In financial markets, bear markets bottom when nobody cares about the asset (peak apathy), while bull markets top when everyone is optimistic. This counterintuitive principle means that when sentiment becomes so negative that people stop caring about an asset, it often signals the market is near its bottom. The key insight is that the most dangerous time to exit the market is when everyone is indifferent, not when they are panicking. This concept applies to Bitcoin and other assets, where the combination of on-chain metrics (like MVRV ratio) and sentiment analysis can help identify these accumulation opportunities.
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This Signal Has Called Every Bitcoin Bottom. It's Back.
Added:the world in a real [ __ ] pretzel right now.
>> There is so much of this I'm feeling among the people out there where they're just checked out. They're done >> in 2017 and 2021. The way I would describe it, it was one big wave, right?
There was a rally and the long-term holders sold into it. Now, the difference this cycle you put out this report together basically was called peak apathy. This idea that nobody cares about Bitcoin right now and you just love to see it. Vibes have been weird.
Beer shift is celebrating. How did we get here?
>> Why do bare markets bottom? They tend to bottom on the exact opposite dynamic to bull market tops. Bull market tops are optimistic. Bare market flaws occur on peak apathy. Nobody cares. And why does this matter? Because in order to my plan is to buy like a madman because the moment we break above 80k I stop. Once we go above 80k we are back off into the races. Now is not the time to check out and not stack harder. It's like double down, man. You're you're here. If you're listening to this, you're clearly interested in it. Like, double down.
[music] Michael Sullivan, James Czech, Checkmate. Had you both on recently.
Great times. We've got you both on together now because you guys just came out with a a piece for Check on Chain.
Uh folks should go check it out.
Checkmates newsletter. Uh peak apathy.
Nobody gives a flying bees dick about Bitcoin. I don't think I'm using that Australian saying quite right. But um you know, we'll give it to you. Yeah.
>> You know, let's just pretend I am. Okay.
I want to I want to get into multiple aspects of this just to set the stage.
You guys collaborated in this check. for those who don't know who've been living under a rock. You do like you're the best you're the best onchain analyst out there. Uh got a great newsletter. People should go check it out and check on chain. Michael, people may be less familiar with you. I narrated your audio book, Blood of the Bourgeois. Still can't spell it. That's okay.
>> I tried typing in multiple times. I bought the book, but it took me a few Googles to just like I know the word. I just can't spell it.
>> It's it's it's words are tough sometime.
I'm not even like dyslexic and that one that one messes with me. Uh, I guess that's just very bourgeoa of me, you know. But, uh, you you wrote this book and you've been recently though doing a ton of sentiment analysis, basically quantifying the vibe, as I like to think of it. You guys put your brains together. You put out this report together basically called it was called peak apathy. This idea that nobody cares about Bitcoin right now. And, uh, to quote the tagline of the article, and you just love to see it. Okay. So, maybe we can start out just to set the tone.
This will probably be published. We're live now on Noster. This will be published everywhere else. Maybe tomorrow or the next day, but we're right now at 61,697 infinitely printable Federal Reserve notes per coin uh USD. Uh not sure what we are in in Kangaroo bucks or Canadian moose shekels. Um more than that, vibes have been weird. Uh price is down.
People, you know, Peter Schiff is celebrating. Maybe we can start out with just like how did we get here? How did we get to nobody caring about Bitcoin right now?
How did we get to the place where the only scarce asset, the only completely finite asset in the world that nobody gives a rats hoot about it? Like, and I'll just leave this open cuz and this we can unpack this a little bit more, but it's wild to me.
>> It's wild.
>> Number go down. I mean, number go down is just the it's it's it's the vibe kill. So, we're here to do some vibe engineering, right? to help people understand why these things happen. I mean, look, there's a ton of reasons for this current setup. I mean, it it takes a while. It took a while for me to like fully process it, but it's it's pretty clear that there's just a black hole of value going into the AI trade.
Everything literally everything that is not AI is getting sold to just go into the AI trade. It's like it's just an absolute black hole for capital. Now, what that does is obviously Bitcoin pulls down. Um, from my perspective, and the reason why I really gravitate towards Michael's work, uh, my work looks at where do people buy their coins, their cost basis level, where is the price relative to it. As you can imagine, when a ton of people bought a bunch of coins at 50, 60K in 2024 and then we went to 100, they're feeling great. Vibes are good. People are in the money, right? They've recently bought the dip and they've been strongly rewarded for it.
What happens when those people buy at 100, 110, 120, and then the price pulls back down to 60? All those people are underwater. The vibes aren't strong.
Their unrealized losses go higher. Uh people have been trying to buy the dip and it was the dip that just kept on dipping. Uh and you end up in this environment where people are now underwater on their bags. Now, there's a tipping point because every bare market becomes a bull. Every bull becomes a bear, right? It's just the way that the cycles go. It's the circle of life. Uh why do bare markets bottom? They tend to bottom on the exact opposite dynamic to bull market tops. Bull market tops are optimistic. They're exciting. They're high energy. Like it feels like there is no ceiling. Bare market flaws occur on peak apathy. Nobody cares. And why does this matter? Because in order to imagine the headlines that we've been seeing recently, quantum is going to get used by Jane Street to market manipulate Bitcoin to the point where it's going to die. There's just like a thousand1 reasons why Bitcoin is dead. Um, oh, and by the way, Sailor owns a quantum computer and he also wants to kill it.
Like, choose your narrative for why Bitcoin is going to zero. There's always a ton of them. The people who are currently owning and buying Bitcoin are not tourists. They're not people who, you know, price can go all like markets can do whatever. They've just got to find their level, right? They got to find their ultimate clearing price.
People spend too much time worrying about the ultimate bottom. Uh but the reality is that you end up with no one left except us right now. When there's only us in the market, it takes a long time to hammer out that floor. It's usually on leaky price, but the downside momentum is gone because the sellers get exhausted. Eventually, you run out of people who are going to sell, but you also don't have that many people buying.
So you end up in this kind of like equilibrium phase of the vibes are down, the unrealized losses are bad. It feels [ __ ] because it doesn't go anywhere, but at the same time, you're also very close to it is the point of maximum opportunity. And a lot of people get distracted because of the boredom. Um, so that boredom component is a really key element. I look at it from the onchain side, which is like how people spend and hold their Bitcoin. And then what I think Michael brought in is like let's look at it from the actual vibes of the people talking on on Twitter. So, I'll pass over to you, Michael, to add some extra flavor to it.
>> Yeah, language is a very different thing than onchain metrics, but like uh all words that we choose to use are indicative of like emotions hiding beneath the surface. Like there's a ton embedded in language that I don't think people typically understand. Words that you'll subtly use more frequently when you're in certain moods versus others.
And I'd always noticed this in previous Bitcoin bare markets, specifically when people argue with each other about increasingly dumb stuff like it's happening again right now. Um, and I I really wanted to like quantify it and measure it and visualize it. Um, and doing so was really illustrative about like just how pissed off people are right now and how bored people are right now, which is even since James and I did the piece together has been increasingly interesting. Um, because like there's a little bit of peak excitement that happens on big dips, but people are getting increasingly angry here afterwards. Um, but the the the narrative thing that James mentioned too is particularly interesting to me because when markets are down, people are desperately looking for a story.
Like humans are like storytelling creatures at their core. There's a reason we talk the way we do about other people and we watch the stories to understand the world. It's like a framework that we use to like understand what's going on out there. Um, and when the market's down like this, people really want a story for why that's happening. When there's like an FTS collapse, there's a really easy story to latch on to. In our present market, that story is much more fragmented and clear, less clear than it has been previously.
I am of a 100% agreement that the AI thing is a large part of it. One of the more interesting narratives I've looked at was like how frequently AI is talked about over time, specifically among Bitcoiners, and it's up into the right very consistently. It's really taking a large amount of mind share. But there's also a really interesting element happening right now among like how much algorithms are kind of bucketing us into different groups and among the Bitcoin community specifically how fragmented we all are now too. Um Sailor just did a piece that I've been thinking about where he buckets co Bitcoiners in different groups and like if you're a big cap Bitcoin capitalist person if you're really into the treasury companies you're in a totally different window to the people that are like building stuff. And it's kind of a weird dynamic in Bitcoin right now where there is these really isolated environments and they're all kind of experiencing different things. So some of the group camaraderie that's happened in like 2022 uh just is not happening in the same way way right now even though price is in a similar position.
