Why Did Bitcoin Take a Breather?

---

Chart of the Day

This is the AUD/JPY daily price chart. Traditional analysts keep an eye on it, because it can indicate what’s to come for “risk-on” assets like Bitcoin and crypto. 

From a macro perspective, the AUD is a “commodity currency”. Meaning, a stronger AUD signals a stronger global economy, which is ultimately bullish for risk-on assets. Alternatively, the JPY is a “safe-haven” currency. That’s because the JPY tends to strengthen as investors unload their risk-on positions. 

So when the AUD falls in value to the JPY, that can signal weakness in Bitcoin and other crypto assets. And note in the chart that when the AUD/JPY hit $90 on August 5th, Bitcoin tanked to $49,500. The AUD/JPY is something to remain cognizant of when navigating these markets. 

---

News Now

Why Did Bitcoin Take a Breather? 

Bitcoin and the larger crypto markets were in chill-mode earlier this week. You’ll remember that it was only last Friday when Bitcoin hit an ATH at $99,800. But by Tuesday, the asset corrected 9.07%, to a local low of $90,742. 

However, the question really isn’t what, but why. 

And the answer is that some of Bitcoin’s “long-term” holders have been taking profits. According to new data from CryptoQuant, “long-term” holders unloaded 728K Bitcoin in the past 30 days. Now this sounds scary, but it really is not after looking at the details.

First, “long-term” holders are defined as anyone who’s held Bitcoin for at least the past six months. And data from Glassnode shows that a significant portion of the Bitcoin sold in the last 30 days was from holders who acquired their bitcoin between six to twelve months ago. 

So we aren’t talking about diamond-handed OGs here. This is more like swing traders who loaded some bags in the $40Ks through $60Ks, and are now taking some profits.

Second, what I find extremely interesting and bullish, is the identity of those purchasing the bags of these swing traders. 

Again from Glassnode, some of the major buyers were investors via the US Bitcoin ETFs. They were the ones responsible for absorbing a large percentage of the “long-term” holders’ bags. And then there’s Michael Saylor, who over the course of November purchased a cool 134K Bitcoin. 

So let’s just zoom out and think about this. Holders, a significant portion of which bought six to twelve months ago, were selling their bags to ETF investors, Michael Saylor, and likely several other institutional players. Bullish. 

Finally, this 9% correction was extremely healthy for the market. We needed this cool-off period, and the capital rotation that it brought. This phase and price level will be key for establishing support before we break $100K. 

Updates on BTC Nation-State Adoption + Rumble

It’s wild that this news has to be broken down into bullet points (i.e. because there’s so much of it), but here we are. Also, if you’re interested in the Bitcoin nation-state adoption story, Lark dropped a fire Youtube video on the subject a few days ago.

However, here’s the latest news as it relates to nation-states adopting Bitcoin as a strategic reserve: 

• Brazil:  On Monday, Congressman Eros Biondini introduced a bill to create a Bitcoin strategic reserve for the country. The bill proposes that Brazil allocate 5% of its $372B reserve into Bitcoin. WTF. 
• Suriname:  Presidential candidate Maya Parbhoe has made Bitcoin the centerpiece of her presidential campaign. TLDR, she wants Suriname to adopt El Salvador’s Bitcoin strategy, and she says that if she’s elected, she will do it. 
• Poland:  Presidential candidate Slawomir Mentzen has promised that if he’s elected, he will make Bitcoin a strategic reserve of the country. Additionally, Mentzen wants to make Poland a “cryptocurrency haven”, by ushering in friendlier regulations and lower taxes on crypto. 

Finally, we need to talk about Rumble (RUM), the video-sharing platform that’s Youtube’s largest competitor. On Monday, the company announced that they are diversifying their treasury to include Bitcoin. Rumble will begin purchasing the asset, with plans to buy up to $20M. 

Although Rumble isn’t purchasing the biggest bag, as compared to some other corporations, I think this development is extremely bullish due to the nature and second-order effects of Rumble’s forward-looking business. 

Ethereum is Looking Bullish 

Did Vitalik just swap out his cardio routine for the heavy weights? 

