Transcription
Hey everyone, and thanks for jumping back into the cryptoverse. Today, we're going to talk about Bitcoin, a different kind of bare market.
If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the sale on Into the Cryptoverse Premium at intothecryptoverse.com. There, we do talk a lot more about other assets as well that I don't spend as much time talking about on this channel.
I do want to talk a little bit about the current predicament that we find ourselves in. And essentially, the predicament is that we know from history, whether you like it or not, uh, that Bitcoin tends to top out in the fourth quarter of the post-halving year. Q4 of 2013, Q4 of 2017, Q4 of 2021, and potentially Q4 of 2025.
Now, there's reasons that both the bulls and the bears can point to to say why they think they're going to be right. We did a video on this a few days ago called "Bitcoin, Maybe More Than a Few Days Ago," but it was called "Bitcoin: The Bulls Versus The Bears" or something like that. Um, but the general idea is that the bears think that, look, we had our bull market, right? We had the bull market. If you look at the ROI from the low and you factor in diminishing returns, you know, what more could we have asked for, right? Like, this is exactly what you would have expected a cycle. Bitcoin went up, what, how much from the lows? Like 8x from the lows, and it lasted the same amount of time as the last two bull markets. So, we can't ignore that just because we think, oh, there has to be something else.
Um, but while it's very much the same, almost perfectly right? Like, if any one of you a few years ago were told to draw a line for this bull market factoring in diminishing returns, would you not have drawn something similar to what exactly happened? Right? So, when you think about it, it played out like it always does.
But in other ways, it's so different because when you look at things like social interest, this orange line, it's nowhere close to what it was in 2021 or 2017. Nowhere close. Social interest is nowhere close to what it was back then. And in fact, if you were to just simply look at a metric like, I don't know, what's a good one? YouTube subscribers to various crypto YouTube channels, what you'll notice is that what we're seeing right now is nothing like 2021. Nothing like it, right? It is completely different in the sense of like, there's no retail interest here, at least no new retail interest.
So, one of the reasons you get like brutal bare markets is because you have a lot of retail come in, they buy the top, and then they end up acting as selling pressure for the next year. That's what happens. But in this case, we didn't really have that. And if you look at some of the indicators like the on-chain risk, it doesn't really suggest that we ever truly hit euphoria.
What I have said, and I will continue to say, is that this entire move by Bitcoin, the entire bull market that we have had for the last three years, this entire move is the most similar to this one right here in 2019. So, when I look at a top like the one that we probably had in October and say, look, it's the same thing as always, right? It's just that people thought it would go on longer because, you know, certain altcoins hadn't pumped yet.
But at the end of the day, what if the four-year cycle is intact? And what if we do get a bare market rally at some point back to 100K and it draws people back in, only to eventually go lower into the summer of 2026? I think that's very well likely what will happen. And the reason I say it is because while from a timing perspective, this bare market could not start, I mean, it it it couldn't be any more the same as all the other prior cycles. Q4 of every post-halving year. How could we pretend like it can't happen again just because it didn't go as high as people want, or just because certain altcoins didn't go up as much as people want?
In that sense, it makes sense to say we're in a bare market, right? Like it makes sense. And and in fact, like so many of the different indicators, breaking below the 50-week moving average, right? Breaking below the support from the prior year, you know, and that's something we talked about a lot is how Bitcoin was sort of stairstepping up, but now it's completely broken that support and it's come all the way down here. I could envision a scenario where Bitcoin kind of drops back down and then gets this big counter-trend rally back up and then potentially drops.
And so, what I'm what I'm sort of thinking, what I'm kind of speculating about right now is, if you don't top on euphoria, then what does the bare market look like? And do we have other examples? And yes, one is 2019. And one of the reasons why we compare this to 2019 is because back in 2019, Bitcoin actually topped out about two months before the balance sheet of the Fed started to go up. You can see that right here, right? Like Bitcoin topped, QT continued, and then the balance sheet started to go up. Bitcoin continued to go down at first.
So, what if it's the same thing where Bitcoin tops a few months before the balance sheet starts to go up and then maybe, you know, it goes up, but Bitcoin kind of still bleeds until there's a really big reason for the money printer to come back on. The issue that crypto has right now is that there's not really a great reason for interest rates to drop a lot and for QE to come back on because while Bitcoin is stuck in traffic on Struggle Street, the S&P 500 is basically printing new highs, right? So that's the hard part.
And what what ended up happening with with Bitcoin last cycle, Bitcoin, if you overlay Bitcoin onto this chart, Bitcoin started to go down, but it wasn't until the S&P crashed that led to this major shift in monetary policy that then led Bitcoin to massively new highs. So, the dilemma we find ourselves in is that there's always a bull market somewhere, and right now it seems to be metals and stocks. You could argue the only way that Bitcoin is going to really break out and go to new highs is for much looser monetary policy. But the only way you get to much looser monetary policy in practice is if the S&P were to start crashing.
Now, something different might happen. Powell, the chair of the Federal Reserve, is likely going to be replaced in the summer 2026. There does exist a scenario where they aggressively cut and do things they shouldn't do just because they want to run things hot, which would probably be a mistake long-term, but in the short term, it might actually be a good thing for for the markets.
But what I want to say again is, if you look at social interest and you color code the price of Bitcoin by by social interest, this does not look like 2021. It does not look like 2017. It looks like that 2019 style top. The 2019 style top has a lot in common with the current top in the sense that Bitcoin topped out and there was no alt season back then, right? So, if you look at at Bitcoin and you look at at what happened in 2019, Bitcoin dominance topped out the minute the balance sheet of the Fed um really started to go up, right? Like that's what happened essentially back then. The balance sheet started to go up and then Bitcoin dominance topped out. So, if you overlay Bitcoin dominance with the balance sheet, you can see that's what happened.
