This Math Reveals Why Bitcoin Shorts Are About to Explode!

Hinzugefügt: 2026-04-29

[00:00:00]If we get to 5% of the network, Bitcoin is going to be a million a coin.

[00:00:03]>> The supply shock is really inevitable.

[00:00:05]>> There's not enough supply to eat up a billion a week for Micros.

[00:00:08]>> The general sentiment will flip from being short to being long and we'll have a face ripping rally.

[00:00:14]>> The biggest buyer in history just absorbed another4 billion of Bitcoin and the price barely moved. The bears are piled into the most negative funding rates in Bitcoin's history. The cycle bros are calling for one more leg down and almost no one is talking about the math hiding in plain sight. a single curve that fits every one of Michael Sailor's Bitcoin purchases. A curve that says the supply shock everyone keeps waiting for hasn't even started yet. My goal today is to walk you through that math, show you the short squeeze quietly building underneath the price, and explain why the next 18 months may break every Bitcoin cycle assumption you've held for the last decade. This is Truth Block. I'm Hurley. Let's mine truth.

[00:00:59]Bitcoin started the week with a small dip down to about $76,000. About 6 months ago, we were at the all-time high of about $126,000. So, we're currently 39% off the highs. Sentiment is a mixture of boredom and exhaustion. The chart looks like a textbook 4-year cycle drawd down right on schedule. Earlier this morning, Sailor announced another buy, 3,273 Bitcoin, roughly $255 million worth.

[00:01:23]That brings Strategy's total to 818,334 coins. Along with last week's monstrous purchase, Strategy now holds more Bitcoin than Black Rockck's spot ETF, IBIT. That's a single corporation with more Bitcoin than the biggest spot ETF on Wall Street. Meanwhile, on the other side of the trade, the bears are absolutely stacked. Negative funding rates on Binance just hit a three-standard deviation extreme, the most negative print in Bitcoin's history. We've been below the line for 46 days straight. Now, we'll get into what all this means a little bit later, but for now, I just want you to hold this picture in your head. The largest buyer in history just continues to buy.

[00:01:59]The most leveraged short positioning in history is fighting it, and the price is doing nothing. That's the contradiction we're walking through today. And the only way to make sense of it is to stop staring at the price chart and start looking at the math underneath it. While everyone else has been staring at the price, Sailor has been laying out his own math. This clip is from his sitdown with David Gstein in December. It's four months old, but the math hasn't changed.

[00:02:22]Watch how clearly he frames the ceiling.

[00:02:25]>> What I've said is is if we get to five% of the network, Bitcoin is going to be a million a coin. If I get to 7 and a half% of the network, it'll be 10 million a coin. So, think of it as I'm buying something getting exponentially more expensive using exponentially more money. And where where do we top out?

[00:02:43]You know, I I think we top out between five and seven and a half percent and then we just exponentially slow down, right? And the rest of the network is right now it's, you know, a after a hundred billion dollars of money from Black Rockck and 50 billion from us, 85% of the Bitcoin is held by the OGs.

[00:03:04]>> Exactly.

[00:03:04]>> After the next trillion dollars from the big institutions, maybe it'll be 75% will be held by the OGs. So, it's think of us as powering the network up and we're pushing against an exponentially hardening asset. And that's the way it should be. Look, 95% of the Bitcoin's been mined. By the year 2035, 99% that last 1% of Bitcoin comes out between the year 2035 and the year 2140.

[00:03:34]It's a hundred years to get the last 1%.

[00:03:38]And so we we look at it like that and we will just be like the little engine that could we will keep you know turning the crank powering the network you know driving up the network value for everybody and uh and you know I think that you can do that at least for the next hundred years. I don't know what happens after a hundred years. I haven't worked that out yet. that the AI version of me will be talk will be giving interviews in a hundred years about what we're doing next, but that won't be me.

[00:04:10]>> So, Sailor gave us his own model in plain language. He says that when strategy gets to 5% of the network, that gets us to a million dollars per coin.

