Cheese with holes is usually something to smile about. In markets, it is not. The recent sell-off in bitcoin did not just slice through important levels like $100,000 and $96,000; it exposed how little real support there was underneath. What should have been heavily defended zones turned out to be soft spots, with price cutting through them like they barely existed. In this letter, we walk through what happened, what has changed, and what might come next. We look at the lack of reaction around key levels, the growing unrealized losses for Short Term Holders, and the signals from on-chain tools like MVRV and the relationship between the STH cost basis and the 200-day moving average. We also revisit the four-year cycle idea and question whether it still applies in a market where participants, macro conditions, and liquidity dynamics look very different from previous cycles. Some of the data still fits a “bull market correction” narrative. Some of it points to a possible regime change and a prolonged downtrend. At the same time, the macro backdrop and gold’s recent performance do not fully line up with a classic, brutal bear market either. This mix is what makes the current environment so uncomfortable. It feels different, and the usual templates do not perfectly apply. What follows is not a neat story with a clear prediction. It is an honest attempt to line up the evidence, separate emotions from signals, and rethink the path forward.
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The entire “Cautious Zone” should have offered way more resistance if most investors really thought that price would go much higher from here. If most investors had that mindset, they would step in and buy bitcoin to ride another leg higher. It’s voting with your money. If we see this kind of price action, it looks like the opposite. It feels like the majority of investors think the market goes lower and are actively selling or joining forces and throwing some additional fuel onto the fire. We have been comparing this pullback with the others from August ‘24 and April ‘25. But back then, it was more obvious why the selling took place. It was about the Yen Carry trade winding down and the Tariff Tantrum. This time, it’s a lot of selling without one specific reason. This chart shows that the price just fell through the most heavily traded volume of the entire 12-month range. The True Market Mean is currently within “rock-throw” distance, and even the “2021 High” is coming into sight again... Subscribe to The Bitcoin Layer to unlock the rest.Become a paying subscriber of The Bitcoin Layer to get access to this post and other subscriber-only content. A subscription gets you:
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Wednesday, November 19, 2025
Weakness
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