This episode dissects the psychology of a 'bearish bull market,' exploring why crypto sentiment is at an all-time low despite high prices, and what macro pressures and shifting narratives mean for investors.
Initial Market Analysis: A Macro Asset Under Pressure
- Joe Vazani, co-founder of Lunar Crush, attributes the downturn to an "overcooked" market, particularly pointing to the unwinding of the DAT (Decentralized Autonomous Treasury) trade. This strategy involves companies acquiring Bitcoin for their treasuries, and Joe suggests that as these companies face financial pressure, they may be forced to sell their holdings.
- He also notes outflows from Bitcoin ETFs and a broader market dynamic where Bitcoin fails to correlate with rising tech stocks but falls further on down days in the broader market.
- Yan Alamman, co-founder of Glassnode, offers a macro-centric view, arguing that Bitcoin is trading like the global macro asset it has become. He connects the price drop to the U.S. government shutdown, stating that markets are now pricing in its real-world economic impact, such as a potential 200 basis point hit on Q4 GDP.
- Yan emphasizes that Bitcoin sits at the far end of the risk curve, making it highly sensitive to economic uncertainty. As he puts it, "You're not going to buy Bitcoin if you don't expect a positive next 3 to 6 months in terms of the economy."
On-Chain Signals and Liquidity Dynamics
- Despite the bearish price action, Yan points to strong underlying structural indicators from on-chain data.
- He explains that Glassnode monitors liquidity—defined as the ability to sell an asset without significantly moving its price—by analyzing the velocity of money and new capital inflows.
- Current on-chain data reveals significant underlying movement and accumulation not yet reflected in the price. This suggests a transfer of Bitcoin from "old hands" (long-term holders) to "new G's" (newer institutional buyers).
- While older holders may be more pressed to sell, new buyers are absorbing the pressure, indicating resilient underlying demand. Yan suggests a potential bottom around $55,000 but does not see it as a break in the market's overall structure.
The Psychological Scar of the October 10th Liquidations
- The conversation shifts to the historic liquidations of October 10th and their lasting psychological impact on the market.
- Joe describes the event as a shock that forced traders to re-evaluate the market's underlying structure and the risks of leverage. He notes that while some traders quickly re-applied leverage, the event left many "sheepish," especially in the altcoin market.
- Yan adds that the liquidations exposed the crypto market's infrastructural weaknesses compared to traditional finance, which has mechanisms like circuit breakers to prevent such cascading meltdowns.
- The event likely wiped out a segment of traders, causing them to exit the market and reallocate capital to more stable assets like equities. Yan notes, "There's definitely been quite a lot of carnage."
Rethinking the Four-Year Cycle
- The hosts debate whether Bitcoin's traditional four-year cycle, driven by its halving events, is still relevant.
- Yan argues that as Bitcoin matures into a macro asset, its price action is increasingly influenced by global economic factors rather than just its internal supply dynamics. Asset managers are now trying to understand its role—sometimes it trades like gold, other times like a tech stock.
- This evolution means investors must adopt a more holistic analysis that incorporates macroeconomics, a departure from relying solely on crypto-native metrics like exchange outflows.
- Joe agrees that the industry has matured but maintains that the halving—the periodic reduction of Bitcoin mining rewards—will always create positioning shifts among miners and influence the market.
The DAT Trade Unwinds and Retail Sentiment Hits Rock Bottom
- The discussion returns to the DAT trend and its broader market implications, coupled with an analysis of retail sentiment.
- Joe describes the DAT space as "overcooked," comparing the frenzy to the ICO and NFT bubbles. He believes a shakeout is imminent, as many of these companies lack sustainable revenue models beyond acquiring Bitcoin.
- He highlights the failure of the "killer app" narrative, pointing to Poly Market's success having no positive impact on the MATIC token price. This signals that utility alone may not save many protocols.
- Joe reveals a critical insight from Lunar Crush data: "Retail is like the lowest and bearish, most bearish it is like almost ever been since we started tracking." This extreme bearishness, tracked across 50 million social posts per hour, suggests a potential contrarian buying opportunity.
