Deep Undervaluation: Comparing On-Chain Cycle Bottoms
Hodlers' Cheat Sheet
Dear Bitcoiners,
Bitcoin barely made a new low and sentiment is completely crushed. Historically, during each bottom formation, we have dropped from Undervalued to Deep Undervaluation before eventual capitulation.
In this newsletter, we’ll use on-chain expertise to compare the current bottom formation to previous cycles, revealing very valuable information: the Deep Undervaluation level.
The Hodlers’ Cheat Sheet: Where Are We in the Cycle?
👉 Key insight: We are moving from the “Why am I getting margin called?” phase to the “Shit, everyone is selling” phase.
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Over the past months, we’ve been mentally preparing for this scenario. We covered where and when the bottom could be if we had to go through maximum pain.
We have discussed how treasury companies have been the main provider of demand during this bear market. Ironically, as they got heavily criticized, that source of demand is now being impacted as products like Digital Credit are trading well below par value.
Less demand from treasury companies means less of a dampening effect, exactly what we are currently experiencing in price action.
Coming Up
Last Monday, I recorded a show with The Bitcoin Historian: Pete Rizzo. This should come out soon!
Next Thursday, July 2 at 12 PM GMT-3, I will be joining a webinar about Roxom’s Bitcoin Line of Credit: borrowing against your Bitcoin at 7.25% APR, with no rehypothecation. If you’re interested, register here.
We’ve discussed how we are in the Bottom Formation’s Low Consolidation phase. We will now use the strength of on-chain data, zoom in, and map current value against previous cycles.
