CYBER MONDAY
Winter is coming, hope you've your winter tires ready.
Hi,🙋
Welcome to the weekly CryptoFolks Newsletter. However, our launch procedures 🛫 require us to inform you not to consider this article as investment advice, as it represents solely our personal opinion. Always remember to manage your portfolios independently.💁♂️
Full? Rested? Bored?
Because during this Thanksgiving weekend I was really bored 😅. From Friday to Sunday Bitcoin basically turned into a stablecoin (well, except for that quick pump and even quicker correction on Black Friday). But what happened to Bitcoin a few minutes after midnight truly deserves to be called Cyber Monday ⚡️.
Apparently on this special Monday Americans spent around $14B on discounted shopping, but that’s nothing, because NO ONE was willing to buy even a single dip on BTC, while the chart was smashing through support levels. What’s more, around $140B in long liquidations evaporated from the market — if you contributed to that, sadge for you 🥲. It was a true illiquid Sunday, probably the biggest one in a long time.
Within just two hours Bitcoin dropped from 91k to 86k, losing nearly 5%. Only then did the bargain hunters wake up, hoping to feast on a dip as juicy as a Thanksgiving turkey 🦃 — according to them, another “super opportunity” to load their moon bag… but I’ll come back to that.
As I’m writing this towards the end of this digital Monday, BTC is bouncing around 86k, which isn’t that bad considering today’s low of ~83,700 — over 8% down.
So… do we open a long expecting a rebound, or go all-in on further downside? 🤔
This is what I’ll focus on now, because we’ve got two options: a rebound, or an extended Cyber Monday. Both scenarios are possible and both have similar probability — and to explain why, let’s look at how things looked back in the day (the good old times when alts pumped 30× in a week 😌).
But before we dive into sweet nostalgia, we need to return to reality and answer the question: Where the hell are we?
Well, for some it’s a grey reality, for others not so much — I’m writing this a day later (December 2), as Bitcoin rallies from 83k to 92k… and my short is currently at -48% 🤡 — it is what it is. Hopefully you made money on the long today 😉
Alright, so where are we? We’re exactly 57 days past the end of the calendar bull market and around -26% from the ATH, which was once again hit precisely on its final day. Looking at this, you could say the bear market has already begun — and that’s also my view.
There are two possible exits from the situation we’re in — but both ultimately connect and lead to further downside:
Exit ALPHA – a rebound toward ~100k followed by a leg down.
Exit BRAVO – a leg down now, faster and stronger.
I’ll break down both. PS: there’s no back door 😉
ALPHA
Here’s the short version: after hitting ATH, Bitcoin drops (similar in size to the current move), then forms a dead cat bounce — a solid recovery that gives people hope it’s back in the game… and then it dumps again shortly after.
If you look at my simulated BTC chart, you’ll see the price rebounds to around 100k — not less than 100k, not more, just 100k.
Why exactly 100k? Because it’s a psychological barrier that the chart likely won’t break — the bull market is over. If it weren’t, I’d be calling for a supercycle and another bear market in 10 years 😄.
On top of that, liquidity for further upside simply runs out. Pushing BTC from 80k to 100k in a bear market still requires a lot of capital. Personally, I don’t think ending QT, rate cuts, or even appointing a new Fed chair would change anything — but more on that later. For now: on to BRAVO.
BRAVO
Here the drops are much faster and stronger — in other words, no room for meaningful recovery. That marked rectangle is where we are right now, and if today’s rally turns out to be a fakeout, we’re heading into another liquidation cascade 💀.
You can see I marked a support line at previous resistance from the end of the bull market — not by accident. In both ALPHA and BRAVO we end up there.
However, with BRAVO we get there much faster — that’s around 73k, shown on the next chart.
Statistics
Now a bit of the queen of lies — statistics. Looking into the past and searching for ALFA and BRAVO from previous bull runs, we get that in the last 3 cycles only 1 time the BRAVO scenario (the strong drop without a retrace) played out. That was in the 2014 bull run. Meanwhile, in 2018 and 2021, large retraces and hopes for a comeback — ALFA — ruled.
At this point, one question must be asked: Is ⅔ of cases enough to assume it’ll be the same now and go all-in on longs? In other words: Will ALFA play out again? Nobody knows. But one thing is certain — it’s not worth risking the capital earned over 3 years in hopes of a Bitcoin supercycle and a new ATH by the end of this year — exactly what “experts” (Tom Lee) and a large part of Twitter claim — since all roads currently lead to the same place: inevitable declines 📉.
Narratives
Look at the screenshot from the end of the bull run and admit that back then many different narratives dominated — some saying the bull run was ending and a downtrend was starting, others about supercycles and a 250k Bitcoin. Opinions were everywhere.
But what happened right after the ATH and the start of the drop?
Did anyone talk about the beginning of a bear market?
Did anyone say that maybe it’s time to sell?
Of course not! From that moment people began marking lower and lower local bottoms and treating them as dips before the next pump.
There were tons of these “last” bottoms — first at 115k, then 110k, then 100k, 90k, and finally 80k. Nobody cared that cyclicality might have worked since the ATH broke on October 6th and we’ve had only declines since then. Everyone thought there was still time and the price would bounce soon — “Trust me bro” 😅
This is the classic start of every bear market — a period when everyone is mentally in the Lambo showroom choosing colors for profits they will never realize. Almost every bear market begins in silence, when there are no narratives, and instead suckers keep naively buying each lower dip… until they wake up with their hand in the cookie jar.
It wasn’t different this time — only now people finally noticed their floor is burning and realized it might genuinely be a bear market 🔥.
But no, impossible, because “Bitcoin is getting up from its knees, coming back, new highs ahead, etc…” 🙄
The truth is that many people still fool themselves and hope everything will be fine, supported by the fact that the FED is ending QT — which in short means a massive amount of capital (from printers, of course 💸) will hit the market to “save” the U.S. from recession (which is inevitable — it’s only a matter of time; printing can only delay it and make the crash even bigger). This would pump overheated indices like SPX, NDX, RTY, and that would spill into BTC (because correlation + higher willingness to risk), with a new pro-crypto face replacing Jerome Powell (someone who will print dollars day and night), and Trump’s “you’ll be tired of winning” narrative.
Forgive me this sentence as long as the U.S. national debt 😅 — but I had to get it out.
What I meant is this: No matter how positive the news for crypto or traditional markets may be, recession is coming. Everything is at its peak — traditional indices, gold, silver, and Bitcoin. Yet many will buy into the narrative that everything will be fine, that the FED will save the economy by cutting rates and launching the second biggest money-printing program after COVID, that Bitcoin will make a new ATH because of it… and of course that “altcoin season is coming and fartcoin will do 1000x” 🚀🤡
In summary
The bear market is here, the bull run is over, and declines will come — sooner or later.
Matthew