This Chart Shows Why Bitcoin Is Falling (And What Comes Next)

Added: 2026-05-19

[00:00:00]Over the past week, the price of Bitcoin has fallen from $81,000 all the way down to $76,000. The bears are saying this is because Bitcoin is about to resume its path lower going down to 50K before 40k and then 30K. Because in their opinion, all of this is just the four-year cycle playing out. But Bitcoin isn't falling because the four-ear cycle or cryptos broken or you know any of those crazy things. Bitcoin is falling right now because a macrochain reaction that has to do with oil spiking last week's CPI and PPI prints yields jumping, the dollar surging, and liquidity tightening. And there's actually a single chart that really ties all of this together and paints a really clear picture of why Bitcoin is falling right now. And it also hints at where Bitcoin is likely to head next. So, in this video, I'm going to be breaking all of that down, talking about is now a time to panic. you know, should you be worried about Bitcoin falling to 50K, 40K, 30K, or is now a buying opportunity or what's going on with Bitcoin in crypto right now? And in general, what you should be keeping an eye on if you want to kind of gauge the risk for yourself. Okay, so to really understand what's going on, you need to understand what the market was expecting would happen and what ended up playing out.

[00:01:07]The market expected lower inflation, Fed rate cuts later in 2026, easier financial conditions, more liquidity, and continued risk-on behavior. What it got instead was Middle East tensions escalated. This whole conflict with Iran, oil exploded higher. Remember, you know, just, I don't even know, four or five months ago, we had this whole thing with Venezuela. Trump crushed it in Venezuela. We got all these barrels of oil. We were going to be, you know, oil barons in the US and oil prices were going to drop. Inflation was going to go off a cliff and everyone was going to ride off into the sunset. And then Trump decided to invade Iran. And then boom, that entire thing flipped on its head and now oil prices are surging.

[00:01:44]Inflation is surging and it's the exact opposite of what the market expected.

[00:01:48]This caused inflation fears to come back. Bond yields surged because of those inflation fears. And then rate cut expectations got absolutely obliterated.

[00:01:56]We went from 2026 pals out. You know, Kevin Worsh is coming in here. He's going to just bring in his rate cutting powers and just absolutely like decimate rates down to zero or, you know, whatever 1% 2% wherever he was going to send it. And and now that entire thing is just, you know, flipped on its head.

[00:02:12]Like nobody knows how Kevin Worsh is like we have the most divided Fed like ever. And Kevin Worsh has to come in there and somehow convince them to cut rates which just seems impossible given the current setup. It's just this whole thing has become a massive massive mess.

[00:02:26]And all this set off a series of chain reactions. First off the the initial trigger was the Iran conflict in the straight of Hormuz. The straight of Hormuz is one of the most important supply chains for oil on the face of the planet. And when this got disrupted, when oil stopped flowing through the straight of Hormuz, oil started skyrocketing. It's like 20% of the world's oil or something like that comes through the straight of Hormuz. And so when this got blocked, um, and Iran didn't even have to do much to block it.

[00:02:53]They just had to like threaten to like blow up some ships. People stopped going through the, you know, straight because they didn't want to die. When that happened, oil prices skyrocketed. People started freaking out. And this kind of set up this whole chain reaction of events that we're now living through. As I mentioned all the time, oil energy that is baked into everything, okay?

[00:03:11]Everything requires. When you drive your car, your your car to work, when things are getting transported across the world, everything uses energy. Your office building uses energy. Literally everything. And so when the price of energy goes up, inflation goes up.

[00:03:25]Inflation is just like how much it costs to do things, how much it costs to buy things. and everything gets more expensive when it costs more to ship it and move it, you know, all of these different things. And this kicked off higher yields when people have inflation fears when they're worried about inflation. Uh, yields surge higher because investors demand higher yields on bonds. And when yields surge, that leads to a stronger dollar. So that causes the DXY to climb and not by a little, it's been climbing every day up the inflation prints landed hot. And you'll notice on May 11th is when the dollar started climbing. They started climbing pretty aggressively. And you'll also notice that coincides almost perfectly with when Bitcoin started dropping in price. So on May 11th right here, you can see from that point on, Bitcoin just starts dropping in price.

