Bitcoin. How Low Will We Go? 

Good morning. Some analysts are wringing their hands, thinking Bitcoin could drop into the $90Ks or $80Ks. Let’s talk about it. Then, Fed. Chair Powell made some comments at an economic conference on Tuesday which . . . well, it implies that Bitcoin will not be dropping into the $90Ks or $80Ks. 

All of that, plus . . . 

• Honey look! Plan C just dropped his new Bitcoin Quantile Model. 
• Solana is at major support levels right now. DEGEN anyone? 
• And your Alpha Leak. 

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Chart of the Day

The Bitcoin Quantile Model v2, created by Plan C, was released yesterday on X. Now you can read the technical description in the link provided, but these models use “quantile regression” to forecast future valuations based on prior price action. 

Now what’s interesting is as of yesterday, $110K is at the boundary between Bitcoin’s discount accumulation zone and the premium valuation zone. Or in other words, $110K, according to this model, is right now the fair market price for Bitcoin. 

However, look at where that fair market price is projected one year from now. $154,000. And five years from now, it’s $515,000.

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Trade of the Day

I’m sticking with the OG here. Bitcoin is resting above a major support / resistance band right now between $107K to $110K. Therefore, if you’re going to be a contrarian, and buy when the market is fearful, then a good time to do that is now. 

So I’ve provided the zoomed out chart here, because you might want to refer to it with regards to our first story below. The TLDR on that is some analysts think we could see a retrace soon into the $90Ks or $80Ks. 

But we disagree. Our thesis is that under the current conditions, the worst case scenario for Bitcoin is it falls to but holds $100K. Therefore, if you’re buying spot or going long at $111K, consider leaving some dry powder left over for a possible $100K scoop.

Want more real-time setups and trade calls? Join our Inner Circle community.

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Alpha Leak

• Chainlink [LINK] has teamed up with S&P Global to launch the stablecoin stability assessment on-chain, which will provide direct access to stablecoin risk data across DeFi and smart contracts. Or in plain English . . . S&P Global has teamed up with Chainlink. 
• Hyperliquid [HYPE] appears to be a major winner, after the dust from last week’s liquidation event has settled. The protocol didn’t crash, it collected fees which will go towards token burns, and the general sentiment and the other basic fundamentals of the protocol look sound.  
• Limitless is a new predictions market that focuses on users predicting future crypto and stock prices. Season 2 of the points program is live now, and the protocol’s native token is set to drop this quarter. 
• PortaltoBitcoin [PTB] launched its mainnet on Monday. The project says that their L2 allows for users to engage in Bitcoin finance, all while maintaining self-custody of their Bitcoin. 
• Yieldbasis [YB] launched its native token yesterday. The project uses “original automatic market making” to generate yield on crypto tokens. 

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News Roundup

Bitcoin. How Low Will We Go? 

If you’ve been watching Bitcoin’s chart lately, you’ll know that prices rebounded from last Friday’s wick lows around $105K, back up to $116K earlier this week. The problem however is that $116K didn’t hold, and Bitcoin has fallen back to $111K, at the time of this writing. 

And it’s this particularly weak price action, over these last few days, that has some professional analysts worried that a deeper retrace into the $90Ks or even $80Ks might soon be in the cards. 

So here’s the basic idea. Bitcoin holding the $107K to $110K support line is critical. This was the major resistance line for the first half of 2025, and it’s held as support ever since. Thus, the idea is if Bitcoin fails to hold this support level again now, then $98K is the first technical stop, with the low $90s and the low $80s after that. And you’ll remember that Bitcoin actually wicked down to $75K in April of this year, during the major Trump tariff scare. 

Now, how likely is any of this to happen? It’s very difficult to say. And while anything is possible, our bet is that if the $107K to $110K support line fails, then Bitcoin perhaps revisits $100K, but that level holds. 

Given the level of purchasing that we’re still seeing from the corporations, along with the monetary backdrop (i.e. see our next story), and the fact that most of the leverage has already been washed out of the system, Bitcoin dropping to the lower $90Ks or $80Ks at this point seems improbable. 

Fed’s Powell Suggests End to Quantitative Tightening 

Jerome Powell signaled on Tuesday that the Federal Reserve is probably close to ending its quantitative tightening (QT) program that’s been running since mid-2022.  The signal came during his speech at an economic conference in Philadelphia, when Powell stated that the Fed “may approach that point [of ending the QT program] in coming months.” 

Now you’ll remember that the Federal Reserve has two big levers they can pull in order to manipulate the economy. The Federal Funds rate and QT/QE. The latter directly sucks or injects cash away from or into the economy. When the Fed is doing QT, they’re selling US treasures, which means they’re shrinking the money supply. And when they’re doing QE, they’re buying treasuries, which means they’re flooding markets with liquidity.

Therefore, a coming end to QT means that the constant drainage of dollars falling out of the economy and into the Federal Reserve will soon stop. That’s bullish for risk assets. 

Moreover, Powell, in his speech, also hinted that more rate cuts are probably coming. He noted that the “downside risks to employment have risen”, which probably indicates that the Fed is leaning into a rate cut cycle in the short-to-medium term. 

US DOJ Seizes 127K Bitcoin from Cambodian “Pig Butchering” Ring

News broke this week that the US Department of Justice seized 127K Bitcoin from a Cambodian “pig butchering” ring. Pig butchering is where scammers build fake relationships online with usually more wealthy Western victims, and then convince those victims to hand over their crypto. 

This particular ring was run by the Prince Group, an Asian transnational criminal organization, founded by Chen Zhi, who is a UK and Cambodian national. And the details of how this scam ring operated are grizzly. Think forced-labor compounds in Cambodia, with trafficked workers who are exploited to perpetuate these online scams. 

But what’s unresolved about this case is how the US DOJ was able to seize the 127K Bitcoin. No one knows. One of the more probable theories is that the seizure is connected to a major hack in 2020. Five years ago, 127K Bitcoin were allegedly stolen from LuBian, which was a Bitcoin mining operation running out of China and Iran. And guess who controlled LuBian? The Prince Group. 

Pretty wild stuff. 
Now, what happens to the 127K seized Bitcoin? That’s not clear either. Senator Cynthia Lummis is pushing for it to get swept into the US’ new Bitcoin strategic reserve. That would be consistent with the President’s reserve executive order. However, it’s also possible that some of the Bitcoin gets returned to the scam’s victims.

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Degen Play of the Day

Solana is our DEGEN Play of the Day. The TLDR here is we like the risk-reward on longs right now, with some proper stop loss risk management. 

So here’s the basic idea. Are the crypto bros scared RN? Check. Are SOL’s prices in the gutter? Check. Is it contrarian to go long now? Check. So . . . why not give it a go with a parachute? 

So we think long entries between $187 to $195 look pretty good. Now you could run a tight stop loss just below the 200D EMA, at about $185, or you could give yourself some breathing room with a stop at $170, which is just below the multi-month ascending support line. Good take profit targets on a trade like this are at $210, $230, and $250.

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Wealth Mastery (Lark Davis, and the Wealth Mastery writing team) are not providing you individually tailored investment advice. Nor is Wealth Mastery registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Wealth Mastery is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.

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