$100K Bitcoin: Is the Cycle Breaking? W/ Checkmate
May 12, 2025
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Checkmate, an on-chain analyst and founder of Checkonchain, discusses Bitcoin's recent surge past $100k. He reveals insights from on-chain data, highlighting who is buying and selling. Topics include the potential end of Bitcoin's market cycles and how macroeconomic factors, like gold's performance, might signal a longer bullish phase for Bitcoin. The conversation also dives into the OP_RETURN debate and its implications for the Bitcoin community, blending market psychology with the evolving cryptocurrency landscape.
The psychological challenge of HODLing Bitcoin highlights how recency bias can lead to panic selling during price fluctuations.
With Bitcoin’s cost basis influencing market behavior, a price above $100K suggests a bullish trend where sellers are reluctant to offload.
Gold's rising performance may signal favorable reactions for Bitcoin, indicating a potential shift in its narrative as a store of value.
Deep dives
The Challenges of HODLing
HODLing Bitcoin can be psychologically challenging, especially during market fluctuations. Investors often struggle with recency bias, whereby they anchor their emotions to their last purchase price. This can lead to panic selling when prices drop significantly, even if they have been in the market for a long time. The discussion centers around how investors may react to changing valuations, illustrating that making sound decisions is critical in a volatile environment.
Short-Term Holder Cost Basis
The short-term holder cost basis plays a significant role in market behavior and psychological underpinnings. This cost basis represents the average price at which recent buyers acquired their Bitcoin, establishing a psychological anchor point. As Bitcoin prices fluctuated, the importance of this value became evident, particularly around the $100K benchmark. A sustained price above this range suggests a bullish trend, where sellers are less likely to offload their coins, favoring the continued rise.
Market Sentiment and Decoupling
Market sentiment has been subdued despite Bitcoin's price increases, leading to discussions around decoupling from traditional equities. Historical correlations suggest that Bitcoin should have responded negatively to equity dips, yet it has held surprisingly steady. This indicates a potential shift in how Bitcoin is perceived, moving away from being viewed solely as a high-risk asset. There are implications of a decoupling, suggesting that Bitcoin's narrative is evolving, warranting attention for future trends.
Gold as a Leading Indicator
Gold's performance has significant implications for Bitcoin as a competing store of value. The historical relationship between gold and Bitcoin suggests that as gold rises, Bitcoin may follow suit, particularly in times of economic instability. Gold's recognition as a neutral reserve asset further legitimizes Bitcoin as a valid counterpart in that domain. This observation emphasizes the potential for Bitcoin's price to react favorably to macroeconomic trends driven by gold's movements.
The Role of MicroStrategy and Financial Products
MicroStrategy has become a significant player in Bitcoin exposure, effectively utilizing its public status to buy more Bitcoin through various financial products. The company’s market capitalizations indicate a willingness to leverage its stock by offering preferred shares that pay high dividends linked to its Bitcoin holdings. This strategy allows MicroStrategy to attract investments while also increasing its Bitcoin reserves. However, concerns arise regarding the sustainability of these financial products and potential risks associated with leveraged positions.
Potential Risks in Leverage and Market Behavior
The introduction of leveraged financial products in the Bitcoin space raises concerns similar to past market blowups, where speculators risked significant capital to amplify their positions. As more leverage enters the market, the volatility can lead to swift downturns that impact investor confidence. The mechanics of product inflation and the increasing complexity of financial instruments may lead to unintended consequences. Close monitoring of these dynamics is essential as the market navigates potential corrections.
Checkmate is an on-chain analyst and founder of Checkonchain.
In this episode, we get into Bitcoin’s breakout back above $100k and what on-chain data reveals about who’s buying, who’s selling, and whether retail is finally showing up. We also discuss whether the Bitcoin cycles are over, how the global macro shift is influencing hard asset flows, and why gold might be the early signal for a longer Bitcoin run. Finally, we get into the OP_RETURN war.
