Bitcoin: The Bull and The Bear

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IN THIS PUBLICATION:

• Since the bear market began late last year, we moved from +90% of Bitcoin supply in profit to just over 60%.
• Bear arguments for Bitcoin include weak new addresses momentum and reduced miners’ profitability.
• Bull arguments include increased buying power within exchanges and record-high dominance of long-term holders.

Still Room for Downside

• Theoretically, Q4 is a strong quarter in terms of seasonality. In practice though, the more we’ve made this argument in the past, the worse Bitcoin’s performance has been. That’s why Tim asked me to stop writing about seasonality… he calls it bad karma, but how could I ever resist an opportunity to make him suffer a tiny bit?

• As we know all too well, it’s been a painful year for the entire crypto space, with total crypto market cap falling from $3 trillion in November to $1 trillion currently.
• We continue to stand by what we said in our June Update: “the current bear market is not simply a crypto-specific event, but a broader financial market’s one that is being compounded by idiosyncratic issues within DeFi”.
• In fact, BTC’s performance, when compared with some of the most volatile names in the Tech space, helps contextualize how, the main driver of this broad-based correction, has not been idiosyncratic to crypto.

• If historical bear markets are of any guidance, most (but not all) of the losses should be behind us. [Tim’s note: there he goes again, living in the rearview…]