2-3% range and forecast to at least double or triple, the S&P 500 had dropped 25% from its previous high, bonds were also down so that for the first time in its (theoretically 150 year) history the 60:40 (equities:bonds) portfolio was failing to provide investors with any protection, global supply chains were knackered from the pandemic (the PMI indicator was flashing bright red), Putin’s invasion of Ukraine was destroying oil and other commodity asset prices, and our beloved bitcoin had spectacularly tanked over 75% from the previous ATH!
What has struck me looking back is the collective goldfish behaviour of humans and their willingness to dive back in. This is shown on your chart by STHs (by the way, each time I write that I see the word ‘shitheads’) and how they flood back in to bitcoin. In reality this is less likely to be the same humans - they’d have to be demonstrating extreme levels of cognitive denial to compensate for the ‘peak-end’ bias from their recent losses, except of course for the sociopathic derivative degens, but more likely a cohort of fresh-meat retail buyers, along with degens and indirect buyers dipping toes behind the newly forming spot ETFs, treasury and other vehicles.
Your analysis is great for seeing events - candles - that indicate a bear market trigger to rush to the exit. I guess it would be far harder to analyse how the process of bull markets builds.
However, STH growth appears to initially overlay periods of chopsolidation, and could be driven - not by neat indicators - but in most part by human sentiment, narratives, group-think, hype and FOMO, etc.
Meanwhile, of course, there are macro indicators for the bulls (notably M2 supply and global liquidity) but none of this is apparent on Satoshi’s ledger.
But I wonder - is there something about your STH & LTH chart that provides a useful indication (albeit a lag rather than leading indicator) of bear and bull sentiment … enough to say, ok, let’s now also look at what’s going on in the heads of the smart folks and goldfish, such as the events at the end of 2022 and the bounce back in 2023.
Cheers
Im still working through the right way to model it, but this is somewhat like how we assess a deteriorating market as we did from Oct -- > Nov using the HODLers wall. The 'shitheads' cost basis is first line of defence, then we hit a majority of their supply underwater, then unrealised losses push higher...and as price falls, things eventually reach a critical threshold.
This is a little bit like how the monthly chart takes MONTHS to reverse, but every bear market starts on the 1 min chart, and slowly propagates up to the daily, then the weekly and so on. It's this gradual deterioration / recovery that we're trying to model.
I haven't got the perfect solution yet, but I'm always coding new chart ideas in the background, and one day, I will land on the answer.
Incredibly good, thorough, and valuable report. Hoping that I didn't overlook it somewhere in this or the last report—can you say anything more about the time frame? In other words, what do you expect to be a reasonably good benchmark for the length of a second bear leg? I realize that this cannot be said with certainty, but just as I realize that I will most likely not buy at the bottom and sell at the top, it is valuable for planning the accumulation in order to distribute the more weighted DCA amounts well.
Thank you in advance, your reports and analyses are incredibly valuable, especially in times like these. Thank you!!
The time element is always difficult, especially in today's headline dominated market. The 2015 bottom was 12 months, 2018 was 5-months, 2020 was 1 day, 2022 was either 8-months or 2-months, depending on how you want to measure it.
All had their own characteristics and properties that make them unique. We'll only know as we ride through the storm. Instinct is, I think we will look back by the end of 2026, and this process will be deep in the rear view mirror.
Thanks so much!
Is there a chart that shows the known long term holder utxos accumulating / selling. Not just singular coins but addresses stacking?
My darkest worries: in past cycles, once bears cooled, existencial risk were off the table, and there was demand in side line, waiting to get in, large enough to push price moving the needle in TA, momentum, FOMO, narrative, retail blabla the know virtuous cycle.
In my perspective the garanteed demand waiting bears to cool right now are not large enough for our current marketcap to cause the same cascade effect. To ignite that virtuous process we would need, I conjecture, some strong fundamentals improvement like death of quantum FUD or relevant sovereign official demand and, maybe, even only strong regulatory clarity would be enough (but not sure).
The same rational that breaking 4-year cycle to the upside, itself, could ignite some fresh bull narrative the other way around also shall happen: if good vibes dont show up after bear cools it could ignite some new wave of hodler giving up.
Superb analysis once again🙌