Market Chaos: Is the Bitcoin Bull Run Over? | Checkmate

24:40But if we get outflows sustained all of next week, probably not a great sign and the market price will probably take a hit accordingly. If the ETFs don't actually have a major outflow and they start to recover, and we've seen this many times, you get an outflow for a couple of days or a week and the next thing you know, you're back to three times the size of inflows. And not that ETFs are the only buyer, but it's a very, very just like classic example of the demand profile. So let's see what the ETF investors do, because generally speaking, what you see going on in the ETFs is pretty coincident with what's going on in the on-chain world.

25:13And outflows correspond with futures deleveraging, which correspond with people locking in losses on-chain. And when it flips around, when the bull starts stepping back in, the inflows pick back up, the futures open interest picks back up, so on and so forth. So these things all generally speak the same language.

25:27Checkmate:So one thing that I saw you tweet, and something I'd also been thinking about, is how basically the entire market global market not just sort of bitcoin crypto but like everyone is going to be watching bitcoin this weekend to see what's going to happen on monday and i think that's one of the really interesting things about bitcoin being a 24 7 market um because basically if bitcoin starts ripping people are going to start thinking that we're going to have a v-shaped recovery um and just to add to that one of the really interesting things is did you see that bitcoin was dropping before the trump announcement and i love this idea of bitcoin almost being like a prediction market of macro events?

26:05No, there's two ideas that I want to float here, which I think are quite interesting. The first one is gold. I think gold and Bitcoin are special assets. Obviously, we know that Bitcoin is a special asset, but I think that for that specific reason, they're actually more information. They're as much information as they are an asset. So why would you go an old, an inert yellow rock or a magic orange coin, right? These are the two things. Why would you do this? They don't yield any money, blah, blah, blah. there's obviously a signal that people put in to buying these like just hard scarce serious assets gold i think tells us where we're going bitcoin tells us the road to get there so let's just one interpretation of that gold has told us that they're gonna print the money they have to debase to cover the all whatever hole forms i don't know what the hole looks like but you know that nothing stops the train and they've got it coming gold smells that first bitcoin is very very sensitive to local conditions.

26:58So it may sell off telling you something is wrong. This is the thing, why all these traders are looking at Bitcoin, because they know that the equity market is stretched on any valuation metric you want to pick. Now, that's obviously because the denominator is wrecked in fiat, but that doesn't mean that people, not everybody believes the debasement trade at the same time. There's a lot of people who just look at their fiat number, and that's just their fiat number. So when the market starts to tank, Bitcoin might actually you'd be saying, guys, there's something wrong here. And the trade after the trade, the down before the up, is more or less what gold is telling you.

27:32So gold tells you where we're going. Bitcoin tells you the road to get there. The other one, and on that idea of like over the weekend, and it's kind of hilarious how Trump tweets this on a Friday afternoon when the markets are closed. I don't know why, but the bond market apparently is closed on Monday and the bond market is the only thing that's going to call Trump's bullshit. So like the whole thing is just very on brand for 2025. but the other one is if you're a trader and you like yeah bitcoin sold off and you're gonna get all these trad fi analysts saying oh look bitcoin's a shit coin and not a store of value and blah blah if you're a trader and you want to do something on monday morning it might make sense to hold a bit of bitcoin because sure the price might be down 12 but you can still tap that liquidity to do something with it on monday so it might make sense to get some and if you're an investor like you and I, generally speaking, Bitcoin actually recovers just fine after this.

28:22So suddenly you're like, well, if it goes down and then it goes up again, well, maybe I should actually get some. Maybe this is an opportunity. So for both the fast money and the slow money, the fact that Bitcoin trades 24-7 gives you a liquidity tap when you need it, but also tends to recover after enough time, both of those are good cases to actually have some in the portfolio. So the case for Bitcoin is actually very, very strong. So they're the two kind of general ideas I want to share, but every single trader and macro analyst in the world is going to be staring at the Bitcoin chart on their Bloomberg terminal all weekend because it's the only information that they have.

28:55And the more people that do that, when Bitcoin recovers, because it will recover, I don't know when, but it will recover. They're all going to go, oh, all right, fine.

29:04Checkmate:Now I actually have to get some because I'm just wrong. I'm just wrong. I don't know if I'm being naive, but because you see these things. I mean, this is obviously an exceptional event, but you see things like this happen all the time. And Bitcoin tends to, like, I'm, you know, leaning towards this idea that it's Saturday the 11th at the moment. Tomorrow, we're probably going to have a pretty good day for Bitcoin. And coming to Monday, the market might call Trump's bluff and maybe guess that he's not going to be quite as aggressive as he's sort of signaling. Is that where you're at? Yeah, look, it is.