>> Yeah. And I think just to add to that I mean I experimented a little bit with my Twitter algorithm and I noticed it because as an Aussie uh we recently had a bunch of tax changes which I won't bore you with the details of. I literally engage I mean I wrote a piece on it. It was I mean it's disastrous so it pissed me off. So I wrote a piece on it. I was engaging with some of the other folks were talking about it and my whole feed instantly just teleported into Australian politic. All Bitcoin disappeared and I was like, "Fuck, that was quick." I was like, "That's very strange." So then obviously my job is to try and assess markets, right? I got clients who um I'm trying to help understand what's going on. So I went through this exercise of I'm going to go and like a couple of bullish posts. And suddenly my feed was full of more posts like that as well as folks drawing arrows that go to zero. And I was like, like I'm obviously like that just so ridiculous. Of course, I want to engage with that. And then I thought, okay, let me try the other one. I left it for a couple of days. I came back, liked a couple of bearish posts. Next thing you know, I've got moonmath, right? Moon math all over my screen, arrows, whites, it's going to a million dollars, and then the same bare every every bare flag pointing down at 45K. Every single one, just chart after chart after chart. And I was like, this algorithm is up utterly cooked. And I've been on this bandwagon for a little while now. I can't remember how long ago, but maybe probably coming up to a year. Um, I made the decision, which I highly recommend, delete Twitter from your phone because it's just it's just bad for you. Uh, deleting it from your phone just removes that whole and it is it's addiction because you want to go and engage with the [ __ ] that you think is ridiculous or you agree with, right? Then you're looking for confirmation bias. And I increasingly just go, you know what, it's just such noise. I agree with Michael. There's like this fragmentation. Um, Nosta's probably got part of that as I saw Odell's recently come back to X. He's like, you know, I probably shouldn't have left because it's just become a cesspool since I'm not sure you can fix it, Matt, but um all power to you. Uh so I think that's like that's part of the mix. There's been this like fragmentation of like the real Bitcoin Bitcoiners have all put themselves in their own silo. Um Nost is great, but there's only like I I actually try to get stuff that isn't Bitcoin. Like I I kind of understand what's going on with Bitcoin. I actually want to understand what's going with the rest of the world and your finick guys just are not on Nosta, right? And they're not going to Nosta. Uh so my general framework, I just was like, you know what, I'm just going to spend like considerably less time here on X uh and actually move across just spend all my time on my own substack because then I can actually do the long form. I can put the detailed work in. I can do the thought process.
And what I thought was one of the many of the key elements. One of I thought was really cool with Michael's work was this like inverse oscillation between OGs and plebs like the the volatility of the mood of people who've been around markets for a little while is much less and they tend to get optimistic when others are super angry. Uh and to to kind of build on that anger at Mr. Market is a sign of investor immaturity.
You cannot blame Mr. Market for your poor performance. You have to blame yourself. The only person who can make decisions in this market in any market is you. If you are underperforming or you feel like you're underperforming, do not blame Jane Street. Do not blame the whales. Do not blame Binance. Blame your decisions because that is the literally the only thing you can control. You can't control any of that stuff. Your decisions are the only thing you can control. And the default behavior of most people is to blame someone else for their performance. So that anger is a great way to separate people who are experienced in markets and those who maybe not so much.
>> It's so interesting watching how they deviate over time too because like one of the first things I did was break them up like the different users I was tracking. Very much inspired by the idea of like long-term holders versus short-term holders. Like you can kind of cohort these two groups, look at how long they've been around to see what they're talking about and then kind of see what how their language differs and their moods differ. And it's still striking to this day like as of right now even like the average pleb retail Bitcoin holder smaller account is much more angry right now comparatively the people that have been around longer like the OGs or just like more experienced market participants and that's like really interesting signal to me personally whenever those kind of things happen. Um the other thing James alluded to was something I kind of intuitively knew but stumbled upon literally with the data too. an idea of kind of like sentiment volatility is how I've been referring to it where like I think most people can empathize with this to some degree like when you come into Bitcoin you're like euphoric about Bitcoin it like consumes your mind it's like the whole thing and your emotions like rocket up and down based on what Bitcoin's doing that day and then the longer you've been here you've experienced some pain you've had to be humbled repeatedly probably I certainly have I've said some dumb stuff and had to grow and shift my opinion over time yeah um >> guilty >> and I saw this in the data which was really interesting to was very confirming of like I was on to something really interesting here where you see people the longer they've been in Bitcoin have reduced volatility in their sentiment. So there's reduced peaks of anger and reduced peaks of optimism and vice versa. And that trend is super interesting and it's like kind of fun to watch how the newer accounts are responding in comparison to older accounts. Okay. So there's like there's a bunch of different things to tackle there. Maybe one of the most I think interesting ones and perhaps for a lot of the people who are going to end up uh you know viewing this trying to understand because people people want to know why stuff is happening right every and we tend to assign narratives in retrospect. We tend to see you know X happened with price well that must be because of Y and Z that happened a little while ago >> and usually in 30 32 Bitcoin by sale was the re like it was the pressure that just broke the C. No guys.
>> Well, exactly. And so much of it is just is really ridiculous. Like it's the narrative you want to tell yourself.
It's the one that makes you somehow feel good or feel justified or or justify, you know, your own decisions, whatever it might be. And I think for, you know, you guys mentioned kind of the the more recent odlers, right? And I'm I'm in the, you know, the class of like it's maybe better to think about it in like in epics or epochs, however how you'd like to say, depending on what part of the world you're from. Do you okay you guys say okay we're on the >> same we're not we're not that strange here >> okay okay okay you know just wanted to be wanted to be conscious but like this last let's say from the 2020 having onward right if you became a Bitcoiner during that time like I did like you you got you got pretty hammered there now if you were just DCAing minding your own business and you DCA and you you know did some smash buys when Bitcoin went down to the depths of the bear you're doing okay but you're not sitting on the many many you orders of magnitude greater multiples of gains that people are from prior cycles. And so, you know, you've been you've been forged in the fires of chop solidation, checkmate to use, you know, a term that you use. And very much, you know, you can understand some of the frustration, right? You can understand and Michael from, you know, your perspective, what you're seeing through the sentiment analysis, you can understand why people are, you know, like you're pissed off and you want something to blame, right? because you're like what? I was promised I was promised Valhalla and here I am, you know, bleeding out on the battlefield like what the hell is going on here? I'm curious, you know, checkmate as we kind of map that sentiment, which I think, you know, everyone can see if you're if you're on Bitcoin X, right? You can see that, you can feel that. Michael has been able to quantify that. How does that translate in terms of the, you know, latest cohort of Bitcoin holders, more recent holders? How does that translate into the onchain data? What what does that show you from that perspective? Wish you could access cash without selling your Bitcoin? Letin makes that possible. And the global leader in Bitcoinbacked lending, Leen, has introduced their lowest rates ever.
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>> Yeah. So, this this cycle I mean there's a lot of similarities, but there's also a ton of differences. uh the way that this cycle has played out if I just take an idea of of long-term holder supply uh previous so the reality is whenever you go to a previous all-time high and approach it whenever the market is rallying towards the previous all-time high long-term holder selling starts and it it persists until you get and it usually peaks at the extremes uh but it generally will just continue to go until the bare market kicks in. So for us, long-term holder selling was very very consistent and heavy from uh the 73k all-time high in 2024 all the way through to November 2025 at 80K. So that whole period was sellside. Now the difference this cycle in 2017 and 2021, the way I would describe it, it was one big wave, right? there was a rally and the long-term holders sold into it and so formed this big U-shape in the long-term supply just declined decline declined then finally bottoms once we'd peaked this cycle was very different we had three such waves we had the first wave when the ETFs went live then they stopped then we had the next wave when Trump got elected in January and then they stopped and then we had that final rally up to 126 and then there was like this one two three waves of sellside uh so the interesting part of that There may not be the same people, right?
Some people would have sold at 73K and then would have rebought at 50K in 2024.