[00:04:17]7.5% gets us to 10 million. Then his accumulation slows down. He calls it exponentially hardening, meaning the more you buy, the more expensive every additional coin gets. Now, that's not a price prediction. That's a description of what happens when a price insensitive buyer pushes against an asset with a fixed supply. And here's the part that gets me. Strategy now holds 3.9% of all the Bitcoin. By sellers's own model, he just needs 5% to trigger the million dollar per coin. So either he overestimated the price impact of his buys and he can therefore buy more or we'll soon see a very sudden repricing like Bitcoin loves to do. Regardless, he's giving us the shape of the curve.

[00:04:54]And it turns out that shape can actually be drawn. A Bitcoin analyst on X who goes by the name of Plan C did something interesting. He took every one of Strategy's Bitcoin purchases and tried to fit them to a curve, specifically an S-curve. And the fit is shockingly clean. The curve nails almost every one of Sailor's buys. The ceiling sits at about 2.1 million Bitcoin, roughly 10% of all the Bitcoin that will ever exist.

[00:05:18]The inflection point, the steepest part of the curve where accumulation moves fastest, hits in early 2027. And along the way, strategy crosses 1 million Bitcoin sometime around Thanksgiving of this year. 5 years out, the curve has them just under 2 million coins. So, the fastest accumulation phase is right now through 2028. Now, keep in mind, this isn't a forecast. It's a description of what's already happening. The curve isn't imagining the future. It's tracing 107 buys that already occurred. The future projection just falls out of the math. Now, plan C's 10% ceiling is slightly more aggressive than sailor's own 5 to 7.5%. So this is the bullish version. But the shape itself, the Scurve comes straight from the data. The shape is what matters. This is the sailor curve. And the math gets reinforced when you listen to who else is saying it. Here's Samson Mau on Pete Rizzo's podcast. Watch what he does to the idea that exchanges have plenty of Bitcoin to sell. He is kind of setting the floor for everything. So his average cost is 7 $75,577 per BTC. And with this recent downturn in the market, he's been able to average down, which is really insane when you think about it. The the biggest holder, the biggest single holder entity of Bitcoin is able to average down. And I think even other treasury companies like Metaplanet are averaging down. So you kind of have to think that this is an anomaly. It's these are buyers of last resort. They will always buy Bitcoin.

[00:06:50]They're price insensitive. they will always buy even if it's 500,000 a coin or 700,000 a coin but people right now are willing to sell them Bitcoin for $60,000 $70,000 which lets them average down and I just don't think it's sustainable and you couple that with like uh BSTR from Adam back they are probably going to dispack in the next month or so and they have $ 1.5 billion of capital to deploy and then they're going to be running similar strategies as strategy to accumulate. So if you look at the landscape, there is just not a lot of room to wiggle. If you think back to let's say 6 months ago, it doesn't seem to happen now, but every time Sailor would announce a buy, we'll see a dip, right? And recent days, I think it's because of sustained buy pressure from STRC sales, but we don't see that dip anymore. announces we bought and we're still steady at the 74,000 something mark. But um if you think about it, you know, even if there is the sailor dip after he announces and we go down a bit, then maybe BSTR will buy that day too and then the next day it's MetaPlanet and there's only so many days in the week and there will be more Bitcoin treasury companies popping up too. So, I just think the supply shock is really inevitable and the the amount of Bitcoin available is actually lower than most people think. People think there's, you know, 2, 3 million coins on exchanges ready for sale, but those are not coins that are meant for sale. That is liquidity. That's market makers and trading firms and hedge funds using that Bitcoin on exchange to perform other activities. And it is not meant to be just sold and never bought back.

[00:08:43]>> Two things worth double clicking on.

[00:08:45]Buyers of last resort, price insensitive. That's the operative phrase. Sailor will buy at $70,000.

[00:08:52]He'll buy at $700,000.

[00:08:54]The price doesn't change his behavior.

