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The Best Time to Accumulate Bitcoin Is Running Out | James Check

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James Check challenges the prevailing market consensus that Bitcoin has already found its bottom, arguing instead that the market may continue to form a base through early next year. He explains that bear markets function as the inverse of bull markets, beginning with a core group of committed holders who refuse to sell and ending when speculative investors panic and capitulate. According to Check, we have recently witnessed two distinct forms of this capitulation: a price-driven event in February where fear caused a sharp drop to around $60,000, and a subsequent time-based capitulation in June and July characterized by sideways movement and the unloading of billions in ETF assets. He believes that while the absolute bottom might not be fully established yet, the necessary conditions for one have been met, as evidenced by seller exhaustion following incidents like the coldcard hack and a failed soft fork, which allowed buyers to step in without driving prices significantly higher. A significant portion of Check's argument focuses on the shift in market sentiment and the composition of holders at current price levels. He points out that between $70,000 and $58,000, approximately $300 billion worth of Bitcoin is now held by investors with a cost basis within this range, representing a massive concentration of long-term holders who are not looking for minor gains but rather multiples to recover their losses. This dynamic creates a powerful tailwind where dips are likely to be bought rather than sold, fundamentally changing the market structure from one driven by fear to one driven by conviction. Check also disputes the traditional view that bull markets are characterized by gradual rises punctuated by sharp drops, noting instead that recent cycles have seen prices grind upward with occasional nasty red days, a pattern often misinterpreted as bearish behavior when it is actually a hallmark of a healthy accumulation phase fueled by short squeezes and positive sentiment shifts. Regarding the future trajectory of the market, Check advises investors to stop relying on the broken compass of the four-year cycle or specific calendar dates like October for bottoms. He argues that anchoring expectations to a calendar creates confusion when the market does not adhere to historical patterns, urging traders instead to look for mechanical evidence such as realized loss events and capitulation signals to determine market turning points. His personal strategy involves heavy dollar-cost averaging during deep value periods, which he executed between February and August, after which he reduced his accumulation pace as Bitcoin moved into what he considers the upper bound of its value zone. He suggests that once the price breaks above $83,000 and holds on a weekly basis, the bear case becomes untenable, and the market will likely move quickly toward euphoria, making it difficult for bears to find reasons to short the asset. Finally, Check addresses the thesis that altcoins will lead the next bull run due to tokenization trends, expressing strong skepticism about their ability to outperform Bitcoin. He questions how value transfers from sidechains like the Robinhood Chain back to native tokens like Ethereum, arguing that high fees and poor user experiences on these chains negate any potential benefits for the underlying blockchain's native currency. While acknowledging that some protocols use buyback and burn mechanisms to create value for their tokens, he maintains that Bitcoin remains superior simply by offering a reliable way to send, receive, and hold assets without complex mechanics or excessive costs. Ultimately, he concludes that while all markets are cyclical due to human behavior, the specific timing of these cycles is driven by investor psychology and exhaustion rather than rigid calendar events, making it crucial for investors to focus on observable market mechanics rather than outdated historical patterns.
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The consensus seems to be that the market has bottomed or that it's close to bottom. What if the market will continue bottom out forming a bottom in Q1, Q2 next year? What makes you think that that's unlikely? >> Yeah, sure. So, I mean like of course the market could do that. None of us can tell where the market's going to go. Uh my view on how bare markets play out at the end of the day, they're a process and they're kind of the opposite process of a bull. So think about what a bull market is. You start with a pool of hodlers who really know what this thing is and no one wants to sell, right? That's what puts a bottom in. Then over the course of the bull market, the price rises. Those people start to sell. The rising prices brings in more demand. The overall sophistication level of the investor who's buying tends to drop. The smart money sells out. and you get a pool of people who've bought a ton of coin thinking it's a great idea feeling really good about it at a very very high price which they soon find out bare markets are the opposite you your starting point is all of those speculators and folks who thought we're going to the moon let's rock and roll and as the market sells off more and more of their coins go underwater they start to look at themselves and go oh my god have I made a mistake and then they start to sell and what generally happens humans are hurt animals we generally all decide that, oh no, I just bought the top. I should sell now cuz I'm scared. We all decide this at the same time. Now, we generally see this play out in two events. I call it the price pain capitulation and the time paying capitulation. Folks who've just gone through the bare market, you'll probably recognize both of these. In February, we sold off to 60K. It was like 59 on a wick. 60K. That was a point of genuine fear. You've got the maximum number of people who still own. They're kind of white knuckling it, hoping that it's not a bear. goes to 60K and they go, "Oh no, this is going to get so much worse." And they panic and you get the biggest loss event. And we saw this, it's by far and away the biggest loss event that we saw of this bare market. Now, that's where the bottom isn't in necessarily, but most