Also, the people that they sold to, ETFs, new investors, whatever else, you've kind of got this initial rotation of holders, then you had another rotation of holders, then you had another rotation of holders. But what's really interesting when you look at the downside in the bear, we've had a ton of losses. Like there's no there's no doubt about it. We've had I think in my view three capitulation events. Um the first one is in November. Then we had what I call the price paying capitulation in February. We all felt that. Everybody knows that that selloff at 60k. The first time you felt it in your gut that this was like a this is a big one that flushed out a lot of people. We've just had a what I'm going to call a third capitulation potentially what I call a time pain capitulation. After this there's just no speculators left. Now, those losses have been significant on the same scale as 2022. But we've got to remember in dollar terms. Bitcoin's much bigger than it was in 2022, right? Three to four times larger in terms of coin price. There's no hard and fast rule for how big anything needs to be, right?
There's no like rule that it must get to this level, it must do this. There's a lot of things that are similar. Um 50% of all the coins are underwater now.
That's typical of all bare markets. Um 85% of all dollars invested are underwater. Um uh that's again same as all bare markets. The draw down depth isn't as bad. Uh my kind of big picture stitching all of this together. I think a lot of people are aware that we didn't get the full blowoff top, right? The full euphoria. Now what does that euphoria do? It sucks in the uninformed, right? But those people got sucked into the silver top. And I know I've I've told this story before. I saw them in the line to buy a silver. They had no idea what a troy ounce was uh paying ridiculous premiums. So like a lot of people got sucked into that bubble. Um and they are now down as more than Bitcoin, right? Silver's doing as bad as Bitcoin is. Um so that's where when you get the euphoric parabolic moves, it sucks in the less experienced, right?
The fast money speculators. We didn't really get that in in 2025.
So yes, we would have pulled in some new money, but for the most part, a lot of the people buying Bitcoin kind of are just Bitcoiners. And in my view, we're seeing this play out where the downside isn't as severe. The losses haven't been as significant. They've still been big enough to like shift sentiment, but they haven't been of the same magnitude that you've seen in previous cycles. The way I would frame this up, we have a lot more hodlers at the top and at the bottom. So, we still have speculators and tourists and fast money and people who want to rotate out into other stuff.
That's still bare market things, but we actually have a more core holder base of people who are just like, I'm just I just own this thing cuz I own this thing, right? It's part of my it's part of what I own long term. I believe in the long-term vision of it. Sucks that we're in a bare market. In fact, I talked to a lot of my clients. Sucks that we're in a bare market. Doesn't change my overall thesis, right? Sure, I might buy later on. I might want to rotate into this for the now time, but at some point in time, I'm I'm buying back in because I still understand the Bitcoin thesis. It just becomes a timing game, right? Waiting for that flush out to happen. So, that's my like big picture view. I think that we've kind of had a lot of the tourists and speculators washed out even though we didn't suck as many of them in. Um, it's why I think the silver bear market is going to be much worse than it is for for Bitcoin because there was a ton more people who have no idea what they bought and now they're going to have to go and line up and sell it at a $100 discount because they just didn't understand what they bought in the first place.
>> Michael, anything you want to add to that? Maybe from the perspective of with your sentiment analysis, are you able to do kind of comparisons to for historical data? Like obviously you can take the pulse right now, but can you also look at that pulse and how that pulse changes over time and and are you able to do that with these cohorts you're looking at?
>> Oh, for sure. Uh the how far back you can go is a little bit restrained just due to the fact that you're like looking at people that have been in Bitcoin two years. You have to kind of like adapt over time. Um, but what I do have is OGs who have been posting for a very long duration of time. And I specifically went back for some of those people that I know have been very active for long durations um around this topic specifically because I wanted to see how they were acting via the 2022 bottom and then even longer. And one of the things that really stuck out to me uh specifically in that group was their optimism levels uh around the 2022 bottom. Like I lived through that. I felt it was pretty fun time to live through to be honest with you. I I really like genuinely was enjoying myself back then. Um I was newer to the space at the time. Um I was early 2021 class so it was like really my first time going through that experience really u like kind of formed my opinions around that time period. Um but what what really stuck out in addition to that was the amount of engagement that those accounts were getting. So like I can look at the moods, but another like variable on here, like if you look um at like the amount of volume that's happening in the Bitcoin chart, you can see like how many people are trading.
Well, you can look at how many tweets are happening during that time period, how much engagement each of those tweets is getting, which is really interesting data, too. It is uh like adjusted for a per tweet basis. The amount of engagement the OGs were getting at the end of 2022, early 2023 was skyhigh compared to now. same account, same conversations they were having about Bitcoin, like different people, but like the engagement rate and the optimism was really really high back then comparatively to now, which is kind of an interesting dynamic. Um, and that sentiment volatility piece that I mentioned earlier too was very much apparent where there's like much higher swings uh in the volatility of Bitcoin and the volatility of the moves, which is kind of an interesting thing because it's very much like intertwined. Okay.
So that's fascinating because if you know looking at the engagement I think a lot of people have even you know commented on that called it out you know whether you know X is dead Twitter's dead whatever that the usual sorts of things and yeah some tweets pop off like you know you never know but that's interesting and sure you could probably attribute some of that perhaps algorithmic changes whatever it might be. We mentioned earlier that you know like the algorithm is uh is very quickly adapting to you these days on X like there it is like you know you like a couple of things and it's like boom you're getting that for the next couple hours and it's like okay what just maybe some other things would be nice but but I do think that that's that is indicative of at least like people I've talked to what I've just personally felt again I wasn't around for prior cycles but at least you know since 2020 feeling that and and it's interesting because this goes back into kind of the core part of your your joint thesis this peak apathy thing this idea that nobody really cares about it right now like yes checkmate to your point the core group of Bitcoin holders are you yeah we're we're still you know we got the DCA set up we're smash buying when it when it looks really nice praying for 58k just so the prophecy can be fulfilled and we can go to Valhella after that you know we're getting so close to 58k by the way so close but uh they're they're getting blue bowled on that one but I I wanted to to ask about the fact that okay given that is that just go does that just go back checkmate to what you said kind of at the at the outset of the show which is the idea that look a lot of the money is chasing the AI side of things right now a lot like it's just people are focused you know somewhere else right now they're deploying new capital somewhere else they're not looking at Bitcoin as the fastest horse right now is is that what that comes down to that people are just they're engaged both attentionwise and monetarily with other things I think there's a few elements to this. I've been spending a lot of time thinking about it and I think it's actually a very big topic. Uh let's start small and we'll zoom out. I think there's three key things that I've just had my mind on. I think first and foremost uh the treasury company thing strategy. Now I think strategy and everything they're doing is fascinating.
I also don't like it. Like I I I own I've written about this. I own a tranch of MSTR specifically to sell. And the reason why I I takes sometimes when I make decisions, it actually takes me time to like actually think about why I made that decision. Um I actually bought the MSTR so I have something to sell in the bull market because um I don't plan to sell my Bitcoin unless it's OP because I've spoken about this. My Bitcoin is for specific things. Buying a house, um paying for my kids education, like it has a it's not denominated in dollars, it's denominated in school fees and mortgage, right? that's what my Bitcoin is denominated in. So, it's a different trade and I can't honestly sell it because there's all tax implications and it's a lifestyle decision. Whereas MSTR is a trade, but I actually hate that I hold it because if I could construct a world, which I can't, if I could construct the market that I would like to see, I would honestly truthfully prefer that the whole Treasury company thing didn't happen because I think it's added unnecessary leverage. I do believe a ton of people I get it. He's bought 800,000 coins. It's great. Blah blah blah. I also I find the products fascinating. I know a lot of people find it to be very intriguing, but it has added a whole layer of this. There are institutional investors who look at that 840,000 Bitcoin and say that's a risk. I can't buy it because this thing's it's like a sort of damocles. They just simply don't understand the mechan. It doesn't matter that they don't understand it and they're bewildered and all that kind of stuff. All true. I think the Treasury company think sucked a lot of oxygen out of the room and it really just destroyed capital. Every, let's face it, every marginal dollar that bought into any treasury company's stock in 2024 has just absolutely incinerated that capital right down 80% plus. So I think that is a internal thing to the Bitcoin space that has I think it damaged sentiment of the bear severely. Uh I think it absorbed marginal capital then got incinerated. Uh I think it added risk. I think it's added leverage. I think it's added liquidation like I know sailor's not going to get liquidated but institutions know if the stock price goes I wrote about this if the stock price goes to 25,200 the preferred plus the debt is worth more than the treasury. So MSTR equity value is zero. So there is a level on the chart that is like MSTR quite literally mathematically goes to zero.