[00:04:09]And that's because when dollar strength goes up, it drains liquidity out of the system via second and third order effects. When dollar strength goes down, it flushes the system with liquidity.

[00:04:19]It's really bullish for the markets. You can almost think of dollar strength going up is like a stealth rate hike. uh because in a lot of ways it does and accomplishes exactly the same kind of thing. When you hike rates, the point is to crush inflation and that ends up reducing liquidity. In the same exact way, when dollar strength goes up, it also crushes inflation because uh in dollar terms, imports end up getting cheaper because the dollar is now stronger and it can pay for more things.

[00:04:46]And then uh on the opposite end, this ends up crushing liquidity. And really dollar strength going up right now is a in response to the higher inflation and higher yields. It also happens to be that on May 12th and May 13th is when we got the CPI and PPI prints. So you can see what happened on May 12th. You can see what happened on May 13th and into the 14th. This is really around inflation fears. It really is this chain reaction of you know invading Iran causing oil to spike, inflation fears to rise, causing yields to surge causing the the dollar to go higher. And the dollar going higher tightens liquidity as I said and that causes risk assets especially Bitcoin to end up falling.

[00:05:23]Bitcoin's extremely sensitive to liquidity. So when liquidity falls, Bitcoin tends to fall. Now let's talk about the CPI and PPI prints that came in last week. I said last week that those would be really heavily determined what ended up happening with the markets going forward. And as we saw that that was the case. Both of those prints had a pretty heavy impact on the market. And what I said was it was really important to see how the market reacted to these things. And what we saw with the stock market is actually it brushed off both the CPI and PPI print which were pretty dang horrible. The stock market just kind of brushed it off as if it was nothing. Um there was, you know, a reaction but pretty quickly, you know, any losses were kind of eaten up as the stock market just continued to climb higher. It absorbed that bad news, you know, pretty effortlessly, which is actually a really bullish sign for the market as a whole. But there was still direct impacts on the market because of those hot inflation prints. And those impacts actually had a bigger impact on crypto than they did specifically the stock market because of crypto's relationship or Bitcoin's relationship with liquidity. As I mentioned earlier, Bitcoin is unique in that it sits in this intersection between rates, liquidity, flows, and risk appetite. And all of those things moved against Bitcoin at the exact same time because of these high inflation prints. So really the big issue right now is inflation. It is this conflict in Iran.

[00:06:39]it is everything happening around that is going to determine what happens next with Bitcoin's price. And so things obviously can play out one of two ways going forward. You could see tensions rise with Iran. You could see you know oil continue to spike higher, inflation continue to spike higher. And then you know each time those prints with inflation get higher each time oil continues to go higher. That's making the market more and more fragile. And so as you see that pattern play out, you you'll have a little bit of time. It's not going to just happen overnight. As that pattern continues to play out, you'll pretty well be able to assess that Bitcoin is getting more and more fragile and is more and more likely to see a leg lower. We're on the opposite end of the spectrum, which I actually think is a little bit more likely, especially what just happened with the USChina peace summit. If we see tensions cool in the Middle East, okay, so China just came out and said, "Hey, you know, we don't want this straight of horses closed either. We're going to work with the US to make sure that stops." If we can see that wrapped up, you're going to see the price of oil fall. If oil falls, that will ease inflation fears. Even if we get a couple more higher inflation prints, the market will just look through it and say, you know, obviously this is from the Iran conflict. That's over now. So, this is going to be like a temporary, you know, blip in higher oil prices before things go lower. That'll cause yields to stabilize. That'll cause the dollar to soften and that'll create a risk on environment, especially for crypto and Bitcoin, especially if you look underneath. AI enthusiasm isn't running short or or running low. This will only continue to grow. Liquidity conditions are great. Like, there's nothing wrong with them. specifically in terms of like the wider picture. Crypto adoption, the institutions interest in crypto and all of that isn't slowing down and and overall the Bitcoin structure looks good. So there's basically four things that I'm watching right now. The first one is that again markets did hold up the wider stock market because that also is going to have an effect on Bitcoin and crypto held up pretty well despite the CPI and PPI prints which is really bullish.

