Bitcoin Enters a Liquidity Void — Right as Its Largest Buyer Begins Liquidating

Actionable Market Insights

Why this report matters

We had no hesitation calling this correction (here), and we’ll be ready to step in when the time is right, but that moment isn’t today, and likely not tomorrow. While the risk of a deeper-than-expected bear market is high, we will continue to guide you with precise, data-driven analysis rather than recycled narratives. Several important catalysts lie ahead, and even if they don’t immediately move Bitcoin, they will eventually create volatility, which always brings opportunity for those who understand it.

The reality is that only a small fraction of market participants conduct real analysis (or have access to it); most repeat whatever model or meme is trending, which is how ideas like stock-to-flow or obscure liquidity metrics gained undeserved influence. Contrary to a suddenly popular claim, it was not long-term OG holders who triggered this downturn. A different cohort was responsible, and we identified both the group and the reasons for their selling early, which is why our outlook turned materially more bearish in late October.

Main argument

We anticipated that Bitcoin would fall toward $100,000 (here), break below $98,000, and likely test the $93,000 zone, and it has now done all of that. As we pointed out in our November 7 report “Bitcoin: Smart Money Sold the Top - Did You? What Might Happen Next?”, the risks at this stage are significant, and while this is far from the end of Bitcoin, it’s crucial to understand how the underlying balance of the market has shifted.

Bitcoin YtD Flows (LHS, $ bn) vs. Bitcoin (RHS)