[00:08:56]And the other treasury companies are running the same playbook. Second, the 2 or 3 million coins sitting on exchanges aren't actually for sale. That's working capital for trading firms and hedge funds. The real liquid float is a fraction of that and it's shrinking every quarter. Strategy alone is buying multiples of mine supply every week. The ETFs are doing the same. The buyers are absorbing more Bitcoin than is being created. That math just doesn't hold forever. Now, the engine funding all these sailor buys is a preferred stock product called STRC. I did a deep dive on that one last week, so check out that video if you haven't already. For today, just know it's real. It's growing fast and it's converting capital that was sitting in fiat into Bitcoin demand at a rate that didn't exist in any prior cycle. Now listen to what Mike Novagrat says about what's actually driving Bitcoin right now. No, you know, Bitcoin is interesting. Uh US retail has come back period and the story and you see it through uh the ET ETSs, but most you see it through micro strategy. Sailor, the wizard of micro strategy, Michael Sailor is back and he is selling stock and he is selling perpetuals and he is buying Bitcoin and his premium is expanding not contracting. What it means by now you're 130 times NAV. His MNAV is 130 relative to the Bitcoin he owns. And so he can sell micro strategy and make money, you know, create yield as he says for his investors. He dilutes his new investors, current investors. Uh and and it dilutes his new investors and and and it it it's a creative to new investor to old investors. Uh, and so it's a a strategy that he has almost uh he's almost the only guy that actually has this strategy built in. You know, he had all these other dats that tried it. They all trade at discounts.

[00:10:58]Uh but but Michael has managed to create this cult uh of people that trust him and and that buy Micro Strategy as their Bitcoin proxy. uh they buy it as micro strategy and it's working and that is I mean he bought two and a half billion dollars of Bitcoin last there's not enough supply to eat up a billion a month from m a billion a week for micro stellar the bears can argue about timing but the math is settled so back to the bears for a second when you trade Bitcoin with leverage you're not trading actual Bitcoin you're trading a contract called a perpetual future to keep that contract tracking spot exchanges run a small payment between longs and shorts every eight hours if there's more longs than shorts then longs pay shorts. If there's more shorts than longs, then shorts pay longs. Right now, shorts are paying longs at the most negative rate in Bitcoin's entire history. And we've been negative for 46 days straight. So many bears are piling in that they're bleeding about 5% annualized just to hold the position open. This is people paying interest to bet against Bitcoin while Sailor is buying multiples of mine supply every week. So why would one do this? Presumably because they believe the four-year cycle script. They think another leg lower is coming on schedule.

[00:12:10]The leverage is cheap. The conviction's high. The cycle's paid off four times in a row. So, they pile in and every day they bleed. Jeff Park posted the funding rates chart yesterday and said, quote, "I would not want to be short Bitcoin here." I agree. I wouldn't either. This is the cleanest setup for a short squeeze we've had all cycle. The biggest buyer in history absorbing supply daily.

[00:12:32]Shorts paying record premiums on the other side. a derivatives market five times the size of spot. When sentiment flips, the move is going to be violent.

[00:12:41]Which brings us to sailor's read on the same dynamic.

[00:12:44]>> I think that the price action is choppy and sideways and and you know, when you talk to people, they say the market's really being driven in the near term by the derivatives traders and you know, the derivatives market, the perpetuals is 5x bigger than the spot market. And so if a guy wants to put a billion dollars up and go 50x levered short or 50x levered long, then that trader controls the price for the day because it's a lot of leverage and you know it's a global market and 80 you know people talk they they like to talk about the corporations but at the end of the day 85% of the Bitcoin is held by not corporations.

[00:13:22]Nobody knows who owns it. And those crypto native OGs, they're using the crypto exchanges and crypto derivatives to get liquidity. And so you got $1.7 trillion dollar worth of people with capital that could leverage it 10 or 20 to one. And they decide what they're going to do, you know, above my pay grade. I think at some point, you know, the the general sentiment will flip from being short to being long and we'll have a face ripping rally north. I just can't tell you when.

[00:13:52]>> Sailor says it as cleanly as anyone can.

[00:13:54]The derivatives market is five times the size of spot. One whale with a billion dollars and 50x leverage runs the price for the day. That's the market we're in.