29:35Checkmate:This is going to come out on Monday, by the way, so we might look like this. No, no, no, that's fine. And look, I was on Marty's pod the other day and I said, look, if we get back to 110K, it's concerning. And truthfully, it is. So the short-term cost base is about 114K. The reason I like that level, and it's not a perfect price. It's a zone of interest. But the fact that we're below that price, it means that there's a lot of people who are now about 50 % of all people who've bought recently are now underwater. So all of those folks, some of them are going to be serious Bitcoiners. Some of them are going to have bought and be like, oh shit, now I'm down on my position, not feeling so good, maybe I might not buy the next dip.

30:10So 110K is kind of the top down where things can start to get a bit hairy. Down below 105, things get increasingly hairy and below 95, things get really quite hairy. And I'll talk through those levels in just a second because there is rationale and logic to it. But as always, we've just got to see how the market responds. There is absolutely a case that we get a V-shaped bottom or we get one more leg lower and then it goes. But really it all comes down to how much damage does the sell-off do? And that's really what I try to model out and say, well, where are those tipping points when people start to feel a bit sensitive?

30:41Of that hodler's wall, how deep does the crack have to get where all these people are suddenly underwater that it just breaks sentiment the way that it did in May and December of 21?

30:53Checkmate:And I would guess you're not looking at this as a Bitcoin-specific potential like buyer market. I think really what's going to happen now is Bitcoin is going to tell us whether the entire market is going to go into bear market territory with these tariffs? Potentially. Potentially. I mean, if we're talking about the wider market with equities, yes. You could argue that Bitcoin is sending a signal that something is not quite right, generally speaking. I think that there'd be a lot. Again, I'm not an equity analyst, so I have no edge in this, but I certainly listened to a lot of guys talking about it.

31:25It's kind of hard to find too many people saying that these are the cheapest stocks that we've ever seen. Generally, it's kind of not the cheapest stocks we've ever seen. In fact, it's quite the opposite. But again, we've got a debasement trade on. So it's all these very, very tricky things of what does the majority believe? I mean, for me personally, I think the biggest risk to Bitcoin is actually just the wider market. I don't think there's anything internal with Bitcoin. In fact, I wrote a piece on Friday, actually, which was more of a macro view. I was revisiting a study I did in January, where back in January, I basically said, look, I don't think we actually have had enough capital flow in to justify a move to 150.

32:05So I revisited that study because obviously I've been chopping sideways and more or less gone nowhere since January. And now I'm actually of the view that we have had sufficient capital inflow to justify a move to 150. Now, that doesn't mean it happens tomorrow, but it means that like from a fundamental standpoint, we have actually seen enough real measurable capital invest in Bitcoin to, in my opinion, justify the move to 150. so that doesn't mean we go to 150 tomorrow but it does mean that like that's for me that's where we belong and the difference between now and january is i think we belong we should stay there but that also means if we go down you start entering value and deep value zones much sooner because like there has been that capital inflow now of course all things in markets and i actually encourage everybody this is a superpower in markets always hold two competing ideas at the same time at a fundamental level, I'm of the view that we actually deserve a run at 150.

33:01And therefore, the lower the price goes, the more undervalued or undervalued the thing actually is. Now, that doesn't mean that if we break through certain levels and you get too many people on the wrong side of this trade, you can start to shatter sentiment. So it doesn't matter where your fair value fundamentals are because things can get, which are oversold, can get way more oversold. And there's certain tipping points that might be worth going through now if you want.

33:24Checkmate:Yeah, let's do it. okay um actually i just want to quickly just snapshot this chart because i think this is a great example of what just happened uh this is a funky looking just to try and describe it in fact i can't describe it i've never seen a chart like this i know i know it's amazing so basically you'll have seen like charts where it's like a quadrant so for folks who are listening this is basically a quadrant chart and on the x-axis shows me how much open interest increased or decreased in percent so if you're on the left hand side of the chart it means open interest got flushed out. If you're on the right-hand side, it means that people are adding more leverage.

33:59And the vertical axis, the Y-axis is what did the Bitcoin price do? Did the price go up or did the price go down in percent terms? So if you think about these quadrants kind of clockwise, left, right, down, right? At the top, you've got the price rallied and people deleveraged, which means it's a spot-driven rally. On the right-hand side, which is where we currently are, so basically the market over the last two weeks, went up into a spot-driven rally. Price went up, but leverage wasn't so much. And then we went to the top right quadrant where open interest grew massively. People levered up and the market went up.