[00:08:25]Right now the Iran conflict has like a new high in pressure to get it ended.

[00:08:30]Okay. especially with China and the US collaborating, especially the closer we get to midterms. I don't know what Trump is doing in terms of midterms. Like, he is really, really screwing himself in terms of midterms. He has to get on this right now. And so, you can expect more and more pressure to get this Iran conflict wrapped up as soon as possible.

[00:08:47]In fact, I just saw some news come out today about this where it looks like they're lifting some uh restrictions on oil from Iran and all kinds of other things. Uh that might be an early sign of maybe maybe finally a peace deal. I don't know. This has had a lot of twists and turns. So we'll see. But there is an unprecedented amount of pressure to end this right now. And it doesn't have to be a full-on peace deal to get it wrapped up. Really, I guess when I say peace deal, uh what we need is the straight of Hormuz open. So any sort of deal that gets the straight of Hormuz open, oil flowing through that feels semi-permanent is enough to get that, you know, kind of wrapped up. kind of an X- factor is the new Fed chair and inflation and what's going to go on with that. We know or we suspect that Kevin Worsh has some sort of bias to kind of do what Trump wants him to do. Trump wants rates lower. He interviewed a lot of Fed chairs. He said he was going to interview based on who would lower rates. So, we know Kevin Worsh had to sell Trump on like for some reason he was g the guy to lower rates. So, I you know, I don't know a little bit of an X factor. I don't see how he could do it given how divided the Fed is right now, given how bad inflation is right now, but that is something to watch. And then the last kind of major tailwind is actually the China peace deal is, you know, actually pretty bullish. Uh because we've had this whole trade war, all this tariff madness and and stuff like that. Um that has actually previously been pretty bearish for the market that just really got wrapped up.

[00:10:08]And China working together with the US against Iran is insanely bullish to get that wrapped up because that China was kind of like Iran's ace up the sleeves sort of, right? and and if the US and China are working together to get that wrapped up, that's a lot more pressure on Iran. So, to bring it all together and wrap it up, right now is more of a temporary setup. It could become permanent. Uh depending on how things play out, depending on how long this conflict with Iran lasts, if this is like, you know, Ukraine and this is going to last years and years and years, then yeah, this is like the new permanent macro regime, this will eventually impact the stock market and it's going to be just overall really negative for the overall market. If however you view it as temporary uh which I do view it as temporary. I do think we're going to figure out something in the near term. There's just too much pressure to do otherwise then right now the market's expectations are really negative in terms of inflation and all these things like that's where it's flipped to uh because of the recent prints etc. And so any of these things unwinding, any of these bullish catalyst coming where the conflict ends is a surprise and expectations to the upside which means it's a bullish catalyst in the future that should send the market higher and and structurally be very bullish for crypto, Bitcoin, etc. And that's the side of the fence that I currently sit on. I think this conflict with Iran will get wrapped up sooner rather than later. I think the straight of horm moves will get worked out sooner rather than later. I firmly believe October will not be the bottom like most of the bears are believing and in fact will be higher uh you know quite a bit off the bottom by October and the bears will be buying back in higher and I think all of this is leading up to what I call the AI super bubble. It's going to be a retail infused mania like the 2021 everything bubble, like the 2000's.com bubble, where retail just goes absolutely bananas over the absolute garbage of the market, just like they do every single time there's a new technology that hits the market. And I think AI's super bubble is going to be the bubble to like rule them all, the ultimate retail infused mania. I don't know when it's going to happen. I'm pretty confident it's not going to be 2026. Uh it could be 2027, 2028, or 2029. But my long-term plan to make a fortune because I think this is going to be the biggest money-making opportunity of my lifetime is to play that bubble.

