Bitcoin’s Strongest Bullish Setup Yet… But Why a Crash Could Still Come w/ Michael Nadeau

Added: 2026-05-05

[00:00:00]I do want to ask about this range because you you've pointed this out for a while and I think most people who've been paying attention have noticed it for I think around 70 days, over 2 months anyway, Bitcoin has been bouncing between this 62-65k, 76k level and we seem to be near the top of that range right now. It seems like the bulls are thinking we're going to break to the upside. So let's start with the bull side of this case and this you know this battle you've described between the bulls and the bears. Let's start with the bull case. What do you think the bulls have going for them to say that we're going to break out of this range and move higher here? Give me your view on that.

[00:00:29]>> Yeah, so you know and I guess we should have maybe we can can we assume for this discussion that the bull view is that we've already bottomed and that we're sort of moving into a new a new market structure. If if we assume that's the case, I think there is there's some arguments to be made for this and and a few of them would be you know everyone's focused on the war right now and what's interesting to me is that Bitcoin actually bottomed before the war started. So we came down to you know 62k or so very early in February and the war didn't start till you know late in February and Bitcoin's been been in a range moving upward through this whole time even even rising through a lot of volatility and through a lot of you know volatility in the traditional markets during that period. So I think if you are bullish, you could say well the market has already looked through that. Right?

[00:01:18]Oil prices are went up to 115 or so.

[00:01:21]We've we've come off a little bit. The market is processing this. We can look through you know geopolitical conflicts and you know that that that looks that looks clean. I think that has to be your view if you're you're you think we bottomed. The other thing is when we had the second correction that took us down to the low 60s, we did come into what I would call you know fair value territory for Bitcoin.

[00:01:44]We we were calling for 65k or so back in October. We we came into that zone and some of these KPIs that we track to really kind of understand where we're at in the cycle. Some of those were hit. At least the sort of upper range of those were hit. So I think that's another sort of check mark if you want to say you know we we're potentially going into another expansion here. We've seen you know if you if you follow the fear and greed index, that has you know been quite depleted over the last few months and you know you could sort of look at that and say well we can only go up from from here. Right? We've been in a very sort of an extreme fear zone for a while. We know that you know crypto VCs are sort of in reset mode right now and that's typically what you would what you would see in a in a bear market. To the extent that VCs can start raising capital, start pushing that capital back into the markets, you know maybe that's the the beginning of the of the next cycle.

[00:02:36]And then something that's you know I know a lot of people are pointing at right now that's different this cycle that I do think warrants paying attention to is what MicroStrategy has been doing and their ability to raise capital for the first time in a bear market. We haven't seen this we didn't see this in the last bear market. MicroStrategy was really not buying at the lows.

[00:02:59]That has changed you know quite significantly in this cycle through this new STR C product that they have. And to my account they've already made 7.6 billion dollars of Bitcoin purchases in 2026. So that's that's something to pay attention to and you know if you fold that into your framework, you could say well it's it's reasonable to say that maybe we won't go to these sort of deeper levels that we've seen in past bear markets. The other thing that I think is a positive very positive sign is the performance of the ETFs. So again this is a new thing this cycle. We first bear market with ETFs and the AUM you know in Bitcoin is only down about 5% currently from the highs and we know those have been some of the most successful ETF products that have ever come into the market. So that's another you know positive sign that there seems to be you know maybe we're not seeing like a a massive inflows right now but we're not seeing these investors that came in over the last year you know capitulating and trying to exit those positions. So I think that's a that's a positive sign.

[00:04:02]And then I think on the other side of this if you sort of look at the traditional markets, you know if you look at like analyst analyst projections of forward looking growth, that's like very very positive right now. So analysts are projecting 19.2% earnings growth in Q2 in this current quarter and 21% in Q3. So the analysts are looking at you know the largest companies in the US and saying these these businesses are healthy and they're re-rating earnings at the same time. You know we saw PE ratios drop. You know they've sort of rebounded back a little bit since we've we've had like I don't know seven or eight up days in a row now. So PEG ratios had sort of come down where the PE ratio had dropped but growth is rising. That looks like a buying opportunity kind of on the traditional market side.

[00:04:49]And then the AI story doesn't seem to be losing any steam. There seems to be really strong demand for for compute. So those are all like positive signs I just think in the and generally in the economy and I think that's if I was going to like anchor to a bull thesis, I think that would probably be the the main themes that I would be looking at.

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[00:06:22]I like that comprehensive answer. I think you covered like five or six different things in there.

[00:06:26]But I do want to kind of key on one thing you mentioned before we move on to the bull the bear side here which is like the the ETPs the ETF products. Both BlackRock and Golden Sachs have come to market with new Bitcoin income ETFs which I believe are are using a covered call strategy to sort of strip out some volatility, pass on the the income to the buyers of those products. It seems like an attempt to sort of mimic a little bit of what MicroStrategy is doing with their their stretch product.

[00:06:52]So it seems like these have found product market fit. Morgan Stanley obviously went to market with their spot spot Bitcoin products as well. Recently had their most successful ETF launches ever. Talk to me about how this changes your thinking for the overall market structure here. Is this already priced in this new capital, this new institutional bull run or do you think this changes how we're going to see market cycles play out from here?