34:36And then we went crashing all the way back down to the bottom left-hand quadrant. So price got nuked. We went down on the Y-axis and open interest got absolutely flawed. Now, the default view on this chart that I have set on my website, it's like plus or minus fight 10 % on either direction. I have to actually expand the range of this chart because the deleveraging that we just saw was so mammoth over the last seven days that it just blew out the chart. So basically people levered up into the rally and then we just got wiped right back down again. So that deleveraging, is the part of this that is just normal market dynamics that when

35:16Checkmate:things get over leveraged, people want to wash that leverage out of the system and the Trump news was kind of just an excuse to do that. Yes. Yeah. And I think that's another way to just hold, if we're going to talk about bear market potential here, as I think a lot of Bitcoiners know, Bitcoin hasn't quite gone up as much as you would have liked in 2025. It is very obvious to anybody looking that we've had a slowdown in momentum. Now, what we saw over the last two months since we hit that first 124K all-time high, and we'll talk about this in just a second, a lot of people have bought, like a lot of people have bought above 95K.

35:48This zone is really where Bitcoin lives now. And so therefore, if you go below it, things can get hairy very, very quickly. But we haven't with kind of the bull market, momentum has slowed down meaningfully. And sometimes markets just look for an excuse to just like the straw that breaks the back. And it could be that because everyone's looking at the Bitcoin price now and the altcoin price, they're now going to go, oh shit, maybe I should take some risk off my equities on Monday. And then that risk off on equities creates downside elsewhere. And then you get this cascade. So So just be very, very cognizant that we could, we may, there is a possibility that we have actually just like broken spirit across the board.

36:26And then we go back to my original analogy and saying gold is showing us where we're going. Bitcoin's showing us the road to get there, probably down to go up if that's the case. If on the other hand, we don't get those things play out, right? And Bitcoin does get back above, I would say 118K is an important level because that's where like in our local trading range, that's where the most volume is. It's what's called the point of control. If we get above 118K, then I think we're off to the races, right? And by the way, I said that before we went to 126K because that was kind of that threshold where if we get above it, it's good news.

37:01And then now that we got above it, it's like, well, we kind of have no place going below it. And yet here we are. So the fact that we're now below it, you've now got to just at least put a caution goggle on and just be cognizant that we may just have snapped sentiment. We may not have, but just be aware that that is a possibility. All right, let's go on to the next one. Okay, so this is really where I think the meat of my work has been over the last couple of months. So again, for folks listening, this profile, basically we're looking at like a bar chart, and it shows on the x-axis is the Bitcoin price.

37:35And the height of the bars, it's called the URPD, it basically shows where all the supply was. Now, this is in BTC terms. so you can kind of see there's a whole stack of coins down at zero dollars because that's all satoshi and early miners there's a whole bunch of coins down like 55k to 70k there's a gap between 70k and 85k or 80k but if you look at the bulk of when the majority of btc are right in terms of recent history 30 of all bitcoin have a cost basis above 95k 30 of all coins and above 110k where we are right now, 15 % of the supply. So if you kind of think about our current price range, 95 is the bottom and then 110 is the midpoint.

38:18So we've got half above, half below of the recent buyers. Now you can see in the red there, basically all the coins that are in loss right now, and it's pretty meaningful. So just for those who are kind of watching the chart, envision that the price goes down to 95. Suddenly all of those coins that are above that red line there are all in loss. They're all people who've bought recently. They could be ETF buyers. They could be treasury company buyers. They could be retail. They could be investors, traders, whatever it is. Suddenly, all of those coins are underwater in their position. The ones that bought at 120 and 125, they're going to be down a whole lot more than the ones that bought at 95.

38:56But the guys who bought at 95 have been waiting all year to not be underwater. Suddenly, they're underwater. You can imagine the hit that that puts onto our overall sentiment. So this chart, kind of lock the overall profile into your mind. This is in Bitcoin terms. But as we know, the vast, vast, vast majority of people, except for the hardcore Bitcoiners out there, and even you probably still think about things in fiat terms. Sure, 30 % of all the dollars invested are up here. But if you price every coin when it last moves, being like an estimate of their real invested capital, the dollars people have invested, Satoshi's coins are worth zero.

39:33So now they disappear off the chart. 62 % of all dollars invested are above 95K. Now, yeah, exactly. And above 110K, 35%. So 35 % of all the dollars ever invested are now underwater. And if we go down to 95, 62%. That's a majority. So then you start saying, well, what is going to break people's sentiment? It's not going to be their Bitcoin being underwater. It's going to be their investment portfolio and the green number going to a red number. That's the thing that can break sentiment. Now, as I've said before, we're down 12 % from the all-time high. We've recovered from this. We've actually seen this kind of damage many times.

40:12What we are looking at right now is not atypical for a bull market. In fact, it's actually quite normal for a bull. But once we go down to 95, we start testing the level of we haven't really recovered from that many sell-offs in the past with that much damage. So it's one of those things to just be aware of that it gets worse in terms of sentiment, in my view, at an accelerating rate as we go from 110 to 105 to 100 to 95. It's like an exponential curve of how nasty it is. And this is why I say we have no place at 110. Here we are at 110. We go to 105. If we had no place at 110, then we have no place at 105.