These things create risk. So I think that's one component of it as like a internal oxygen suck. We mentioned the AI thing. I think that's another one kind of medium term. The biggest picture one, if we zoom all the way out, the world's in a real [ __ ] pretzel right now. Like it just every single person I think just needs to like you can feel it, you know? Um, I've noticed I talk my even my mom my mom said to me the other day it's she calls it the inshitification of everything. Services just get worse. The quality of everything gets worse. Um, people are genuinely worried that like AI is going to actually remove parts of their job.
There's just like 50 different things.
There's wars going on all over the place. There's inflation going on everywhere, right? I think people are just kind of overstimulated by just the immense amount of forth turning [ __ ] that's going on right now and probably underappreciated. I think that come I notice when I like I have tennis training on uh every Tuesday night um and you know I'm on the road at 6:30. The amount of people who just walk across the road on their phone and just like don't care. This is new. I don't recall this in in many years um prior.
People have just stopped caring. They just don't care anymore. And it's just like um I I rented a car a van to move house, right? Months in advance, paid in advance at um car rental place. I show up on the day they've like the van's not there cuz the dude who already had it, they're like, "Oh yeah, just we extended his lease." I'm like, "What do you mean you've extended his lease? I I rented the [ __ ] van. I paid for it. What do you mean you The whole point of It's the Seinfeld joke. The whole point of the reservation is you have to keep the reservation." And this happened again recently. we tried to get a new office and they're like oh yeah we just kind of rented out the office that we wrote out on paper that you could have and I'm like what is going on in the world? So I think that component of just like there's so much [ __ ] going on in the world that people have just kind of just soured on everything. They don't find anything interesting anymore because they've been overstimulated by the algorithms. They've been punched in the face by endless news cycle. The fourth turning is just twisting them upside down. I think that's like a real meta thing that you kind of have to sit back and recognize is going on and it does it makes you pissed off. You know, suddenly the government comes and changes our tax policy and just completely [ __ ] the future for all Australians. It's like great and then you get to ram it through parliament. That's great. I feel fantastic. Thank you so much for helping me. So, I think there's all of these components, right? Zooming out, I think treasury companies are a part of it. AI trades a part of it. That's more in the financial markets. But then there's just this like overhanging meta of the inshitification of everything. I think everyone can feel it. Um I think that's that's that's a real vibe dampener I would say.
>> And Michael I want to ask you on that like how how much are you starting to look at the vibe outside of let's say the more macro vibe but not macro from a financial perspective just like real macro macro vibe. Is that something you're looking at or you're tracking at all or can you can you quantify it for us please? the shitification vibe.
>> One thing that's interesting before I do is like I think so many people come to Bitcoin for different reasons. And as much as I'm fascinated by markets, how they work, why price is doing what it's doing, a lot of us are here for these deeper worldchanging reasons. Like we view Bitcoin as this thing that's going to potentially fundamentally fix some of these toxic disjointed systems that exist in the world. So to watch them continue to rise for things to become more in shitified. Yet in our our thesis here about this thing that could potentially fix the world taking longer than we'd hoped. Well, we were correct in our thesis that the world is getting worse because of the things that we also predicted might happen just so much harder. You know, like uh it's it's like peak apathy but abstracted to not just like the Bitcoin market but the broader world. Because I I completely agree that entire thing you were just going on that rant there, but like there is so much of this I'm feeling among people out there where they're just checked out. They're done. They're they're like they're using whatever they can to medicate themselves and just check out and not be as present with people in their life anymore. And it's really heartbreaking. Um yeah, the the actual quantification of that much harder to do. I've been very specifically focused on the Bitcoin cohort because there's so much uh inside of it that's interesting. um and and watching how different groups have different narratives that take on that kind of thing. But um the apathy has continued um since we did our piece, which was maybe like a week and a half, two weeks ago now or something like that. It it's only continued more. I I was really fascinated after the big sell-off um because we got underneath 60K and I can't remember the exact price where the piece came out, but it was closer to 70. Um I was uh just like excitedly refreshing my data because it takes a while. It's like I have to ingest a bunch of new data. I have to run it through all these like models and do a bunch of work and I was just like so giddy about it because it was like a big downward price move and I was really curious to see like if anger was rising these other things but that wasn't the case. It like there's a little bit of excitement that happens on these big volatility days but in general it was just like same old same old. It was more checked out. Um the like it there there wasn't like a massive spike in anger which people might expect. That might still be coming because it's usually the longer boredom durations that increase the anger. there wasn't like increases in pessimism. It was just like flatlined. People are done. Um the one thing that did deviate which Czech might find interesting is conviction. Whereas like the moods are bad consistently. The plebs had relatively high conviction and just plummeted over the last like couple weeks. The OGs on the other hand are also pretty sad. But their conviction levels have been on the rise which is fascinating to me because it was the only deviation I was really looking at across everything I saw. And conviction is very much related to like the stories you tell yourself about the world, what's happening in the market. So like to me, even though moods are bad, like the OGs don't necessarily like they they feel like they understand it potentially. That's at least how I'm reading it. Whereas the newer retail people are like more um concerned that their framework they were using to look at the world is kind of crumbling beneath them.
>> Yeah.
>> And to be fair, I think there's sorry, there's another element here. Um we are watching. So Bitcoin is a special asset.
So is gold. They're a special asset in the terms of like we can actually maintain that conviction because the thesis is correct, right? The thesis is and I think about this from like I've got an infant son. I can stack UTXOs for him that are I can't like it's very hard for me to give him a stock portfolio.
It's very hard for me like I can I can't hide cash under his mattress because it won't be worth anything by the time he's old enough to use it. Like gold coins.
Really? He's got to go and line up. He's got to go and line up and sell this thing. Like ridiculous. let's get out of here. We're not Romans. So like stacking UTXOs from like I having used the technology, I'm like this is just so much better. This is the path forward.
So the thesis is correct. Look at the crypto world right now. Their thesis is they're going through the exact same like emotional journey that everyone else is. But the problem is that they are realizing that there was nothing there. And that's like brutal, brutal because like the thing with Bitcoin, some folks call it a religion, like a it's a cult, it's a religion. Like, yeah, it's [ __ ] so bullish that it's a cult and a religion. Because it is, but it's also because the thesis is extremely sound, right? It's digital sound money. It's really not that hard to get your head around of like the core thesis of it. If you can understand sound money, we made a digital first time, you can't copy paste something and it's fake, right? It's it's incredible.
There's no tungsten in the middle of my UTXOs from that component, right? Bitcoin has there's there's going to be a flaw. A lot of these crypto coins, we're watching this. I've always believed that Bitcoin has missed who just like rode off the whole crypto industry. They missed the opportunity to observe Wall Street get built bug forbug, problem for problem, and the reason why we have regulations. And now they're getting to watch like what it would be like to watch the ass fall out of your entire thesis and realize that there is just nothing there. It's just air. It's rough. Like it's brutal. But like we're watching this play out when there is no floor across the rest of the industry, right? Which is Bitcoin will survive.
It'll get through it wherever the market clears. Some of this stuff will just never clear. It's just going to it's just down only forever. I mean, you saw Charles Hoskinson, old mate Mr. Cardano.
He's bailed out now. It's like he's taking some time off. I'm like, really?
You're taking time off now? Okay, fair enough. I feel like your guys might need you at this point in time to tell them some bedtime stories, but maybe that's the calm way of just putting it to bed.
>> Yeah. No, it's it's super interesting. I think I think honestly like uh prediction markets in many ways are just going to cannibalize all of the volume in crypto. You've already seen Robin Hood, Gemini, Coinbase, I'm sure others, other of the, you know, crypto casinos have pivoted to putting prediction markets front and center in terms of instead of the new shitcoin dour, right?
Because they realized it's like, well, let's just, we don't, let's be honest, everybody was just in crypto for the gambling, right? So, let's just cut out the middleman. Let's cut out the [ __ ] token, the [ __ ] blockchain.
