What a weird cycle...
We started 2025 at $93k and here we are near the end of the year still at $93k. Q4 uncharacteristically in the red during the 4th year of the cycle. October underperformed and November was an absolute slap in the face. Very rude!
November's poor -17% performance is particularly alarming because Novembers of the 4th year tend to be the crux of that cycle. This bad price action could only be interpreted as "it's so over" within that context, so certainly the fear we are seeing rampaging the crypto arena isn't exactly unjustified.
Looking at the chart is a bleak affair.
It's a reminder of how big of a bet I made that this exact thing was not going to happen. Certainly that stings a bit but it's also a good lesson in trading. Locking in to the idea that Q4 was going to be amazing no matter what caused me to ignore all the warning signs being thrown at me. I think I'll avoid that going forward.
Thus far the current peak to trough spans a range from $126k to $81k. That's a -35.7% dip from the top. We crashed right into the middle of the liquidity void created (now filled) by the Trump pump during election season. We bounced there and then again at the top of the void, which I find interesting. It would seem that this range still has a massive amount of liquidity and buyers ready to ape in despite all the fear mongering we see in retail.
Current price point is in a very awkward position which is why I have no bets open today. We are trading at the MA(25)... which could signal a reversal and the inevitable breakout from this aggressive downtrend. However, we are still very much stuck in the downtrend with zero confirmation to suggest otherwise. This is a pretty great place for bears to reload on leverage and assume the downtrend will continue. Then again, it's pretty difficult to be a bear after bouncing on such a key support so convincingly.
It's also difficult to be bearish when this aggro downtrend falls into our key support range at the end of the month. Which line wins? The support or the downtrend? Considering we've already suffered the 36% dip from the top my analysis of this situation is that a newfound rally is inevitable unless the year-long bear market truly is setting up shop.
I see two possible outcomes here:
- This time is not different (bearish).
- All your models are destroyed (utter confusion).
The super awkward thing about this situation is that I told myself I wasn't going to be that guy that was like, "this time is different". The problem with that is all my models have already been destroyed... so this time actually is provably undeniably different at the present time; it's no longer speculation. This is a fun self-imposed pseudo paradox I've been having to deal with while navigating my trades recently.
Current events narrative hits retail.
The story being spun for why BTC has bounced at the obvious key support line is that hedge fund Vanguard has finally flipped the script and capitulated into allowing investors to participate in ETF trading. If I'm being honest this took way longer than expected, as Vanguard has been maintaining this steadfast position for many years now (even before the Blackrock ETF). The fact that they've changed their tune right at this crucial moment gives me pause. Is something going on in the background that we don't know about? Such things may be worth investigating further.
Ugly chart is ugly
Circling back to the chart I'd like to point out the bearish fanning on the moving averages. I was so sure that this wasn't going to happen because Bitcoin was in such a stable state. It's simply never occurred before. We have been in a crab market for the entire year after all. There are no death crosses left. Now that I think about it I'm expecting a bullish cup-and-handle pattern to reveal itself here. The only question is if we've already created the bottom of the parabolic cup or if we're going to experience a violent rejection very soon. Again, seeing as we are testing the downtrend right now it could easily go either way which is why I have no bets open.
When will I place a bet?
Confirmation that the downtrend is broken would be an okay start. Of course we'd have to wait for number to go up before making a bet that number will go up more, which is clearly not ideal. Then again the downtrend is going... down... pretty quickly, so perhaps if the next week is boring or down I can begin to reload the position.
Any price within the blue-band "liquidity void" is a nice place to start stacking up leverage. Support from $85k all the way down to $72k is massive and is already hinting at being the rock-bottom area. Even if the bear market is here I'm fairly convinced we aren't going below $58k in even the worst-case scenarios. Of course a Black Swan event can tank the market -50% in a single day like it did with Covid 2020, but that's just an even more massive opportunity to revenge trade double down and watch number skyrocket over the next 12 months.
Buy low sell high?
Another random thought that pops into my head revolves around taking a look at the most recent market participant additions. While the addition of Wall Street, hedge funds, banks, corporations, and even nation states certainly can't be a good thing for grassroots "freedom money"... it definitely can be a good thing for price stability.
For example, a hedge fund theoretically knows when to:
- take profits.
- buy the dip.
- keep a cool head.
- capitulate gracefully rather than "riding it to zero".
In essence a lot of the new money coming into this space knows when to buy low and sell high a lot better than common retail investors. In aggregate this should have a stabilizing effect on price. Spot never gets too low because there's always a buyer of last resort, and more importantly it never gets too high due to all those HODL never-sell-no-matter-what bros. If the price of BTC never gets too high then it's never bubbled. If it's never bubbled then bear markets are going to be extremely muted going forward, which is obviously the current fear that retail is having at this moment (a brutal bear market).
Extreme liquidity in both directions creates a lot of stability, and that stability in itself creates value for everyone. If everyone can see that number is just going up in a straight line with very little volatility this allows all market participants to enter and exit whenever they want for very little risk. Looking at the zoomed out chart I'd say this is exactly what's been happening thus far. The Blackrock ETF has been in operation for two years since $42k and since then we've been up or sideways the entire time. Of course 2 years isn't exactly enough time to confirm that determination, so perhaps this is all just cope! Who knows.
Conclusion
November 2025 was an abysmal month for our industry; not so much in terms of actual losses but rather the complete annihilation of where we thought we'd be by now. The bears are feeling very confident right now, but there's just as easily the chance that what we are seeing is just another perfectly normal dip before continuing higher. Any price point below $72k would cause me to severely question this narrative, but I don't think that will happen. The economy has been risk-off for so long it's difficult to remember what it's like when money is flying everywhere. Maybe the market cycle is going to win this one after all.