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No illusions

Johan Bergman

Feb 4

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In last week’s bitcoin market update, called “Stuck in the Middle with You,” we wrote about bitcoin being in a downtrend and about price action and on-chain metrics showing “sell the rip” behavior. We saw arguments for a continuation of the downtrend, but also identified a possible bullish scenario. Long-Term Holder selling pressure was easing, and in the options market, we saw investors start to position more bullishly for the end of February.

The foundations of money are shifting in ways that are easy to feel but harder to name.

Persistent deficits, rising debt, and central bank behavior are quietly reshaping how investors think about preservation and risk.

In The Debasement Trade, James Lavish explains why currency debasement is structural, why traditional portfolio assumptions are being tested, and why gold tends to move first while bitcoin often moves further as the implications compound.

The report covers:

Why debasement is not cyclical
How inflation and financial repression stress familiar portfolios
Why gold signals early—and bitcoin expresses the shift later, with more asymmetry

Download Report Here

While a PCR ratio of 0.7 at Deribit isn’t bullish by itself, we pointed out that it came from 0.85, which means more call contracts were created than put contracts. We concluded that even though selling pressure was mostly gone, we still needed demand to outpace supply. We expected that demand would not be endogenous, but had to be exogenous. Japanese government bond yields soaring higher, and the US government doing a rate check could have been such an exogenous impulse.

In the Mean Median Mode: Calm Water, Rising Tides, the price was steady and creeping up to $95,000.

We concluded that section of Mean Median Mode with:

What this means for bitcoin and risk assets:
Price moving above $93,500 helps build a case for a possible trend reversal towards an uptrend. If this rally also fades, it could mean the market wants to test the bear case at the bottom of the range. Losing $84,000 would increase the probability of trading into the air pocket toward $75,000.

This is an excerpt of what we wrote about the chart setup:

“While bulls are trying to build a case for a trend reversal and resuming the bull market (or starting a new one), we need to acknowledge that this would be a great place for bears to sell into temporary strength and short the market toward the air pocket around $75,000. That would get them a juicy ~$20,000 per contract, and afterwards they could get into longs at low valuations.”

A price of $95,000 was the level we wrote about for weeks on end. That was the “Hodlers’ Wall,” as James Check likes to describe it. It was the Point of Control for the last 1.5 years of trading. Between $98,000 and $95,000 there was a lot of confluence. Our market divider, the AVIV Ratio Mean, was at that level...

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