Why This Is the "Most Bearish Bull Market Ever"
- The speakers explore the paradox of a market that has seen significant milestones—ETFs, mainstream adoption, favorable political shifts—yet is plagued by negative sentiment.
- Yan attributes this to poor portfolio construction, where investors were spread too thinly across underperforming altcoins instead of concentrating on high-quality assets like Bitcoin and Ethereum.
- He also points to a shift in market dynamics in 2025, which became more range-bound and volatile, making it difficult for traders to identify clear trends.
- Joe suggests the market's expectations were misaligned. Investors anticipated a "strategic Bitcoin reserve" and clear regulation but instead got speculative frenzies like Trump-related meme tokens, which signaled a less fundamentally driven market.
Gold's Rise and Bitcoin's Divergence
- The conversation analyzes why gold has reached all-time highs while Bitcoin, often called "digital gold," has lagged.
- Yan clarifies that the primary driver of gold's price is buying from central banks, not retail investors. This is part of a larger geopolitical shift away from globalization and U.S. Treasuries as the sole safe-haven asset.
- Joe adds that in a volatile environment where even top tech stocks experience massive price swings, gold offers relative stability. Large funds are opting for gold to reduce portfolio volatility, a role Bitcoin is not yet mature enough to fill.
Prediction Markets: Siphoning Capital and Attention
- The speakers discuss the rising popularity of prediction markets and their impact on the broader crypto ecosystem.
- Joe observes that new hedge funds are launching to trade exclusively on prediction markets, using alternative data to find arbitrage opportunities. This represents a significant shift of speculative capital away from traditional crypto assets.
- He notes, "If you go to like a local gym and it's a bunch of Gen Zers, they're not talking about Pump Fun... They're talking about prediction markets." This cultural shift indicates a splintering of attention and liquidity.
- The trend is seen as another factor sucking momentum from altcoin markets, which lack exciting new narratives to compete for investor interest.
The Resurgence of Privacy Coins
- The sudden and dramatic price surge of Zcash is examined, with the speakers offering complementary explanations.
- Joe attributes the initial spike directly to influential figures like Naval Ravikant and Arthur Hayes publicly supporting it. He emphasizes the power of social signals in driving retail behavior, stating, "When you have influencers... that instills a ton of confidence in retail."
- Yan provides a structural view, noting that Glassnode had been tracking shifts in Zcash's trading volatility for months. He suggests that long-term Bitcoin holders ("OGs"), disillusioned with Bitcoin's institutionalization, have been rotating capital into assets like Zcash that better align with crypto's original cypherpunk ethos.
Ethereum and Solana: Navigating a Choppy Market
- The discussion concludes with an analysis of the two leading smart contract platforms, Ethereum and Solana.
- Regarding Ethereum, Yan believes its recent outperformance was driven by a renewed narrative around its potential treasury (popularized by Tom Lee) and its role as the primary rail for stablecoins.
- Joe sees Ethereum maturing into a foundational "base computer for society," a truth layer that governments and institutions can trust for memorializing data and executing smart contracts.
- On Solana, despite the successful launch of the Bitwise Solana ETF (BOL), its price fell 20%. Yan explains this is due to a lack of overall market momentum. "As long as Bitcoin stays rangebound and suppresses, the rest of the market's going to be very difficult to see that," he states, predicting Solana will reignite once Bitcoin breaks out.
Final Price Predictions
- Joe Vazani: Predicts Bitcoin will hit a new all-time high of around $130,000 at some point in December after a period of range-bound trading.
- Yan Alamman: Agrees that a new all-time high is likely, noting that smart money is already accumulating. He suggests that once selling pressure subsides, the price could move back to the $116,000-$118,000 range very quickly.
Conclusion
This episode reveals a market at a crossroads, where internal crypto cycles are increasingly subordinate to global macro forces. For investors and researchers, the key takeaway is the need to expand analysis beyond on-chain metrics to include geopolitical trends, institutional flows, and social sentiment to navigate an evolving landscape.
