Don't forget to cast your vote 👇 |
Poll of the day: What do you trust more? | |
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This one wasn't on the bingo card. |
A few months ago, the Bitcoin bear case sounded reasonable:
Maybe we get a normal pullback. Maybe some chop. Nothing dramatic. |
Well… here we are. |
Bitcoin isn't crashing in one violent move.
It's doing something more unsettling: slowly losing its footing. |
That's usually how trouble starts — with a quiet slide that makes everyone uncomfortable.
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The Spark That Started The Chain |
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Back in November, Michael Purves flagged something most people brushed off: a monthly MACD sell signal.
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MACD is basically a speedometer for the market. It tells you how fast (or slow) it's moving. |
When that speedometer flips to "sell," it means momentum has rolled over. The car is losing steam. |
This only happens on Bitcoin's monthly chart about once in a blue moon — November was just the sixth time ever. |
And historically, when that big-picture momentum turns negative, Bitcoin hasn't had a gentle response. In prior episodes, it eventually fell around 60%. |
Back then, that warning sounded like a tail risk.
Today, it sounds less like a warning.
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1\ The second domino |
If the MACD was the spark, the next issue quietly finished forming. |
Bitcoin just completed a bearish head-and-shoulders pattern. |
If you've never seen one, here's the fast version: |
Around $110K → left shoulder The all-time high → the head A bounce near $98K → right shoulder And a neckline drawn across ~$76,000
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On most charts, that $76K line would be just another number.
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Here, it isn't. |
That level also happens to be Strategy's $MSTR ( ▼ 3.13% ) average cost basis. |
So if Bitcoin loses that level decisively, the conversation changes. |
This stops being a debate about patterns — and becomes a debate about leverage. |
Not because anyone wants to sell but because leverage eventually makes the call for you. |
To their credit, Strategy wasn't blind to this. |
In December, they set aside a $1.44 billion cash reserve to cover interest and dividends — a cushion designed to prevent exactly this kind of forced selling. |
Still: when a key technical level lines up perfectly with a massive corporate cost basis, traders treat it like a fault line. |
2\ Why October still haunts this market
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A lot of what we're seeing today traces back to the October 10 liquidation event. |
Back then, illiquid markets on Binance helped trigger tens of billions of dollars in liquidations in a single day. |
The scars are still visible. |
Crypto market cap: $4.2T → $2.6T $758M in liquidations in the last 24 hours Nearly $7B liquidated over the past week Spot Bitcoin ETFs logged $272M in outflows in one day
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That is called a liquidity crunch. |
When liquidity dries up, prices don't fall cleanly - they slide, gap, and overshoot. |
Bitcoin is hovering just above $75,000, down more than 40% from its October 6 all-time high — its lowest level since the session after Trump's 2024 election win. |
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Alexander Blume, CEO of Two Prime, told Sherwood News that given the spike in volatility and current price levels, "we are likely not far from the bottom." |
Maybe. But "close to the bottom" is not the same as "safe to buy." |
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3\ The macro wrinkle |
This selloff isn't happening in a vacuum. |
Gold and silver just went through their own violent reset — and that spilled over into Bitcoin. |
The strange part? |
Bitcoin didn't really participate in the upside of the metals rally…
but it is absolutely participating in the downside. |
Add to that: |
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Here's how traders are mapping this: |
A\ $70,000 — pure psychology
Just above the prior cycle's $69K high.
Break this, and the tone of the market shifts instantly. |
B\ $55,700–$58,200 — the structural zone
Between realized price and the 200-week moving average.
That's the line between "pullback" and "cycle reset." |
Above that, some traders are watching whether Bitcoin can: |
defend the mid-$70,000s, and reclaim the $78,000–$80,000 zone to repair the chart.
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Enter Michael Burry — and the domino theory |
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 | source: BusinessInsider |
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This is where your story gets interesting. Burry isn't just saying "Bitcoin is going down."
He's describing a self-reinforcing chain reaction. |
His argument, step by step: |
1. Bitcoin falls ~40% from its peak.
2. Corporate treasuries holding BTC feel pressure — because treasury assets must be marked to market.
3. Risk managers start advising companies to sell.
4. Miners get squeezed as prices drop.
5. "Tokenized metal futures" (which aren't backed by physical metal) get forced to liquidate.
6. That selling bleeds into real gold and silver markets.
7. Which feeds back into broader risk markets. |
He calls this a potential "collateral death spiral." |
Burry even estimates that up to $1 billion in precious metals may have been liquidated at the end of the month because of falling crypto prices. |
If Bitcoin were to fall to $50,000, he argues: |
Many miners would go bankrupt, and Tokenized metal futures could "collapse into a black hole with no buyer."
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He's blunt about Bitcoin's role right now: |
It hasn't acted like a debasement hedge like gold. ETFs may have made it more speculative, not less. Its correlation with the S&P 500 is now near 0.50.
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Nearly 200 public companies hold Bitcoin — which sounds bullish, until you realize that "there is nothing permanent about treasury assets." |
That's Burry's core point:
Belief doesn't move corporate balance sheets. Accounting does.
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… is this systemic? |
Here's the counterweight — and it's important you included this. |
Even Burry acknowledges that crypto is probably too small to crash everything. |
Bitcoin's market cap is about $1.5 trillion Household exposure is still limited Past collapses (Terra, FTX) didn't infect traditional markets
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Strategy also says: |
There are no margin calls right now No expectation of forced Bitcoin sales A cash cushion that began in December and has since grown to about $2.25B now covers interest and distributions for more than two years.
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So this isn't 2008 — it's more like a contained but messy unwind. |
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