Just do actual gambling. Like, sweet.
Perfect. You can bet on the weather now or the you know or or the Packers game whatever it might start from Wisconsin.
Um so you know Green Bay Packers but okay so crypto stuff aside they are getting wrecked the the death of the death of quote crypto is is nigh. Uh as we look at this I want to kind of like I want to I want to flip the page a little bit because we okay sentiment do [ __ ] uh onchain metrics appear to be signaling some sort of you know what you what you said checkmate like this third capitulation m maybe we're near the bottom >> yeah exactly and and checkmate I mean again I I'll go back to this and pat you on the back a little because you did you you told me I think the first time we chatted this was when the bull was popping off you were like 55k is the bottom that's that's that's what you >> yeah and we're close to that right is that still your thesis in terms of do we need to touch that or or or can you yeah can you walk through that a little bit like does it have to hit that or is that like look as if we go deep >> there's no level has to hit okay >> there's no level that has to hit um uh price paying capitulation at 60k in February the the reason I use these bookends and these ideas it's it's points where market psychology shifts very very meaningfully so on February I was like and this recent selloff nowhere near the same the amount of calls I got from people who were just absolutely terrified was off the chart. I've I've spoken about this at length. Uh literally had to close Twitter. I couldn't answer all the DMs. I'm like, I'm sorry. That's tomorrow's problem.
Too many things going on. So, there was palpable fear. And then we see it in the amount of loss that occurred on chain.
This current sell off down to 60K similar magnitude. Well, not quite as large, but you know, $1.1 billion in a day of just loss. Um it was two billion in in February. So significant loss event the price paying capitulation in February switches the mindset so it gets rid of all the tourists who are just there for number go up right there's no thesis involved whatsoever the time paying capitulation gets rid of the people who have a thesis but they're concerned that it's broken so they're the folks who like it's the sidewaysness after hitting that bottom that they can't actually continue to hold the thesis. It's kind of the difference between the retail and the OG, right? That's the the delta there. The time pain the OGs can deal with. The time pain a lot of people just simply can't. Both of those events shake out all the remaining sellers. Now that doesn't mean there aren't sellers.
Literally every price is a buyer and a sell. So there's always sellers, always buyers, but it clears out all the people who don't really want to see the end of the movie. And now you're left with a picture of there's always residual sell side like just that's part of what prices are. The question is when does the demand start to kick back in? So the smart money is now like I'm going to slowly accumulate this thing. That doesn't mean that the bottom gets put in. There's no price we have to hit.
There's no maximum level. There's no thing that has to happen. I believe that these capitulation events are very good signs that we are in deep late stage.
And the way I I structure it out, too many people get hooked on this idea of buying the bottom. Don't worry about buying the bottom. The best way to deal with this, and I actually ran a study um last week. Yeah. At the end of last week, I titled the piece the perfect buy. I basically analyzed and said, "Look, there's this idea of I'm going to lump sum the bottom, right? We hit some maximum low level and over the next seven days, I just plow my entire investment in." Um, the other way you can do it is just get to a slightly less extreme level, which just for context here is about 60k, right? 200 week moving average. It's called a Q I call the Q10 event. Um, 10% of all days have been lower, right? We're in the bottom 10th of the cycle. Do you regret buying in the bottom tenth of any cycle? No.
Can How long are we down here for? 10% of all days. So, you know, do you It's It's going to take time. What's the delta between dollar cost averaging and I tried to work out what's like the optimum time? Because if you dollar cost average every day, naturally your discount to alltime high disappears as you buy during the bull. But let's just imagine that you want to lump some. Is there that much of a difference? like trying and the mental anguish by the way the mental anguish of trying to time the bottom and every relief rally you're worried [ __ ] did I just miss it should I lump some now did I and like you end up making mistakes because you're trying to do something that is impractical if you just go to a level that is you know not quite the bottom but it's like in the bottom zone if you do a DCA campaign for like five six months your cost base is like 10% different to if you tried to lump sum the bottom right without all the mental stress and the mental language. You just run a six-month DCA campaign and just like let it run and you end up getting a costbased across all the previous bears that is as good.
It is as good. Now, if you start buying earlier in the bear, like the 80k level, and you're doing like an even DCA through that, yeah, your cost basis isn't quite as good, right? It's never going to be quite as good. The best possible strategy is buying the pico bottom. Really hard to do, really stressful, really not good for your mental health. So just like zooming out like I've been saying for very simple just buy the bottom fifth right which is below 68k 70k 68 that's the bottom fifth of the cycle below 60k is the bottom 10th it just it's it's just beautiful what are you doing like don't don't stress out about trying to pick pico bottoms we don't have to get to 55 my current thesis is that like fundamentally speaking the realized price is at 54k we do belong above that now the market doesn't give a rat's ass what where we belong based on my opinion doesn't care less. There's no reason we have to stay above 54K.
But in my view, we don't belong below 54K. That is like fundamental. Uh we're just out of bounds. We're out of bounds.
And the lower it goes below there, it's just like just just don't even think about it. Just buy the thing. So I I just try to simplify this stuff. I think people get try to get too cute. Um they try to think they can trade this thing.
There's just no value in doing that.
Just DCA, the bottom fifth, the bottom 10th, and just sit tight, right? stay humble stack sats has just never applied more than these kind of events.
>> What's so comical to me right now is the way that your like line of reasoning there is so much more sophisticated than the average crypto person I see out on timeline right now currently like locked into the narrative that the four-year cycle is going to play out and we're going to see a bottom at like October >> 6th of October at at um 6 pm at UTC. I measured this. [laughter] >> Yeah. It's it's so funny because like there's a high like very convicted people out there in the crypto space who are more pissed off and more disjointed than ever and they are like just locked in that this is going to happen where the more sophisticated market actors right now are seeing this is like okay who knows what's going to happen in the short term here but from like a probabilistic perspective like I'm I'm not buying the top I'm not buying anywhere near the top. I might not be buying the bottom but like it's already down 50%. like it just is so clearly like a pretty decent entry and there's still this massive amount of retail out there that is like locked into this idea that the four-year cycle is really deeply true and has to have the exact amount of time duration even though we're already at massive discounts. I I've had a few of these bookmarked because I think they're comical where I saw somebody recently saying like my formula is I only buy Bitcoin after it's fallen off 60%. And then maybe like if it's like 70 or 80% if like things are bad. I'm like that little backststepping you just did there like your your your idea for when you're going to buy is going to keep getting pushed off because you're more fearful and you can't think as clearly. whereas like actual intelligent money in this market is like incrementally increasing their position as price gets down to these ranges. It's just hilarious the divergence between those groups right now. C >> can we talk a little bit? You guys had this part that was like confident and sweaty and it was this idea that you're like okay well maybe I'll let I'll let you guys walk through that maybe but basically the culmination of it was 2026 is the year of confident bears. Can one of you walk through that a a little bit and just kind of what that means? Does that just mean the bears are dancing right now and they're like they're extra sure that we're going to get right? Does that mean something else? Can can you guys unpack that a little bit?
>> Yeah, I mean from my perspective uh I like I mean the thing about cycle extremes I received no calls from normies muggles this year about this whole cycle about buying Bitcoin. What I did get is in July August period we've hit um of last year we've hit 100k we've had the tariff tantrum in April and then we've rallied back to 110 and I received calls from 12 people in two weeks who are long-term tenure Bitcoiners asking me where's the best place to get a Bitcoin back loan to buy more Bitcoin at 110K in July August and my advice was I I don't know I don't that's not my thing but uh I would strongly recommend that 30K was the right place to do that. Not 110, right? That's the reason you feel so confident to take out a loan at 110K is because you have 2 and a half years worth of green candles behind you. Um, folks often ask me like at 80K recently on that bare market rally. Folks like, are you getting more bullish? And my view is, no, I get less bullish the higher the price goes because we've left the Q20 Q10 range and we're up now like Q33 and getting towards resistance. And my viewers, it's very unlikely we get through 80K on the first time. Like, it's just very unlikely we break through that level, blah blah blah. It's interesting how people's emotion swings when it feels safe to do something. Journalists write bearish headlines about Bitcoin when we're down 50% and have been for 6 months because it doesn't feel safe to do it any other time. It now feels like it's finally dead and they're going to be proved correct. That's why the IMF always bottom ticks because they feel safe to release the report that they've been writing for the last four and a half years, right? It finally feels like the right time they're not going to look like idiots and end up looking like idiots anyway. So, human psychology tends to move around the extremes. We look for the confirmation bias. We try to convince ourselves why something must happen. And in the current setup, the truth is, and this is why I like to look at metrics like funding rates and increasing like options data. There's a ton of people out there who didn't believe it was a bear until we got to 60K in February and they were longing every dip. Positive funding rates, right? People just net net buying on leverage and getting liquidated, liquidated, liquidated. We then had that first little rally and then we got down to 65k right before the war in Iran kicked off. And the moment we that the war in Iran kicked off, they're like, "All right, here we go. I've been longing this thing the whole way down.