[00:14:03]And right now, it's full of shorts, paying record premiums to short an asset whose biggest buyer just won't stop buying. Nobody can tell us when sentiment flips, but Sailor keeps buying through it. And when those shorts get squeezed and the supply isn't there to give them an exit, that's the face ripping rally he's describing. and he's describing it because he's the one quietly engineering the floor underneath it. Now, let's talk about the four-year cycle dogma. For 15 years, the having cycle has run Bitcoin. Having compresses supply, narrative builds, retail piles in, euphoric blowoff top occurs, and then an 80% draw down. Repeat. Honestly, I thought the cycle was already broken 6 months ago. Clearly, I was wrong about the timing. Price dumped right on the calendar everyone was watching, and many people got caught flat-footed. So, why did the dump come right on schedule? Was that the cycle working or was that everyone front running a move that no longer has structural force behind it?

[00:14:53]Because if it was self-fulfilling, that's not the cycle. That's just human expectations clearing themselves out.

[00:14:58]And the Havingings actual supply impact today is essentially nothing. Bitcoin mines about 450 coins a day. Sailor bought 3,273 just last week. Whatever is left of the 4-year cycle is psychological, not structural. And it's fighting a market that's been different from day one. I mean, just look at the receipts. This was the first cycle to hit an all-time high before the having.

[00:15:18]The first with spot ETFs absorbing retail demand on the way up and the first with a public corporation passing the largest spot ETF in Bitcoin held.

[00:15:25]The bears are running 2017 plays against a 2026 market. And I get it. The pull to treat it like every cycle before it is real. We've been trained for it. Every cycle ended with a cliff. So, we wait.

[00:15:37]We sit on cash. We tell ourselves we'll buy lower. But this time, the supply isn't there. The shorts are at historic extremes. And when that breaks, you don't get time to reposition. I argue the 4-year cycle isn't gone, but it's being absorbed by something much bigger.

[00:15:52]I think the sailor curve is the new cycle. And here's the kicker. As sailor's accumulation curve approaches its ceiling, the price has to do something violent. Just run the math.

[00:16:01]Strategy is at 3.9% of all Bitcoin.

[00:16:04]Sailor says 5% triggers a million dollars or coin. 7.5% triggers 10 million. He's already 80% of the way to the first number. So, either Sailor wildly overestimated his own price impact and he can keep buying without the price responding, or Bitcoin's going to do what Bitcoin loves to do, sit quietly, bore you to death, and then suddenly and violently repric. Because the curve is constrained, Sailor cannot keep buying at $76,000 forever.

[00:16:30]Eventually, the price has to move up and clear the supply. So, either it grinds higher into the buyer or it gaps higher when the leverage breaks and the float disappears. That's the dynamic plan C's chart is showing us without saying it.

[00:16:42]Sailor's accumulation S-curve is determining the price. As the top of his curve approaches, the steep part of the price curve has to follow. The two curves stack, his accumulation peaks and the price S curves up. That is the new cycle. And this only works with Bitcoin.

[00:16:58]No other asset has a fixed supply. Draw this curve against the dollar, they print more. Gold, they mine more.

[00:17:04]Stocks, they issue more shares. Bitcoin is the first asset in history where demand meets a truly fixed supply and the result is a clean, predictable curve. It's not magic. It's physics. And that's what Sailor means when he says Bitcoin is exponentially hardening. So, put it all together. The Sailor curve is in the steepest part of its accumulation phase. Strategy is absorbing supply daily. Shorts are at historic extremes.

[00:17:28]A derivatives market five times the size of spot. A supply shock everyone's been waiting for hasn't even started yet.

[00:17:34]It's been delayed by leverage and leverage is finite. But now I want to hear from you. Do you think the 4-year cycle is dead, dying, or still running this market? Where does Sailor actually top out? 5%, 7.5%, 10%. If Bitcoin finishes 2026 in the green, does that settle the cycle debate or do the cycle bros get one more shot? Leave your thoughts in the comments below. And if this episode helps see what's happening underneath the price, hit like, share it with somebody who's still waiting for that next leg lower, and don't forget to subscribe to the Simply Bitcoin channel so you don't miss the next one. Thanks for watching, and we'll see you Thursday.