40:51And if we have no place at 105, you start going to 100. so you can see how this like bear market potential and that's why i talk about that december sell-off it just kept going lower and it just kept breaking people's sentiment and that's what i would i generally call a top heavy market you have too many people that bought too many coins at too high of a price and that is really defined by as the price comes down through those levels people just start to move into loss so again hold two thoughts in your mind at the same time we have recovered from dips like this many times. Right now, not atypical.

41:25But the gap between not atypical and kind of nasty is between here and 95k, which is not a very big price range and it won't take a lot to get down there. So just be really, really sensitive to that, really to how sensitive the market is.

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43:55Checkmate:That's river.com forward slash WBD. You've been talking about that 95k level for a little bit now. And if we do get there, and I completely agree that sentiment will be shot at that point in a lot of ways, we enter like a real bear market potentially. What percentage chance do you put on us actually revisiting that price? Yeah, that's a very good question. So if you had, honestly, if you had to ask me before this sell-off, I probably would have said like, I don't know, maybe 10%, something like that. But now I'd say, I mean, again, gut feel, probably 30. I would probably put it as a one in three.

44:31And honestly, in order to get that one in three, it very much depends on what we see the equity market do Monday, Tuesday, Wednesday. If we just see like just this thing metastasize and things really start to fall down, then the odds just, and as I said, the odds rapidly increase. And the lower we go, this is kind of the nature of markets, right? You have to always be so flexible as things come to light. my thesis was we have no place at 110k once we broke to all-time high here we are if the bulls don't make a stand here then they're even more on the back foot so like i would call 95k that's like the bulls last stand and i say this all the time to my subscribers it's like if we get to 95k it's the bulls last stand it is the level where the bulls are going to put up the biggest fight but the second idea you've got to hold the competing idea is why did they let it get there in the first place?

45:23So you've kind of got to hold that view. We can hold the last stand, but you really shouldn't have got to the last stand in the first place. So getting below 114K was important. That's the short-term cost basis. That's that tipping point, 50 % of all recent buyers are underwater. We're just in that really sensitive point where the bulls have to step in. They got to step in in the near term because the gap between here and nasty

45:46Checkmate:is not much you know like on a more sort of macro level um trump just says stuff and with this he just like shot from the hip said he was going to tariff china an additional 100 percent um i don't know if that's feasible if he's doing art of the deal stuff and and what that will actually wash out and be but he will obviously have seen this you know what's happened in the market since he made that announcement do you think he'll allow that to continue or do you think he'll have to backtrack on his words and the tariffs won't actually end up being as aggressive as how he's telegraphed it so far?

46:18That's a very, very good question. And I certainly am not going to say that I'm an expert on Trumpisms. My gut feel is, yes, it probably is a bit of art of the deal because if you put 100 % tariffs on China, I think the US is a major problem. I just don't see how that's tenable. Kind of makes sense why you would do this on the weekend. But I also worry that Like because valuations have been so stretched for such a long time. And again, if I, if I, and I do, I believe Bitcoin is an information index as much as it is an asset. Bitcoin not really ripping while equities and gold have been going. It's just had this caution flag on me going like, why is it actually telling us that something ain't right?

46:59And this could just be the straw that breaks the back. And Trump may think that he can then just like, oh no, don't worry. I'm having the meeting with Xi again. And the market says, I don't care, man. I'm done. I'm out. I'm finished. Like the damage is too bad. I've got to get out. he might set away a train that he just hasn't kind of thought through stopping. It kind of depends what the bond market does as well, which we're not going to know until Tuesday US time. So there's just a whole lot of things that he may, maybe, I don't think he can put 100 % tariffs on. I would say that there's a back down, a taco trade.

47:28But again, what am I going to do? Base my thesis on what Trump says. I mean, it's a tricky, tricky state of affairs.

47:36Checkmate:I mean, trying to guess what Trump's going to say is almost impossible. But the interesting thing as well, in terms of like Bitcoin has obviously been a signal that the market is going to be paying very close attention to. But I think gold is also. And while everything was selling off massively, gold was fine. I think gold was up on the day. It was still above 4K. What's that saying? I think that's the trade after the trade. I think whatever comes between here and now, if you close, like if I had to make a call what I think happens from here, I think we probably have some downside across all markets.

48:07That would be my gut feel. I think we have some downside. And then I just think that the liquidity cannon has to come in right now. The challenge is how much does the fall have to happen? Because we know that that's the response and it tends to be a response rather than be a prophylactic where they come in and just do it anyway. So I think we actually have the down to go up. And I think gold is telling us where we're going and I think Bitcoin is telling us the road to get there. That's my kind of general base case thesis. I don't like the road 110K, honestly, because I don't think we belong here.