I've blown up six accounts, but now I mean Trump's taken this thing to zero.
Let's go. They go max short and they short the thing all the way up to 80K.
Like perfectly wrong. Perfectly wrong because it felt safe to short at 65K when the Iran war kicked off because of course Bitcoin's going to die. This is the whole idea of like getting confident at the wrong time. So we are going to see confidence build that the like you know whether it's a fouryear cycle whatever it is people get super confident in something that is why markets tend to go the other direction when everyone is super confident that something must happen it goes the other direction because it's going to catch a lot of people off site and if you imagine just just allow yourself to think about it as a thought experiment how many charts have you seen of people drawing an arrow down to 45k hitting it on October 6 at 6 p.m. UTC just hundreds and hundreds and hundreds and hundreds of charts.
What are those people going to do? Just allow yourself a moment. Just imagine that we bottom right here like in at the end of July we're at 95K. What do you think those people are going to do?
They're going to be sweating going. It's just another bare market rally, bro.
That's what the disbelief rally is. The whole idea of the That's by the way, it's not a prediction. That's just a thought experiment. The idea of a disbelief rally is people who were so confident that it must go lower realize it takes them time to realize. Same way it takes you time to accept that the bull is over. It takes people time to realize that the bear is over and they actually do dumb [ __ ] because they don't realize and they aren't willing to accept that their thesis might have broken. So it's this confidence thing at extremes. It's very human nature and it is why markets tend to bottom on fear.
Absolute fear. It's also why undercuts like the fact that we undercut the 60k level is really good. You actually want price to go lower because it gets so many people bared up that then the institutions and the guys who know how to run markets, right, people who actually understand how these things work, they step in at those periods of time because they understand that you've got enough sellers to satisfy your bids and then you can send the market higher.
>> Okay. So, super interesting there. I think at the end of the day right now what's the I guess from just like a personal perspective or caring about my you know my fellow plebs out there what I the sad thing is guys is that like right now this time when and this is uh me me this is just like gut feeling because I I started to have the same you know my my beautiful amazing wife who I love so much starts to say did we just round trip like did we just round trip from the 2021 alltime highs and I'm like that's my signal to Okay.
Uh that like that's, you know, and she's she's a hardcore holder as well, obviously. But when she starts getting a little bit antsy, I'm usually like like that. That's my that's my sentiment analysis there. But also like the sad thing is that a lot of people are right now when they should be buying, they won't >> and they'll ignore it and they'll ignore it and they'll ignore it. You know, again, the the whole the cycles of disbel like it's a suckers rally, it's a suckers rally, it's a sucker rally. Oh [ __ ] And then it, you know, we we rinse and repeat all over again. So I I mean I'm curious like JMA, you've established that like look from an onchain perspective, we're looking at a pretty juicy time right now. Yeah, you might not be at the exact bottom, but if you're buying at what are we at right this second as we record this? Uh 61,646 bucks. This feel like just intuitively this just feels like a really good level. This feels like it it gets to the point where it's like I didn't think we'd get down here again, >> which probably means this is a pretty decent level.
Do you are you looking for anything? And Michael, I'm curious to your perspective if there's things that you are going to be able to kind of see flip like indicators sort of flip, but check we can start with you. Are you looking for anything that's going to signal, okay, and now we go higher? Or has that sort of already been hit and now it's like, okay, we'll chop. We're going to chop solidate for a while, but you're not getting maybe you get a couple points.
Maybe you get a couple points on this, but you're not going to get significantly more than that. Do you know what I mean? Like, or are you looking for something else to flip that?
>> No, no, no. The way I think about it is in terms of like momentum. Uh, I think the downside momentum has slowed meaningfully. So, for example, the first sell off 126 down to 80. Big move. Then we went from 100, we rallied a bit, 100 all the way down to 60. These are $40,000 moves, right? We then went up to 80 and back to 60, you know, like the downside momentum has run out of gas.
Even if we go down to the realized price at 54, that then that's kind of the boundary where I think it's just like that guy's just out of bounds. Um uh for context there 54k and I'm using my mean reversion index to get these quantiles you know power law is different to all these other stuff but um that's a Q7 event 7% of all days have been lower now where did all the previous bears bottom Q5 Q6 Q8 Q4 Q6 like you know for round numbers Q5K Q5 it's the same thing you know what I mean like there's no perfect numbers in any markets right it's a random walk but we're in that territory of it just doesn't matter, you know, it just doesn't matter. So, I think the downside momentum has slowed meaningfully. Um, honestly, a lot of stuff doesn't actually like flip over and say bull is in play. And this I've said this before, the worst day of the bear is quite literally the first day of the bull. It feels like the worst day of the bear at the time, but it is in fact the first day of the bull. But usually, go back to 2022. FTX people were saying like dead for a decade. That was literally the narrative. It was dead for a decade. We will not recover from this.
It is over. That was the first day of the bull market. You know, like it it it takes time for the ashes to kind of settle and all the dust to settle and people to come around to it. Um but in my view, price capitulation, we're in the process of doing our time paying capitulation. Again, the lower it goes, the more you get to these discounted levels. Like there is no one left except us. Who do you want to be in the trenches with? Like seriously ask yourself who do you want to be in the trenches with and that moment will be the time when the most amount of people go I don't want to own this thing anymore and all the hodlers go I do thank you very very much right and then you just the whole point I love the folks who are like but bro we're at the same price as 2021 and I'm like okay I got a pro tip for you wait for it don't buy the top and then the top like try not buying the top because then it's actually like still really good you know like there's a lot of folks who survive buy the bear and then if you buy the bear, you know it's cyclical. Stop buying the top when it feels safe to do so and then complaining when your performance is bad. Don't blame Mr. Market. Blame your own decisions because that's all you can control. That bit is so interesting to me because like we we're all like really emotional animals. like despite like all the the Bitcoiner disposition to be a little bit autistic and go deep into numbers and like have all this logic like we are all predisposed to be very sensitive to our emotions even if you're not in tune with them and that's been one of the more uh interesting optimistic things about all this is like recognizing that you're not just forming your opinion in an isolated vacuum of emotion like a lack of emotionality there's like every podcast you go into every time you scroll Twitter or wherever else everybody body around you is in a specific mood and it's disproportionately more easy to adapt the same mood as other people. So just like people have been asking me like all right how do I trade with your sentiment data like is there like signals that are go off and like that's not the best takeaway in my opinion. The better takeaway is like looking what current emotional regime we're under because you're going to learn a little bit about predispositions and narratives that people are more likely to tell when you're under the influence of different emotions. You're angry you're going to desperately be looking for villains.
Michael Sailor selling 32 bitcoins is going to seem like the like just the worst thing out possible and under optimistic regimes you're going to look at any narrative like it's going to be a game changer for Bitcoin and we're going parabolic immediately. Like just being able to see that for me was really uh helpful. Like visualizing those things and being able to better fade whatever kind of narrative that you're getting wrapped in, whatever crazy emotion you're currently being controlled in.
And like currently, like the more I look at it, the more like bullish I grow about the current state of things right now, you could have crazy wild price movements downward still for various different news items that drop or whatever. But like um to James' point about the time paying capitulation thing, like excitement was a mood that I looked at quite a bit because it's very interesting and it typically spikes along with higher volume. Like we're having less of that over time. like we did see this big drop but like people are just not as involved and like that's exactly the kind of thing you would see uh in periods of time like this where people are just checked out like they are not as interested as they once were.
