Don’t forget to cast your vote 👇
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.
The Spark That Started The Chain
Back in November, Michael Purves flagged something most people brushed off: a monthly MACD sell signal.
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.
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
On most charts, that $76K line would be just another number.
Here, it isn’t.
That level also happens to be Strategy’s $MSTR ( ▼ 17.12% ) 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
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
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.
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.”
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:
Citi analysts note that a potential Kevin Warsh Fed nomination (a smaller-balance-sheet guy) could be adding to the angst.
They also highlight $70K as the key “pre-election level” to watch.
SPONSOR BREAK presented by TheOxfordClub*
It wasn't stocks. It wasn't real estate. It was a little-known investment vehicle that turned Mitt Romney's $450,000 into as much as $100 million and Peter Thiel used to turn $2,000 into $5 billion within two decades. Now, thanks to a new executive order, regular Americans can access the same type of investment.
Get more details here >>
The Key Price Zones
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.
SPONSOR SECTION presented by TheOxfordClub*
There is no question, AI is a game-changer.
$4.8 trillion is expected in new money is expected to be added to the global economy within the decade...
And thousands of Americans are claiming their share of this generational wealth-building opportunity by spending ONE hour per week using the power of AI to target what some are calling “Weekly AI Cash Waves”.
One Georgia millionaire recorded a short video showing how he’s been cashing in using the power of AI.
In it you’ll learn how:
This technique is based on research done by Harvard, the Federal Reserve and many other prestigious institutions
Has provided multiple money-doubling returns within as little as a few hours.
Why you don’t need to be a pro to take advantage of the power of AI
Click here to watch this free video and learn how to target these Weekly AI Cash Waves.
Yours in smart speculation,
Ryan Fitzwater, Publisher
Monument Traders Alliance
Disclaimer: This ad is sent on behalf of Monument Traders Alliance. 105 W. Monument Street Baltimore, MD 21201. If you would like to optout from receiving offers from Monument Traders Alliance, please click here.
Enter Michael Burry — and the domino theory
source: BusinessInsider
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.”
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.
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.
So…
… 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
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.
So this isn’t 2008 — it’s more like a contained but messy unwind.
Lesson of the Day
💬 We Want To Hear Your Story:
Got a market or stock you want us to analyze next?
Just drop your request in the comments here.
Enjoying this post?
Was this email forwarded to you? Don’t miss out on future stories — subscribe to the TradingLessons and get our daily market breakdown delivered straight to your inbox.
❗ P.S. - If you no longer want to receive occasional emails from us and you want to unsubscribe, click here 👉 “Unsubscribe” . Thank you!