48:37I think we belong higher. And that tells me maybe there's something wrong, just like external to the world. And Bitcoin is actually just telling us information. And as a Bitcoin analyst, I like to listen to it.

48:46Checkmate:It's one of the most interesting times in Bitcoin in a long time. And just to get the popcorn out, I'm quite enjoying it. But let's get on to the next one. What have we got here? Yeah. So I want to just close out this section because as we talk about this whole thing, I've mentioned some thresholds here. And again, they're kind of these nice 5K increments, which again, aren't that far apart. 114 is the short-term cost basis where below that half of all recent buyers are underwater. 110K, right now, if you look at the Bitcoin market cap, 2 % of it is currently unrealized losses. Now, we can also then model.

49:21Now, by the way, that's very, very normal. The next chart, which is the last one, will help just explore how bad does it get during these major bear market starting sell-offs. And by the way, just again, for people in the audience who were listening, we're looking at that same bar chart, except instead of looking at things in terms of Bitcoin terms or USD invested terms, we're looking at in terms of the profit and loss, the paper gains they're holding. So now Satoshi's got billions of dollars of unrealized profit. The guy who bought at 125K, he's down that 12 % on his purchase price. It's showing us the dollar value of unrealized profit and loss using on-chain where basically the UTXO set.

49:58So right now, 2 % of the market cap is underwater. So let's now imagine that the market sells off further. We go down to 95K, suddenly 5 % of the market cap's underwater. We go down to 85K, 10 % of the market cap's underwater. We go down to 15K, 75K. 75K is where 15 % is underwater. So the reason I've highlighted these price levels, so again, 95K at 5%, really an important one to just flag. if we look at the next chart which is the final one of that bitcoin market cap this is what the unrealized losses look like in bull and bear markets and very very different in bulls to bears so in a bull market we've seen regular like five percent ten percent of the market cap go underwater in both 24 and 25 both of those correction chop solidation phases we had about 10 % of the losses.

50:49They're somewhat high, relatively speaking. So the bull market has actually sustained some pretty nasty punches. Where we are right now, you actually have to squint to see it. So if we go down 100 to 95K, suddenly you're at that bull's last stand and the losses start to get meaningful enough. But once you get above 10%, once you get to like 15 % or 20%, this is what we saw in mid-2021. This is what we saw in December 2021. It's what we saw at the start of the 2018 bear market, there's just a certain level of damage to people's portfolio. And I have this feeling where we have a more sensitive audience now.

51:27Tradify guys don't want to see a 30 % pullback. This is a bit much for them. They're calling the Fed for a bailout at 10 % down. So if we go down to these kind of levels, I think it's like the sensitivity is actually arguably more. So really, if we get down to 95, that's why I think it's that bull's last stand. 5 % of the market cap is going to be underwater. There'll be a bunch of people taking panic profits as well, which brings more and more coins up to that level. There'll be people locking in losses, but generally speaking, I think that that's kind of my, for now, that's my working thesis of like, we've got to hold that level.

51:59And if we don't want to get there, then really we've got to hold higher up because things just get acceleratingly nasty as we go down.

52:07Checkmate:Let's get into the last one. And then I've got a few questions for you. Yeah. So that kind of picks where the state of the market is, at least from my view. And again, all we can do here is theorize over when investor behavior changes. And that's how I like to run my analysis. It's not about predicting the future. It's about saying, if we get to this threshold, upside or downside, where do I think the tipping point of investor behavior is? Now, again, a lot of people are looking at, oh, it's price suppression. Oh, why isn't the market going up? And it's all bullshit. the sell side pressure from long-term holders is massive 2.5 billion a day a day in coins coming back to markets whenever you see sailors bought like you know 400 million dollars worth like okay good long-term holders sold like six times as much as that on a single day and some people will argue and say that oh you know coins that are six months old they're not long-term holds like it doesn't really matter because one sold bitcoin is one sold bitcoin the whole idea is that after six months the odds of that coin having come back to life is insignificant compared to coins younger than six months.

53:07So they all behave in a very, very similar way. And that is that they don't do much until they sell usually in bull market trends. So just like a broad picture, there's a lot of sell side pressure. We've clearly had this deleveraging event. There's a chance that we have kind of just tweaked people's sentiment. You know, all this being said, right i still actually believe that we we end the year higher however my tipping points are very very well defined because the lower we go down towards 95 just the the the less bullish i can be at an objective level because we have seen this story many times before we're only 12 off the all-time high right we're a long way from this getting broken but that long way is a small price move so really it's all about what the bulls do from this point onwards and whether we see a relaxing of some of this sell side because right now it's pretty sizable.

