Bitcoin just dropped $2,400 in an hour, while alts are in free fall as usual. Here’s why:
1. Everything is dumping
- Stocks are dumping today - Precious metals are dumping - Only DXY is up
This is a sign that investors are exiting assets, including crypto, and moving into dollar.
2. Weak economic data
- US home sales fell -8.4% last month, the worst in almost 4 years. - Initial jobless claims came higher than expected, which means a weak labor market. - All this indicates a weakening economy, which increases the odds of recession.
3. Government shutdown
- The odds of another government shutdown this week have risen to 96% - This is bad for the economy and markets as liquidity dries up during shutdown.
My thoughts - The US economy is now facing some turbulence. - This is affecting the stock market and the crypto market too. - I think this could continue for some time until Trump announces another trade deal or some liquidity injection to boost the markets.
Every time the market drops, the same thing happens.
Bitcoin falls and people panic.
Suddenly everyone says: “Bitcoin is dead.” “It’s going to zero.” “It’s a scam.” “It has no value.”
But this isn’t new:
In 2013, they said it was dead. In 2015, they said it was over. In 2018, they said the bubble had popped forever. In 2022, they said crypto was finished.
And now they’re saying it again.
Every cycle, when the price crashes, people lose hope and forget that this has happened before.
When Bitcoin is going up, everyone calls it the future. When Bitcoin is going down, everyone calls it a scam.
Years later, when the price recovers, the same people who said “it’s going to zero” will start asking:
VERY IMPORTANT A lot of people seem uneasy right now because Bitcoin has dropped below Strategy’s average entry price. That average sits around $76,000. So I’m posting this while rubbing the sleep out of my eyes, hoping it can at least offer a bit of emotional support. What follows is highly logical. First of all, in moments like this, it’s worth thinking through the worst-case scenario. Once you genuinely accept the worst case, nothing worse can really happen. That alone helps neutralize the market’s biggest enemy: Impatience and it keeps panic at bay. So let’s look at a worstcase scenario that hasn’t actually happened yet. A chain reaction of treasury companies going bankrupt. Up to now, these companies have been accumulating Bitcoin under pressure, issuing new shares, often at a discount, to raise capital. Once the average purchase price drops by around 30%, insolvency risk starts to rise meaningfully. At that point, forced selling becomes unavoidable. That said, if a small treasury company fails, the market impact is limited. This is where Strategy matters as an indicator. It’s the world’s largest treasury company by far. Its average Bitcoin purchase price is around $76,000, and it holds roughly 713,500 BTC. A 30% drop from $76,000 puts us at about $53,000. I don’t think it gets anywhere near that level. Why? Because of a historical anomaly that has held throughout Bitcoin’s entire history, something I’ve mentioned many times. The high before a halving has never fallen below the low after the halving. There was only one brief exception, and that exception turned out to be the absolute buying opportunity. That “once-in-a-generation” opportunity is still fresh in everyone’s mind: the second half of 2022, around $10,000. This cycle, that line sits at roughly $69,000. Based on that historical pattern, it’s reasonable to assume that Strategy’s average purchase price will not be meaningfully breached. Of course, if they keep buying, the average price changes, so the numbers always need to be monitored. But at this stage, you can sketch out a scenario in which the world’s largest treasury company survives. If that happens, the probability increases that the global accumulation culture remains deeply intact. To be clear, this is framed purely as a worst-case scenario. And as I often say. Once you’ve accepted the worst case, nothing worse tends to happen and the market’s greatest enemy, impatience, loses its power.