And the last thing I'll say here is like in addition to mood something else that's been really interesting about language and specifically is like uh you can look at things people are talking about. So one thing I visualized was like laying every single price that people have talked about over time in Bitcoin over like two years just on a heat maps. You can see like density of mentions over time. Kind of an interesting thing to just visualize because like the things we talk about uh give a lot of cues to where people are thinking and really interestingly right now like people are talking about price levels 50k, 40k, 30k at a rate they just like have not previously. there is a focus on the very distinctive levels of those numbers and there like is much more talking about them right now. This is precisely the thing you disproportionately see when people are like confident that those levels are going to be hit. It's just really interesting. It's like all these different things aren't going to tell you exactly what's going to happen tomorrow. But in combination, it like gives you a lot of independent signals that you can kind of like form together and be like, "Okay, well, I'm relatively confident it's a pretty damn good buy time to buy right now. just might like who knows what happens in the very short term, you know.
>> Oh, I absolutely this why I I appreciate both you guys. When I saw that you came out with this together, I was just I was pretty stoked about it. I I like, you know, no secret. I enjoy you both very much. Uh respect you both very much. And I think this is just it was I mean extremely timely also, right? Because I mean to the title of your piece, it feels like peak apathy. like you guys very much put a name to something that I think every Bitcoiner has been feeling and it's and it's frustrating too for people. You get that cuz it's like why don't people care? It's like guys we've got incorruptible perfectly finite sound money that's uncensorable. You can send anywhere in the world. No government can [ __ ] you. Like why don't you care about this? And then we get at each other's throats and invent problems and you know as you guys said you know invent villains and whatever else. I'm not saying there aren't real villains out there, guys. Uh, you know, please clip this out of context. Feel free to use it. But like we we invent these problems and then it's amazing how many of those pro those problems just sort of go away >> when we pump.
>> It's I mean it's like and check this is something you hit on all the time. And Michael, I think your analysis is like going to be just as we go forward. But I'm super excited just to follow it more because it's like God, we like we are such complex creatures, but we're also so simple and we kind of just do the same thing over and over again. And and I guess how like as an individual cuz there's like the there's the herd, right? And the herd tends to just kind of do this the same things, right? How as an individual do you guys personally try to extricate yourself from that and be able to actually move outside of that and and observe it and say look I'm not I'm not going to follow that herd. I'm going to look at the counter signal here. I'm going to you know I'm going to see where the you know skate to where the puck is going instead of wherever you know like h how does how does one do that? because I think a lot of people uh you know myself included at times I've gotten a lot better at it the longer I've been in Bitcoin I found myself getting a lot better at it but it's not easy so maybe for somebody who's like got into Bitcoin just recent maybe they bought in at 126K they're really feeling the pain right now is what would you say to them about trying to extricate yourself from that heard sentiment mentality that's so easy to get sucked into >> well from my perspective first things first ex is going to be the most beautifully counterproductive thing in your full stop. It will be absolutely your worst enemy for doing this because it is designed to make you feel a specific way and the crowd is generating that signal. Uh so that's the first one.
I forget I think it was annoyance Michael was the chart but um there's a chart that Michael has that shows like where people start getting angry at Mr. Market and it clearly went into I'm angry territory the moment. There's a metric that I use and most people should be aware of. It's called MVRV ratio. It basically looks the higher it is, the more unrealized profit people are in, the better they feel. The lower it is below one, the more unrealized loss people feel. Now, I track it versus its one-year moving average. And the reason why is that we human beings are short-term memory people, right? We have a, you know, I use the example of the Mount Gox guys. They bought their coins at like 200 bucks, 50 bucks, thousand, like not even a thousand bucks. They got them back at 68,000 in 2024 and then we immediately went to 49K. How do you reckon they felt? Oh no, I'm only up 65,000% now. What a shame. No, they're like, "Dude, I could have sold this 60 68 and I only got 50." Right? Your immediacy doesn't matter what your history is. So when you track MVRV, people's unrealized profit and loss, how good we feel versus its one-year moving average, how our baseline emotion is, the moment MVRV slices, and it usually does this at the start of bears. when it's sliced down below its one-year moving average, the current mood is worse than we want to feel or we did feel a year ago, Michael's um anger chart or annoyance chart suddenly goes into the red and it has stayed there ever since. And you go back and look at previous bears, the moment that MV breaks above its one-year moving average, we're feeling just a little bit at the margin better than we have over the last year. Annoyance drops off and suddenly people feel much better again.
So it's just that classic example of like doing the opposite of the herd. And that's why I love the data. So getting back to the practical side of things, you don't need to become an onchain analyst. But what you can use these tools to do, don't think about them as trading signals. Honestly, the the sooner you can let go of this idea that trading is a good thing to do, the better. I think that like there is a 0.01% of the population who is geared towards being a trader. It is a really hard job. Um I use my own example. I went through a process when I was learning about markets in 2018 19 of trying to be a trader, right? And I could do it. I was decent enough at it, but I hated it. I hated every moment of it. Um, and I knew I the the thing that kind of got me to realize that I wasn't a trader. You must have the discipline to be journaling your trades and like writing down everything you did, reflecting on stop- losses and what you did right and all the rest of it. I made like 20 different iterations of my spreadsheet journal with all the bells and whistles and I never filled in a damn line of it, right? Or I filled in one and I gave up. That's how I knew I just I don't care for this. It's so timeconuming. So stop trying to trade off this stuff. Instead use what I use onchain data for is to help me just understand the big picture. Let me understand the sentiment shift. Let me understand are people feeling good, bad, indifferent? How is that changing? Are we seeing capitulation events? You're just trying to understand the why. Don't get caught up in the what will happen, the prediction thing. It's useless. No one can predict the future. But we can do is look for these like zones of opportunity when the the Twitter is telling you it's going to zero. And it's probably not. But if you spend too much time on Twitter, you're going to think it's going to zero. You spend a bit of time with the data, you'll be like, when have we also seen this it's going to zero mood? Ah, strange. If I had bought back then, I'd be not complaining about the 2021 top. Funny that. So, use it as information, not as a signal, not as a predictive indicator. None of that is worth anything because that's impossible. Peel it back and say, what is the mood? What is the overall setup?
Are we in a d-risk Bitcoin environment or a high-risisk Bitcoin environment?
The default Twitter answer is at 110K in August, now is the right time to take out a led loan.
No, no, opposite. Flip it around. Go the other direction. And I'm not saying take out leverage at the bottom, but the right time to take out leverage is not the top, you know. So, flip it around.
Use data as information. Drop the predictive stuff and delete X off your phone. You'll you'll you'll thank yourself for it.
This may be a weird analogy, but something I've been thinking about a great deal recently is like a principle that people who meditate a lot think about is like watching your thoughts.
like you try to stay present and rather than like try to clear your mind completely, you just try to recognize that things are happening. And that's one of the frames that's been interesting to me here is like watching when moods change because like a slight little bit of anger makes you predisposed to something, but like you're never going to be completely placid. You're never going to have no emotions, but just getting slightly better at recognizing when the market is underneath a certain influence of a certain emotion and you're likely to feel that too is just really reassuring.
and a decent way to keep yourself a little bit more level-headed, I think.
So, to have that kind of um perspective when things are getting crazy, euphoric, angry, whatever the different mood is to just like check yourself and check that like you maybe shouldn't be being consumed by whatever the whims are of the market today is just a really useful thing to keep top of mind in my opinion.
>> A amen to both of that uh both those sentiments and I I really appreciate you guys. I appreciate you coming on here.
Checkmate, you're already living in the future. Um, Bitcoin price is somehow the same for you even though you're in the future. I don't know how that works.
Time travel, man. Uh, >> because Australians have no money to buy this damn thing. [laughter] >> They keep taxing us.
>> Oh, boy. Uh, there you go. Before we wrap up, maybe just uh in a word for anybody who made it to the the end of this, I appreciate you. Thank you to those who tuned in on Noster. Uh, are you guys feeling bullish right now? just brought just just gut gut vibe because I'm now granted I'm not the best indicator on this because I'm always and Michael may have other data on me that says I'm not always feeling bullish. I can't say >> your chart's horrendous. I've seen it.