54:00Checkmate:So it sounds like you're still bullish, but cautious at this point. The question I would have for you there is like when we've spoken in the past, I always complain about this not being an exciting enough bull market and you always tell me to manage my expectations. But we've not had the same exponential run-up that we've had in previous bull markets. And the thing that you quite often say is that sort of the bull market will author the bear market that follows. So if we are now entering a bear market, let's say that 30 % chance or whatever it is, what do you think a bear market looks like? Great question.

54:33So my base case as it stands today, there's a model that, sorry, a lot of people will be aware of the realized price. Now the realized price is the average cost basis per unit of Bitcoin in the whole supply. So it includes Satoshi, it includes all these folks. um we have hit that in every previous bear market now right now from memory it's like 55k or something i think that's too brutal and there was a study that dave pule and i did in 23 i think 22 i forget called coin time economics and in that study um it's a big monster of a piece like 122 pages of on-chain wizardry and strange you know nuance uh what we basically found is that the realized price, it doesn't quite make sense moving forward.

55:19We expect it to lose signal over time. And the reason to be at the break-even level, which means price goes down to 55K, we're at the realized price. For price to be at break-even, you need guys who bought the top, people who are active and actual real people to have losses equivalent to the massive profits held by Satoshi and lost coins that don't respond to the market. So you've kind of got these, let's call them dead entities, and they've got massive profit. And in order to be at break-even, you've got to offset them with massive losses. Now, sure, that's what bear markets are, periods of massive losses.

55:52But I think that Bitcoin is just a different animal now. It's just matured to a different level now. People actually want to buy it at a serious level. We talk about$2.5 billion a day, and we're 12 % off the all-time high, and this has been going on for months. Guys, there's a lot of demand here. One sole Bitcoin is one bought Bitcoin at the same time. So in that coin time economics piece, we came up with another model called true market mean. And we actually developed this purely from first principles. We get rid of what's called the thermo cap and production costs and all that stuff. And we only look at active investors, people who are active in the cycle.

56:28Now that model, after we developed the first principles, when we run the statistics of how the price actually oscillates around it, it's quite remarkable, dead center. The long-term mean and median of how the price oscillates around it is one. And we've spent 50 % of our time above it, 50 % below it. Very, very strange, but dead center. So it was right in the middle of that 2021 cycle, about 30K. Right now it's about 80K. What else is at 80K? Well, the average cost basis for the ETFs is at 80K. sailor is like 75 i think um uh the class of 2024 if you just like do a on-chain volume weighted price is about 80k so there's a lot of like cluster down there at 80k and that to me that's where i've been looking at it being the most likely place if we do just bear out we probably go down somewhere to like 80k zone and then from like a more fundamental standpoint i think bitcoin improve that we're a trillion dollar asset in 2024 i really do like and that's 50k so you know let's add a premium to that because honestly we belong above a trillion let's not kid ourselves here you know that 2024 chop solidation range the top of it was 75k we bounced off it in the tariff tantrum in in april and again i think things have to get really nasty to get down there like i truly and i say this honestly i do believe bitcoin belongs up at 150 and it belongs to stay there.

57:50We've seen the capital inflows to justify this now. So anything below that to me is just the lower you go, the more the deep value, but being aware that markets take time to process this stuff. So that's my general view.

58:04Checkmate:What's the price that Bitcoin's at$2 trillion right now? It's roughly like 50K is a trillion, 100K is 2 trillion, ballpark. So I mean, 100K will be a big buy zone for a couple of reasons. One for being just a nice round number but also that 2 trillion market cap um 55k seems extreme although one of the things that i truly believe in is that the funniest outcome is always the most likely and i think honestly the fact that this all happened on the day that core v30 released is proof that that's the case oh it's great yeah core tank the market and and they ended everything from from equities to yeah to bitcoin the whole lot and so maybe that makes me think we just 58k is the bottom them is 58k forever the other argument yeah look the other argument is that um core managed to nuke altcoins to zero so you know we've got to give them props for that like there you go um okay and then if if we take the bullish scenario here that this is ends up being you know just a short-term event v-shape type recovery and everything's kind of good how much do you think this slows down the you know price narrative and and do you think we then just hover around this kind of level for a long time before we go up to 150 or whatever we go to?

59:18No, look, my general view here is that we either have, I think the market wants to go somewhere. I think it's time to move. We've spent enough time up here, the market's ready to move. I think we either go into a bear market or welcome to euphoria. It's going to be one of the two. So that's why I think it's actually quite an exciting time, especially for me as an analyst, trying to just see how the investor response evolves over the coming week. This to me is, we're going in one direction or the other. I don't I think we just go sideways for six months. I think the market's ready to move.

59:47Checkmate:Interesting. So this is the time to pay attention. Totally, totally. And for me, this is just like a big puzzle. I just love trying to work out like what? I'm not trying to predict the future. I'm just trying to like get a read on how Bitcoiners are behaving, how that Bitcoin behavior pattern changes now that we have an institutional audience. Again, Bitcoin is taking two and a half billion of spot sell side a day at the same time that we have this deleveraging going on and 25 % of open interest clears. If you put that 2.5 billion of sell slide, the altcoins go to zero, let alone the deleveraging.

