I’m Sorry, Crypto Is Going Way Lower… [How I’m Positioning]

Bitcoin is testing a critical historical support level at $70,000, signaling potential for further downside, while broader crypto market sentiment shifts bearish due to lack of innovation, institutional selling, and a pivot towards AI investments.

• Bitcoin is at a critical retest of its 2021 all-time high, with a potential for a significant downturn if $60,000 breaks.

• A bearish shift in crypto sentiment is observed among whales and OGs, fueled by innovation concerns and an imbalance of buyers to sellers.

• Liquidity is moving from crypto to AI, impacting altcoin performance and Bitcoin's mining profitability, necessitating a momentum-focused trading approach.

Bitcoin is currently retesting its 2021 all-time high of $70,000, a crucial historical support level, raising concerns about a potential extended bear market if it breaks below $60,000. Despite short-term mean reversion possibilities, a broader sentiment shift sees whales and OGs turning bearish due to perceived innovation stagnation, an imbalance of sellers to buyers, and a lack of new marginal buyers, further pressured by a general de-risking trend across equities and other risk assets.

Bitcoin's Critical Support Level

• 00:00:00 Bitcoin is currently breaking below its 2021 all-time high of $70,000, a key retest of a prior cycle high. Historically, such retests have been very significant, and a sustained break below $60,000 would be psychologically damaging and could lead to a prolonged bear market. While this level is considered a 'value zone,' a quick reclamation is necessary if it sweeps lower.

Shifting Crypto Sentiment

• 00:06:42 Sentiment in the crypto space has shifted, with many long-time Bitcoin bulls and OGs now turning bearish, influenced by figures like CZ, Brian Armstrong, and Vitalik Buterin. This shift is driven by a perceived lack of exciting innovation, an imbalanced order book with more sellers than buyers, and uncertainty about the next major 'marginal buyer' for Bitcoin, especially as institutions and ETFs are already in the market, with sovereign funds still years away.

Liquidity Shift to AI

• 00:11:32 The broader crypto market, particularly altcoins, faces structural issues due to weak performance of new launches, shortened VC funding, and a significant liquidity exodus towards AI. Many miners are pivoting from Bitcoin mining to contributing GPU power to AI models, as it is currently more profitable, further reducing Bitcoin's hash rate and security as its price declines.

New Crypto Investment Approach

• 00:15:30 While remaining bullish on the crypto industry overall, a new investment framework is necessary, moving away from simply holding a large altcoin portfolio. This approach emphasizes greater selectivity in assets, a willingness to endure drawdowns for long-term returns, and a more significant focus on momentum trading, maintaining higher cash reserves to capitalize on opportunities when market momentum is positive.