[00:12:15]Now, in the short term, obviously, I like I don't think there's going to be a lot of money to be made in 2026, just to be completely honest. I think it'll be decent money and overall a decent year.

[00:12:24]I don't think it's going to be as bearish as the bears think, but I also just don't see how things going to turn around to make it extremely bullish by the end of the year. So, right now, mostly consolidated down to like a core AI portfolio. I'm being really careful and strategic with what I'm holding and why I'm holding it because they got to be kind of sort of long-term assets that can weather over the next couple years, which there's just not a lot of alts that can do that. And then I've been spending a sort amount of time just like trying to build out different like trading models. If you guys been following me for any amount of time, I like since 2022, I've been using AI to code out stupid things and try to build out different things. And I I've actually had some decent success. I had a model that for over three years did around 50 to 60% annually, which is pretty awesome. If you guys remember that, that was the ghost tiger strategy.

[00:13:03]I've also tried just about every passive income idea out there. Like literally every so many different like ponzies and craziness and anything. I don't know. I I guess I am always seeking that golden goose strategy, you know, something that can just print income month after month after month. I know they're out there. I know they exist. There's a guy in the OC that does, you know, he has his his own strategy. He does 5K to 15K a month. I know plenty of other people that have successfully done day trading uh for years and and they'll make similar amounts. 20 20k a month, 30k a month, 50k a month, and even myself, I've done day trading. It was amazing. You know, I did I did make like 90k in a couple months where I was like, whoa, this is I've never made more money in my life.

[00:13:42]Uh but then, you know, in one month, I lost like 80 80% of that. It was super fun, but then it was also kind of super miserable. And maybe the most stressful thing I've ever done in my life was day trading. And I've seen so many of these guys like make, you know, James win where he went from, I don't know what he started at, but all the way up to 100 million, then lost all of it, now he's down to like $4,000. I've seen so many people do that where they they make a ton of money and they lose it. And what that shows me is it's really easy to lose that money. But two, it's also seemingly really easy to make that money. There are strategies and things out there to make that money that these guys that don't seem, you know, that incredibly smart are able to do. And so I I don't know, maybe it's kind of foolish, but I am always obsessed with trying to figure out what those strategies are. And like I I've been I've been I've been searching for a long time. And what I've been working on lately for about the last year and a half is building out those strategies with AI, like coding them with codecs and cloud, etc. And I built this whole data library and testing engine and all this kind of crazy stuff to do that. And so that's kind of like a a side venture that hasn't really yielded much fruit at all yet. It mostly just cost me a ton of money. But that is sort of my short-term side quest I've been doing. And maybe just a casual reminder that you, you know, like, yeah, the big market everything bubbles take a long time to build. They're really like notoriously hard to predict. But historically, they have always come with a new major technology. And that's what gives me so much confidence we will see an AI bubble. But in the meantime, as you're waiting for that bubble, there's a lot more things to do in the market and a lot of other ways to make money. And while you wait, make the most of your time and keep growing yourself and learning new things. And if you're curious about seeing my entire portfolio or you want to see every time I buy and sell various tokens as well as different weekly video market updates, uh, currently the Obsidian Council is closed to new members, but you can sign up for the weight list in the description of this video. As always, none of this investment advice and this is me telling you to do anything with your money. I'm obviously not your financial adviser, nor should I be, and you should always do your own research. If this video is helpful, make sure to hit that like button, and if you want to see more videos like this, make sure to hit that subscribe button and the little bell next to it to be notified each time I release new video. Thanks for watching and I'll see you next