1:00:19So the divergence, all right, I think that's really, if you can take one thing away from this whole event, the divergence between crypto and Bitcoin, it just opened a whole different chasm because everybody, everybody has just seen that there is no second best in terms of liquidity profile. You just can't own the stuff that goes to literal zero on a weekend because of a Trump tweet. You just can't. Bitcoin down 12%. How many times have we seen this? Kind of another day in the office, noting all the, can deteriorate from here, of course.

1:00:51Checkmate:I think I still lean bullish. I don't think Trump... Trump definitely doesn't want to see the markets crash. I think he's going to be very aware of what's happened. I think he maybe will course correct a bit. Art of the deal, things will end up panning out a little differently to that initial tweet. I think we're likely going to have another couple of rate cuts, at least through the end of the year. I don't know. Gold saying everything wants to go higher. JP Morgan are talking about a debasement trade. It seems like there's too much lining up for this to turn into a bear market right now. Gold tells us where we're going.

1:01:21Bitcoin tells us the road to get there. If we do go into a bear market now, is that the four-year cycle thesis playing out?

1:01:27Checkmate:And we were all wrong talking about this being over. My base case for a long time, I think since like 2023, has been, I don't think that the four-year cycle breaks on the upside. I think it breaks on the downside. So look, we may have some kind of a, if we top out here, yeah, four year cycle. But I think what actually breaks people's head, let's just imagine, right? We go down the 30%, 40 % from the all-time high. Are people going to reset their cycle chart being down 40 % or are they going to wait for the 60 % or the 70 %? Right? We went 90, then we went minus 85, then we went minus 75. People are going to be waiting for the 65 and they get a 35 or 40.

1:02:08Are they going to reset all their cyclical analysis? Maybe, maybe not, right? I think that the bearishness is going to kick in and people aren't going to know where to reset the chart. Was that part of a super cycle? Is the bull still going, right? We've had two 32 % drawdowns in the past. If this is a 32 % drawdown, was it a bear market? And if so, was 2024 a bear as well? What about 2025? Maybe that was a bear market. Like, I just think people lose sight of what's really going on. And that's part of the fun.

1:02:34Checkmate:Oh, so that's interesting. So you think the fact that the bear market won't be as brutal as previous ones is what actually breaks the four-year cycle? I think so. And like, you know, chop solidation has a lot, like the 2024 and the 2025, I said this at the Sydney Bitcoin meetup as well. The thing that's interesting about chop solidation in my view is that it builds floors, not ceilings. Like go back to some of those charts we just looked at, 62 % of all the dollars invested in Bitcoin have a cost basis above 95K. That's a big number. That's a big number. like to hold two competing thoughts. Bitcoin belongs above 95k.

1:03:09The market has said it belongs above there. If we go below there, watch out. You know, they're the two competing ideas you've got to hold.

1:03:17Checkmate:Cautiously bullish. All right. Checkmate. Thank you, man. We only did a show a couple of weeks ago, but when this all happened, I was like, I've got to do a show and it's got to be with you. So I'm glad we could do this sort of last minute. I'm going to try and get this one out as quick as possible because otherwise we're going to look like fools when the market tells us everything we said was wrong. But I appreciate you, man. Thank you for doing this. Good on you, folks. And again, if you've taken a gut punch over the course of this thing, it gets better, right? It's all right. But always learn your lesson.

1:03:46I think everybody listening to this has blown up an account here or there. It sucks losing money. We've all done it, but it is part of the journey. And the quicker that you can learn the lesson and then right the ship. And leverage is a painful beast. And I think it's very, very clear that a lot of people people would have had like 2x leverage on. If the price goes to zero, it doesn't matter what your leverage ratio is, it goes to zero. Very clear that Bitcoin is just in a different league to everything else because down 12 % is very different to being down 100.

1:04:17Checkmate:Totally. And just for your sanity, I've deposited lots of money to BitMEX that's never come out. I've done the shitcoin casino. I don't think I've ever withdrawn from BitMEX. no absolutely not um and when these things happen just the the peace that you have knowing that everything's just in cold storage and it's you're not going to sell anyway so it's just entertainment at that point um it's it's a different frame of mind it's the right place to be i have a very very similar feeling to what i had when ftx blew up just thinking okay well i didn't actually lose anything which is again very comforting yeah and the number go down but viewers go up when this sort of chaos happens so it's all hopefully it's not the all-time high like it was in my video back in december hopefully not checkmate you're a legend thank you for doing this such short notice mate um you should tell everyone about the newsletter i saw it come in on friday that was the the signal that things weren't necessarily as bad as people thought but but give it give them a shill yeah so um you'll find us over at checkonchain.com we've got a newsletter and a charting size all the charts we looked at today they're all available for free so you can check them out and poke around with those um basically we do two posts a week just trying to help people understand this stuff.