And so, some people like, well, why do you keep saying you're bullish on Bitcoin dominance? Because QT just ended. But remember, in 2019, QT ended in August, but the balance sheet still went down for a few weeks because there was still the final batch of treasuries uh that eventually matured, right? It took a few more weeks for for things to turn back around. So, I think there does exist a scenario where dominance spikes and then the balance sheet starts to go back up, and then all Bitcoin pairs form lows and then they go up at some point in 2026 against Bitcoin, but only because Bitcoin's dropping more than the altcoins until that looser monetary policy fully arrives.
So, when we talk about bare markets and when I, the title of the video, like "A Different Type of Bare Market," I'm looking at ROI after cycle peak and saying, look guys, what if this is just a normal four-year cycle? And, you know, this is the current bare market, this purple line, and this is what the last one looked like in 2021 or in 2022, and then here's the one in 2018, and then here's the one in 2014. What if it's the same as those? And if it is, it means that the bare market's going to last until October, at at approximately October of 2026.
But given the fact, and this is again, this is dubious speculation. I'm not saying I necessarily believe this is how it has to play out, but I want to put it on your radar so it doesn't come as a surprise later. Given the fact that Bitcoin is pot is is topping potentially here on apathy like 2019 before QT ended and when interest rates were were were being cut. Then what if the bare market is not like the midterm year bare markets of the past? Because remember, the cycles will always throw us a curveball, just like this cycle. The curveball is potentially no alt season, right?
So, think about it like this. If you're looking at the ROI from the peak, you're comparing the current peak to peaks that had euphoric tops. But why would we do that? Why not compare the bare market to the to the prior bare market from a non-euphoric top? And that, of course, would not be the 2014, 2018, or 2022 bare markets. It would be this 2019 bare market. And so, when you look at that, we just added this chart to the website. If you just look at QT, QT ending bare markets, right? Where QT ends, Bitcoin tops out. If you look at that chart, what if this is the path for the bare market?
And so, what what could happen is you could see Bitcoin sort of slowly go lower into the summer of 2026, but then as looser monetary policy comes in, it's not impossible for it to show renewed strength. Now, obviously, we ended up having the pandemic crash and the recession. So, what I'm saying is this, and I know this might be kind of complicated, and and the chances that it plays out completely are probably pretty low, but if we think about this for a minute, what if Bitcoin follows this path where it it it gets some rallies, but event it just kind of keeps going lower and then it just keeps going lower and everyone's getting upset and and it's not going anywhere and everyone's like, well, how could it be a bare market when there wasn't a euphoric rally and there was no alt season and all this other stuff?
The interesting thing is there's also a lot of people that believe the cycle will go on, right? And the four-year cycle is dead and and all this other stuff. What could happen is that you get to the point where you get to like April, May time frame where Bitcoin keeps going lower and the people that believe in the super cycle capitulate because they're like, "Oh crap." Okay, there's not it's not a longer cycle. It's a normal four-year cycle. They capitulate. What if they capitulate the lows? Because maybe it's not a normal bare market. Yes, there was the pandemic drop into a recession, and honestly, at the end of every business cycle, we do get a recession, right? Like it's part of the business cycle, but the timing of that could be still much further off than 2026.
In fact, if you look at the S&P 500 divided by the money supply, we've looked at this comparison many times before as well. When you look at this and you take the comparison here to 1996 and you look at a bar pattern from 1996 through 2000, right? You go all the way back here, 1996, and you look at what happened back then and you overlay it to this one. It's almost a carbon copy, including that 20% drop. Now, what's interesting is if you line up that 20% drop here, it could mean the party goes on until sometime in 2027, right?
So, both sides have a point, right? Like there's there's there's one-sided people that are like, "How could it be the top? Like, there's no euphoria here, right? If you look at all the top indicators like the like the terminal price and all this other stuff, like how could that be the top?" Well, guess what? That's exactly what happened in 2019 where it didn't go all the way up to the terminal price, and then eventually it went back down to below the realized price and the pandemic crash.
Now, I'm not saying it has to follow the pandemic crash, but just to put it on your radar, the realized price right now is almost 60K. And the reason why that's interesting is because when you look at Bitcoin, we also know that in midterm years, it tends to return to the 200-day moving average, which, oh, by the way, is currently at 56K. And remember, that's near the prior all-time highs.
So, what I'm saying is that there exists a scenario where we're in a different kind of bare market than people think, where it's it's a bare market from a non-euphoric top. And if that's true, then we need to look at the bare market that started in 2019. And if that's the case, you could have a scenario where Bitcoin does something like this, and it kind of drops down to 60 to 70K by the summer, and then that ends up being the low for a little bit, and maybe it starts to go back up again. I'm not entirely sold on this idea. I think that looking at it through the lens of a year-long bare market also makes some sense, but this is the reason why I would start to look for signs of a low as early as as May of 2026. There's also another reason, which I'll share later, but that's kind of one of the reasons why I think it makes sense to look for a low as early as May. But again, it it it could take longer.
If you guys like the content, again, make sure you subscribe to the channel, give the video a thumbs up, and again, check out Into the Cryptoverse Premium at intothecryptoverse.com. With all this stuff going on, make sure you check it out. Links in the description below. Thank you guys for tuning in. I'll see you next time. Bye.