Jokes aside, Ethereum’s price is starting to look bullish. Now this is something we’ve been pretty confident would occur sooner or later, and it appears that Ethereum’s time just might have arrived. 

For starters, at the time of this writing, Etheruem is up 15% over the past week, compared to Bitcoin’s 1.5%. But the data under Ethereum’s hood is even more compelling. Here’s some points to consider: 

• According to data from CoinGlass, the open interest for ETH futures and perpetuals just hit 6.32M ETH, which is a record. Moreover, this open interest is up 17% since the beginning of November. 
• The ETH options market is heating up. Currently, there’s over 2M active contracts on Deribit, which is the highest amount since late June. 
• The TVL on Ethereum is ripping north, and just surpassed the previous highs of 2024, that were set back in May and June. 
• Ethereum just flipped Tron in terms of USDT on the network (i.e. $60B to $57B, respectively). The last time Etheruem beat Tron here was May of 2022. 

Finally, the fact that critical Ethereum metrics are increasing, in addition to an expected and imminent altcoin season, tells us that Ethereum might be the sleeping giant that’s waking up right now. 

Just a Chill Guy (CHILLGUY) has No Chill 

The Solana memecoin frenzy is full steam ahead. And the current front-runner is Just a Chill Guy (CHILLGUY). But, there’s been nothing chill about CHILLGUY’s price, or the creator’s recent legal moves. 

So on Tuesday, CHILLGUY touched $0.65. This marked a solid 195% increase from last week’s lows of $0.22. The coin currently boasts a total market cap of $560M, despite only existing for a few weeks.

But the irony here is the creator’s very unchill actions. Last week, Philip Banks tweeted that he’d copyrighted Just a Chill Guy, and would be issuing takedowns against any for-profit imitators. Interesting. 

So what’s this memecoin all about? Well, it seems to be a homage to the Zoomers. You’ve got the chilled-out dog mascot that’s dressed down and looking comfy in his grey sweater, jeans, and red kicks. All of that, plus the name, and some social media virality, and you’ve got another memecoin winner. 

However, what’s most intriguing is what on-chain analytics platform Nansen tweeted on Monday. Apparently, about $100K of “smart money” flowed into the asset this past weekend. Smart money here refers to either institutional or high-volume investors. So, it appears that there’s at least a few big players who believe CHILLGUY’s best days are still ahead.

---

Today On Chain

Circling back to Ethereum, here’s an overlay of the TVL, number of daily transactions, and price. 

You can see that TVL has just broken the 2024 highs that were set in May and June. TVL is currently at $69B, while this past summer we saw highs of $68B. Moreover, the number of daily transactions is now firmly higher than what we were seeing this summer. 

However, what’s not (yet) higher is price. Tick tock, tick tock. 

---

🔥 GET $150 FREE ON BITUNIX! 🔥​

Trade all the best crypto coins with NO KYC 👀 ​HERE’S HOW TO GET THE $150​

Sign up using the link below Deposit $200 or more Claim your $150

ACT NOW – Limited TIme Offer

---

Altcoin Alpha

• Avalanche [AVAX] just went live on Monday with its largest upgrade ever, via testnet. It’s called Avalanche9000. This upgrade slashes transaction fees, makes it cheaper to run a validator, and apparently makes it very easy to build and launch network dApps. Make no mistake, this upgrade is a big deal. 
• Stacks [STX] just rolled out its timeline for the release of sBTC, the protocol’s Bitcoin-backed asset for DeFi. Phase 1 begins in mid-December as BTC for sBTC swaps goes live. And Phase 2 starts in February, where users can redeem their sBTC for BTC. 
• SUI recently announced a partnership with Franklin Templeton. Sui says that the partnership will allow it to “seek[] value creation opportunities to allow Sui builders to deploy novel technology onchain.”

---

Recommended Services

🚀 BYBIT: #1 EXCHANGE FOR TRADING 👉 GET EXCLUSIVE FEE DISCOUNTS & BONUSES

🔒 BEST CRYPTO WALLET TO KEEP YOUR ASSETS SAFE 👉  BUY LEDGER WALLET HERE

---

Legal Disclaimer

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.

You can find a full disclosure of all my crypto & venture investments here.