1:05:23Again, I can't predict the future. No one can. I just like to try and help people think about these scenarios ahead of time and try and give an evidence-based database view, at least from my perspective. We do two posts a week, written and video. And yeah, as the market was selling off, I got up early on Saturday morning and ripped a quick video just to help people visualize what is going on. And that's what I think is so cool about Bitcoin in general, but just like the amount of data that we have to watch the futures markets, to watch the options markets, to watch the on-chain space. Like you can visualize where people, where their sentiment is.

1:05:58You can see where their cost basis is. You can see where their leverage profiles are. And then you just kind of map out and say, well, if we go below this and you're going to hit this guy's liquidation, which is going to put all these guys underwater, probably a sensitive line in the sand. I can make my decisions accordingly based on that. So that's really how I just try to frame things and just help people navigate the volatility because we're all hodlers. And when Bitcoin does this stuff, and I get this feedback all the time, most hodlers do not care the price goes up or down. They just want to know why because they're fascinated by it.

1:06:27And I'm much the same. That's why I do it.

1:06:30Checkmate:Yeah. Go and subscribe. It's one of the best newsletters out there, if not the best. You're kind of like one of the only analysts that's still made it. There's not many of you around anymore. No. And the truth is I don't post as much on Twitter anymore because I just prefer doing the long form and actually writing and putting the thought into it. And I just find Twitter is just too noisy. Like you, I don't particularly want to talk about treasury companies, but that's just kind of the narrative at the moment. Knots and Core and treasury companies, I'm just going to write about the stuff that I find interesting.

1:07:01Checkmate:Actually, saying I don't want to talk about treasury companies, before we close out, can I ask you a really quick question on that? Because we've talked a lot about whether that business model is kind of dead at this point. Do you think something like this could really crush it? Oh, totally. I mean, I think it was dead. I mean, look, shit coins just went down 80%. Most treasury companies have been down 80 % for weeks, months. So again, I've been saying this for a long time. I don't understand how a treasury company that is too small to tap debt markets, too small to tap preferreds, hasn't reached the scale necessary.

1:07:37I don't know how they re-expand their MNAV. I would love to see it happen because then I can learn from it. But my thesis is, if your primary means of accumulating Bitcoin is selling your stock to buy Bitcoin at a premium, then your stock no longer has a premium. Why would someone invest in it? And then you kind of look at it from another perspective. If the argument is that they get acquired by a bigger treasury company, well, guys, no one acquires a company that's not distressed. so you're going to get bored out and actually it reminds me of uh i worked on a mine site in the uk and uh the mine a lot of people like you go on like the forum of retail traders they were paying 40 pence per share and the mine by the way went ahead but the company that they were buying shares in went bankrupt a big american miner came in and bought them at 50p on the dollar all those investors got bored out at a shitty price and then the mine goes ahead anyway so like the thesis was correct, but you get wrecked by market structure.

1:08:36So I think that's going to happen. So if you're going for this M &A proposition, well, you're not going to get bought out at a good price. You're going to get bought out at the worst price. A lot of these treasury companies, I made fun of them calling them penny stocks with a cold card. A lot of them are now literally penny stocks. They're trading below a dollar. They're going to have to do reverse stock splits just to stay listed. This is a really tough proposition. So I get it. I think the business model by the meta planets and the strategies, there's a case to be made for some of these things.

1:09:05I don't know if there's a case to be made for thousands of them, hundreds of them, even 10 of them. I think there's a handful of these things. And for strategy, for example, if Bitcoin goes on a proper run, you got 640 ,000 Bitcoin worth of beach ball that's going to inflate. At a minimum, the stock's going to chase the Bitcoin price. At a minimum, it's just too big. If you've got a thousand Bitcoin and Bitcoin goes to a million dollars, Well done, you're a billion dollar company. What are you going to do with a billion dollars in today's world? Like it's just irrelevant. So size matters a lot and growth matters a lot.

1:09:40And there's only a handful that are of a size and growth potential that they can do anything about it. So I just think that the Pareto distribution, like shit coins, like shit coins, will not die. But a lot of them just did. And I would say treasury companies, not all treasury companies will die. But I think a lot of them are zombies walking. Hmm.

1:10:01Checkmate:It is probably the most interesting time in the markets since FTX really right now. I think it's going to be a really crazy few weeks. We'll see how this plays out. But thank you, Checkmate. It's been awesome. Welcome to 2025. It's all very on brand. Perfect. I will speak to you very soon, mate. I always appreciate it. Thanks, mate.

1:10:34Thank you.