• Are We Entering A Bear Market?

• Bitcoin Holders Shifting Long Term

• US Budget Cuts Are Coming

• Bitcoin The Digital Gold For France

• And more…

Market Data Prices as of 4:30am ET

ARE WE ENTERING A BEAR MARKET?

Last year, we published a report asking: “Is a 30% pullback near?”

The answer?

Yes. 

Since then, Bitcoin has pulled back by nearly 30%, aligning with our forecast.

But our reasoning wasn’t driven by crypto-specific factors alone.

While sentiment had become overheated, the primary concern was macro conditions.

At the time, our analysis pointed to several issues:

• Global liquidity had tightened

• The U.S. dollar (DXY) was too strong, making it harder for China and others to ease policy

• Interest rates were too high

• Inflation was slowly rising, while strong employment and economic growth prevented the FED from cutting rates

Despite these challenges, markets continued to rally—partly due to optimism surrounding Trump’s return. 

However, we believed a pullback was imminent—and that’s exactly what happened between December and February.

Importantly, we did NOT believe this correction marked the end of the cycle. 

Instead, we expected a recovery as macro trends shifted.

The Current Macro Landscape

Fast forward to today—what’s changed?

• Global M2 liquidity has reversed its downtrend and is climbing

• The DXY (U.S. Dollar Index) has dropped sharply—one of its biggest declines in years

• The 10-year Treasury yield has fallen from 4.8% to below 4.2%

• Inflation (per Truflation’s real-time data) has declined significantly

• Both CPI and Core CPI came in lower than expected this week

While our projections have largely played out, the pathway has been far more chaotic than expected.

Instead of a gradual transition, we’ve seen heightened uncertainty and fear dominate the narrative.

Many now believe the bull market is over. 

We see things differently.

As macro conditions stabilize, the stage is set for the market to resume its upward trajectory.

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BITCOIN HOLDERS SHIFTING LONG-TERM 🏆

A major trend shift is underway in the Bitcoin market—let’s break it down.

Long vs. Short-Term Holders Explained

🔴 Short-Term Holders (STHs) – Holding BTC for < 155 days
🔵 Long-Term Holders (LTHs) – Holding BTC for > 155 days

🟥 STH Cost Basis – The price at which STHs acquired their coins
🟦 LTH Cost Basis – The price at which LTHs acquired their coins

This on-chain analysis helps us see exactly where Bitcoin is being accumulated.

Current Market Insights 📊

The LTH / STH threshold has now moved to October 13, 2024, when BTC traded at $62,800.

✅ LTHs control 13,292,826 BTC (67.00% of supply)
❌ STHs hold just 3,869,499 BTC (19.51% of supply)

Over the last month, we’ve seen a clear accumulation trend:

📈 178,840 BTC has transitioned into long-term holdings

Historically, Bitcoin’s biggest bull runs have been preceded by a rising LTH supply.

This shift signals strong market confidence and a bullish long-term outlook.

We’ll check back in two weeks to track how this trend evolves! 🚀

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US BUDGET CUTS ARE COMING

The U.S. deficit is out of control, and painful budget cuts may be the only fix.

Chamath Palihapitiya points to the UK’s 2010 austerity measures, which reduced its deficit but fueled public anger and led to Brexit.

With the U.S. aiming to slash its deficit from nearly 7% to 3%, the stakes are high.

Will this strategy work, or will it backfire?

Chamath breaks it all down in this video—don’t miss it…

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BITCOIN - THE DIGITAL GOLD FOR FRANCE

As central banks worldwide continue their relentless money printing, François Asselineau, president of the UPR, proposes a bold shift: integrating 5 to 10% of Bitcoin into the Banque de France's reserves.

This challenges traditional economic policies and reshapes our understanding of monetary sovereignty.

Unlike gold, whose actual reserves remain opaque, Bitcoin offers unprecedented transparency.

With a fixed supply of 21 million units, it is immune to monetary inflation, making it a powerful store of value.

Asselineau points out a striking paradox: while France holds 2,436 tons of gold, it remains vulnerable to currency devaluation.

By diversifying reserves with Bitcoin, France could strengthen its financial independence.

Other nations have already taken the leap.

El Salvador, for instance, adopted Bitcoin in its national reserves, reducing reliance on the U.S. dollar and attracting foreign investments.

Bitcoin Mining: An Energy Opportunity?

While crypto mining is often criticized for its energy consumption, it can actually be leveraged as an industrial asset.

Countries like Finland use excess energy from data centers to heat cities. France could turn this ecological challenge into an economic advantage.

Digital Euro vs Bitcoin: A Battle for Financial Freedom

The European Central Bank (ECB) is pushing for a digital euro, but its implications are concerning.

Fully traceable and programmable, it could lead to financial surveillance akin to China's social credit system.

As Marvin Scarella, a financial expert, warns:

With France already capping cash transactions at €1,000, Bitcoin offers a way to preserve individual freedoms.

More than 12% of French citizens already hold cryptocurrencies, signaling a silent revolution in monetary habits.

By adding Bitcoin to its national reserves, France would not just be making an economic decision but a bold statement on financial sovereignty.

OTHER NEWS

• 🧀 US Gov Pressured to Swap 1.4B Pounds of Cheese for Bitcoin

• 🇺🇸 Saylor Pushes US Gov to Hoard $81T in BTC

• 🤦‍♂️ Canada’s New PM Has a History of Hating Bitcoin

• 🤝🏼 SEC Eases Up, No Longer Forcing Firms to Register as Trading Systems

• 📜 Trump Eyes Executive Order to Dismantle Biden’s 'Operation Chokepoint 2.0'

• 📉 DOJ Might Be Offloading Silk Road $BTC.X ( ▲ 1.0% ) as Markets Wobble

• 😱 EU Panics Over US Embracing Bitcoin, Warns of ‘Monetary Sovereignty’ Crisis

• 🇺🇸 US Lawmakers Push for a One Million BTC National Reserve

• 🔍️ Bitwise Unveils Bitcoin Standard ETF Tracking 21 BTC-Holding Giants

• 📽️ Rumble Goes Heavy on Bitcoin Again

• 🇷🇺 Russia Rolls Out the BTC Welcome Mat for Its Elite

• 💸 US Debt Woes: Will Bitcoin Be the Ultimate Escape?

• 🇷🇺 Russia Uses BTC for Oil Deals with China & India

• 🙄 Democrat Moves to Block Bitcoin Strategic Reserve Plan

• 🇺🇸 White House Aims to Stockpile ‘As Much Bitcoin As Possible’

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.