>> Oh jeez. Oh jeez. But no, I I'm I'm feeling really bullish. I'm feeling really good about this because again I'm at a place where it's like look I know that I kick myself for not going harder in the 2022 bear and I went pretty hard like I went pretty freaking hard but as American says like you're not stacking hard enough like you you and you know it only in retrospect and that's my whole thing is like you don't want to be kicking yourself future you is going to kick your past you in the pants if you're not stacking when you you kind of deep in your gut know you should be. I think that's the thing that pain you're feeling that like that that little bit of nauseousness where you're like, "Oh, maybe the bears were right." That's actually your signal that's like >> do it like stack harder. Start buying and your stomach is turning.
>> Oh, if your stomach is churning when you're buying. Yeah. And if you're just like looking at it being like, "Oh my god, this is like a it's a terrible mistake." And then that is usually and it goes lower and you're like, "Oh, what am I doing? This is why DCA is powerful, right? You remove the emotion, right?
But also, if you really want to like treat yourself, like go and experience the emotion, right? Buy a fat slug and be like, "Right, why knuckle it?" Yeah, exactly. Get emotion. Um, so so yeah, I think uh from that perspect Yes, I am bullish. Like, uh, from my perspective, this is the most derisked that Bitcoin has been since the 2022 bottom, right?
That doesn't mean we don't go lower. It also doesn't necessarily mean that we have to go tremendously lower. And if you can just manage to remove your emotions, survive, right? Big part of bare markets is just surviving. Um, from my perspective, the way I treat it, I think this is the most discounted level I've seen Bitcoin since the 22 bare market. My plan is to buy like a madman, right? Buy like an absolute madman because the moment we break above 80K, I stop. That's the end of my DCA campaign, right? That's the way I'm treating this because once we go above 80K, we are back off into the races. And honestly, I've I've been in the market long enough now where I've kind of learned my lesson. I actually don't want to buy all the time because I've done that. I've done that for many many years. My approach is I'm going to buy as much as I possibly can now. And then I've just like I've spoken about this before. Um I think a lot of Bitcoiners have struggled this cycle because they only own Bitcoin. And by the way, that's perfectly fine. But it means you are 100% geared to this asset to its ups and its downs. Owning something else in your portfolio is perfectly fine. Perfectly fine. And as you get older and you got dependence and life changes, you just have to own other stuff. It's just reality. So for me, I plan to go like an absolute madman now. And then I buy other stuff later on. I can refocus so that then when gold is ripping and all the Bitcoiners like, "Bro, why gold?"
And I'm like, "Yeah, gold's great, man."
Like I've been buying gold like crazy in 2024 because Bitcoin was already above the level where I was like, you know, I think it's it's later, right? It's later in the piece. I'm not desperate to buy Bitcoin. Now I'm like doing calculations to work out my monthly budget as a business to be like, can we squirrel away another couple of grand here or there? Like do we can we put off this tax payment? Like what else can we do?
So yes, I'm extremely bullish right now.
Um, but my plan is to go ham when it's cheap because I'd plan to not go ham when it's no longer cheap.
>> Yeah, I echo all of those things. The one thing I think I can add with a unique like narrative sentiment lens here is that like we >> completely ignore all the positive narratives when we're angry, fearful, or any of the spectrum of negative emotions. I've looked at a handful of these narratives, um, like the strategic Bitcoin reserve being one of them, and just like look at the rate at which it was mentioned. We were really optimistic. No one gives a [ __ ] right now. No one's talking about it. It's just like flatlined and down, which is interesting because like Bessant was out there just recently talking about this in a very like practical way. Like things are clearly moving forward with it. Who knows what happens? There's all sorts of wildness that happens in the government that's totally outside of anybody's control, but like no one cares right now, which is really interesting.
Another one of these things being like the Clarity Act. Um like there's a lot of things in there that I'm not necessarily like a fan of. Like but there's still a lot of potential reasons. This could be a very bullish narrative and no one cares right now. We all want to be angry because our moods are so bad. People are desperately looking for people to blame rather than heroes. Like you want a villain, you don't want a hero when people are angry.
The inverse is true when people are really optimistic. But like man, like now is not the time to like like check out and not stack harder. It's like it double down, man. You're you're here. If you're listening to this, you're clearly interested in it. Like double down. I wish I would have harder back in 2022 as well. So, I'm definitely not chilling at the present moment.
>> Well, yeah. A amen to all that again.
You know, American Hodal Huddle said it best. You're not stacking hard enough.
Uh and now is a good time for it. Uh, thank you guys for sharing your time.
Appreciate you both so much. People should go check out this piece. Check on chain. Uh, great great newsletter.
People should go give it a give it a shot. Where can people find you guys?
Checkmate, you want to go first? Just send send them where you want to send them.
>> Yeah, you find us over at checkonchain.com. Uh, you've got a newsletter in our charting website, but make sure you check out Michael's newsletter as well where he's sharing all the stuff. So, I'll pass over to you, Michael.
>> Yeah. No, best place to find me is on X.
And I also recently started writing on Substack as well where I have like a full archive of stuff, lots of different visualizations for things I've been talking about and I've been writing them more frequently too. So deep into the weeds. So I'd highly recommend that if you enjoyed any of this >> and as well even if you can't spell it just like a quick >> There you go. There it is.
>> Beautiful. Um, I'm super glad that you're writing on Substack because like I've found and again I'm not paid by Substack, but um, Substack is it's where I'm allocating more of my time now because of the X problem. And I find that like >> getting long form stuff, one thing that's driven me absolutely mad this cycle. And honestly, why I spend less and less time on X is people listen to like sound bites on podcast like, "Oh, but bro, you said this." I was like, "Yeah, did you miss the like half hour of nuance discussions?" Like yeah there's like multiple layers of thought like if you take a 5 minute soundbite for a podcast you are not going to get the depth of thought living in the Tik Tok world what I like about substack is allows you to actually explore ideas over time because ideas change new information comes in so like actually allowing yourself to spend more time with longer form content I think is actually quite refreshing um reading a book that's a good example but like getting out of this Tik Tok economy I think is going to be really important moving forward because like how much of it is AI generated anyway. So if you're feeling real down in the dumps, spend a bit of time working out how much of it is actually your algorithm and your time on these Tik Toks platforms.
Start thinking about maybe going a bit more longer form, you know, because I think nuance is good for the mind, right? Michael and I play chess. It's good for the mind. do something that just like stretches your mind in a way that is different to the Twitter artsy just trying to find the latest headline as to why it's all bearish or it's all bullish. At the end of the day, if you follow up any of these predictions, they never happen. So, it's like, you know, thousands and thousands and thousands of TA charts that no one ever comes back and looks at. No one cares, right? It feels good in the moment, but like it's it's a good mental detox.
>> Amen to that. Maybe listen to a nice audio book like Blood of the Bourgeois or read a nice book. You know what I mean? Uh, no. Amen to that. People, uh, the short form does rot your brain a little bit. The infinite scroll also is, I think, very detrimental to that. Don't forget to touch grass, too. Like, don't forget to you can you can actually you can be outside without your phone. It's this crazy thing. Like, and you can you can just you can just be there. It's wild, man. It's wild. It's a beautiful thing. It's a beautiful thing. With that, guys, thank you so much.
Appreciate you guys sharing your time.
This was super fascinating. Uh people should go follow you both, follow what you're doing, and yeah, uh we're we're we're bullish here. So, appreciate you guys very much. We'll have to do it again. We'll have to do this again once we get bullish again. Once once everything flips, right? That's going to be a nice little comparison. I love it.
Okay, guys.
>> Humble stack hats.
>> There we go. There we go.
All right.
And that's a wrap [music] on this Bitcoin Talk episode of the Bitcoin Podcast. Remember to subscribe to this podcast wherever you're watching or listening and share it with your friends, family, and strangers on [music] the internet. Find me on Nostaster at primal.net/walker and this podcast at primal.net/titcoin.
On X, YouTube, [music] and Rumble, just search America. And find this podcast on X and Instagram at titcoinodcast.
Head to the show notes to grab sponsor links. Head to substack.com/walkeramea [music] to get episodes emailed to you and head to bitcoinodcast.net [music] for everything else. Bitcoin is scarce, but podcasts are abundant. So, thank you for [music] spending your scarce time listening to the Bitcoin podcast. Until next time, stay free.
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