[00:07:13]I I think it's interesting to watch and I'm looking to see if there's if there's still going to be demand from this from you know kind of institutional investors at kind of this stage of of what I think is kind of very late stage across business cycle, liquidity cycle, asset allocation cycle. So I think I think it's interesting that these products are being rolled out right now and we'll definitely be monitoring them. In terms of like MicroStrategy itself, maybe just to to to to hone in on that one a little bit.

[00:07:40]I think the perception in the market is that these buyers these institutional buyers are essentially just going to mop up if there is volatility in the markets.

[00:07:49]They're just going to be there to catch catch all of that and mop all all of that up. I'm not sure if that's the right way to really think about this.

[00:07:56]You know MicroStrategy has been buying a lot of Bitcoin right now. When they're doing that, they're not necessarily like you know catching the the capitulations in the market and moving the market price. They're kind of quietly in the background just just sort of accumulating their Bitcoin. So I'm not sure if it's like really going to impact market structure if we do see more volatility and potentially another another move down.

[00:08:18]But for me it's like it's a very positive sign as somebody who's a long-term bull you know in this space and is projecting Bitcoin to go to a you know a million dollars at some point.

[00:08:27]These are all like really awesome you know signs for me.

[00:08:31]Got you. Okay. So it's a long-term bullish indicator but you're not so sure about whether or not it it matters so much in the short term here. We'll have to see. Makes a lot of sense. Okay.

[00:08:39]Let's let's go to the bear side here because I think you've been let's say eloquent about making that case. What is the the bearish case that we might continue lower here and you know it seems like we're 75 we're around 75k right now. That's around 15k off of the the low. It seems like a big move to go down to make newer lows here. What do you see being the thesis for that happening?

[00:08:59]>> I think the thesis for this happening is is a few things. So I mentioned that like there's a lot of sort of cycle awareness KPI indicators that we look at. These are you know really long-term things like realized price which proxy for all of the you know coins proxy for a cost basis of all the coins circulating on the network. Things [snorts] like 200 week moving average, things like the percentage of the network that's in profit. Some of these like really important indicators that we look for to be hit in bear markets. A lot of them have not been hit. So that would be sort of an anomaly to me to have a sort of bear market and I sort of a capitulation that we saw back in February that we bounced out of pretty quickly. I mean we went down to you know 62k or so and it reflexively went right back up to about 70k. So there was really not that much of an opportunity to buy in that zone in that sort of fair value zone for for investors and then what we're seeing is like people start to chase that, right? And And the same thing happened after the first capitulation down to 84, we didn't go lower. Like we kind of just grinded up from there, and so And for a long enough period of time where people start to flip bullish, maybe they were bearish, now they're trying to chase the market.

[00:10:11]So, I think that that is in play right now where, you know, typically when you get to like the macro low of a of a bear market, you're going to have a capitulation, and you're not going to have a reflexive move straight back back up. You're going to stay there, and it's going to get quiet, and sort of everyone's going to have to come around to, you know, the that that this is a crypto winter. I don't think that has played out just yet in this cycle, and so that would be, you know, an anomaly for me to for for the for this to be the case, and like basically the bottom is in. The other thing that we look at pretty closely is uh market structure in terms of cost basis of different wallet cohorts on the Bitcoin network. So, I want to understand, you know, how many people came into the market at like the highest prices of the last cycle, and and then I want to understand at various points of the bear market, how much of that has actually turned over and been sold back into, you know, maybe more stronger hands. And that's a process that typically takes about a year or so to play out, and when I look at that data, it doesn't tell me that we've sort of kind of like turned over the the market structure just yet. So, that would Again, that would be another sort of anomaly that I would be looking at. And then, you know, I was bearish. I I believed we were going into a crypto winter regardless of this this geopolitical conflict, which which did happen, and I think that's kind of mostly a distraction uh in particularly in the crypto markets right now. Um I don't think it's having that much of an impact on the crypto markets, and you know, if you look at global liquidity, and and there's different ways to to look at that, but to me global liquidity cycle has already peaked, and we're now, you know, turning over. There's different ways to measure this. We also look at, you know, the fiscal impulse uh as Bitcoin has been correlated not just with global liquidity, but actually fiscal policy in the US. Um the fiscal impulse has been rolling over as well. Um and so, if you just think about kind of where we're at, I think we're late We were already late stage, and so the the story of the war is not really impacting my framework so much. Um and I just think there's there's a there's a an element of time to this that that just hasn't quite played out just yet. And so, that's kind of the uh maybe the more bearish case where you could look at some of these things and say, "Well, the probability probably still points to for further weakness, and the more that we sort of have these choppy periods where prices grinding up, the more and more people are sort of that maybe were bearish are capitulating that, and then sort of chasing the market. And we'll see. I mean, this can go on for a little while. Um and there's some probably some interesting price levels that we're going to hit here pretty soon that will give us more of an indication of whether this is like a really durable durable move.

[00:13:04]Uh this is the other question I wanted to ask before we unpack some of the pieces of this this bearish thesis you've laid out here, but we've been in this range for a really long time. Do you think that there like how long can we stay in this range before the market is kind of forced to pick a direction higher or lower? Because 70 days going sideways is a really long time. Like do you have any thoughts around that of like when the decision on this battle is going to get made between the bulls and the bears? Want insights on what's moving crypto markets and how we're [music] trading each event? Subscribe to our channel and join the Milk Road daily and pro newsletters, and start investing like the top 1%. [music] This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.