of the downside price action has happened, right? What we really have ahead of us is the time pain chapter. And we all went through this. It's boring. It's sideways. The market goes nowhere. It's frustrating. people who believe in Bitcoin are currently just going what if this thing doesn't come back what if my thesis is wrong and they start questioning themselves and then in uh June July we had another capitulation which I call the time paying capitulation strategy started selling coins the ETFs unloaded $8.5 billion everything was bearish and Bitcoin was dead and that was the second capitulation 58k now what's the difference between 58k and 59 or 60 nothing in the grand scheme of things nothing it's the six months that separated them. That's the actual difference. So, have we seen a bottom get put in? In my opinion, yes. We've seen the two capitulation events I was looking for. Um, to give you a bit of a sense of scale here, between 70K and 58K, which is like the bottom range of our basing formation, $300 billion worth of coin in cost basis, measurable on chain. That is where $300 billion worth of capital owns Bitcoin. The market cap when FTX blew up was 300 billion. So the whole market cap at the bottom of the last bare market is in cost basis capital just down there around the 200WE moving average. So yes, we absolutely could base for much much longer. However, from my perspective, we've seen the capitulation. We've seen the top buyers get sold. We've seen what I think is seller exhaustion because we had the cold card incident. We had a failed soft fork. We had sailor selling ETFs. Like everyone was selling and the price went sideways for like two and a half months. Seller exhaustion, right? The buyers were willing to step in. We saw a ton of capital. So yes, we could. Um but it's not my base case. And from my view, I think we've seen all the properties I would like to see at a bottom of a bare market. Um you know, in the low 60s. To me, that feels robust enough. Um if we get pullbacks, I think dips will now start being bought um rather than rips being sold. So, I think that sentiment has has meaningfully changed. >> We'll continue in a moment, but first I want to tell you about a product from our partner. Every year, exchanges get hacked, wallets get drained, and keys get stolen. Enra Zero is built to make that impossible. No USB, no Bluetooth, no Wi-Fi. Every transaction is signed offline and verified by QR code. It's the only wallet certified EAL7, the highest security rating a financial device can hold. Four layers of tamper protection. Biometric access. Nothing gets in. Back up your key on graphine. Steel fireproof. Built to outlast disasters. Track your portfolio in the liquid app. Your keys never leave the device. Enrave. Own your crypto. And now let's get back to the conversation. I have a counterargument here because for example, I was uh listening to an interview with Mark Yusk not long ago and he was commenting on this latest short quiz short squeeze that we saw uh that brought the m brought the market up higher. He was basically making the point that >> usually those types of moves do not characterize bull markets because in bull markets usually the price goes down goes up gradually and then you have like spikes sharp spikes down when something some news some bad news or perceived bad news happens. While on the contrary during >> during bare market the market is going down most of the days gradually and then you have spikes up when some good news or perceived good news happens. So that seemed to be precisely the case when uh some some good news sparks this very sharp move up. So what is your comment on that sort of >> I mean I actually disagree with pretty much everything that was said there honestly. Um, so most of the time in a bare market the price goes up. Like you can go and look at the statistics. Most of the time in a bare market the price is actually grinding higher and then we have a handful of really nasty red days and then it grinds higher. This is literally the definition of a bare flag. Price goes down in a big waterfall. It's like a week and then it just grinds upwards giving people hope. People get hopeful. Oh, what if it's back? What if it's back? And then it goes off again. Bull markets are the opposite. it goes up really sharply in like a handful of days. Um 10 days, 20 days in all of Bitcoin's cycle is like responsible for the whole gain of that bull cycle and then it actually grinds down and corrects most of the time. It's the opposite. People get scared and they're worried that oh no, it's going to be finished and then it climbs the wall of worry. So I actually think that's in reverse. Um now every bare market bottom that we've seen since 2018 because really once you go back early than that it's too small. Um, we have seen a short squeeze be the thing, one of the things. It's not the only thing. The short squeeze was fuel on the fire that was already built. We saw this in January 2023, a very strong strong short squeeze and then it just didn't go down again and it just went up again and it didn't go down again. We've seen a very big short squeeze and the market's just holding in what I call a high and tight consolidation, just grinding sideways. Everybody has bare market PTSD. They think it's going to go down again. And by the way, it might, and this is just my perception of the world, 2018, we saw a short squeeze all the way up to 14K because everyone was so confident that it had to go lower. Now, my perception, and again, that's just my observation. Um, there's two things that I think probably differ to the general consensus. I think the consensus has been bottom in October for uh following the four-ear cycle. It's got a bottom exactly a year after the top. That has been in my view consensus. That is why people were short because they believed that the 4-year cycle was going to complete to the dot to the crossing the tees, crossing the eyes. They believed it was going to be exactly the same as last cycle and they were surprised. It went up through their level and it hasn't given it anything back. You know, we're down 7% from the local top. Now the other thing if you look at from an onchain perspective if you imagine all the people who capitulated and sold they are transferring coins from a high cost basis to a low one. The people who bought that low cost basis are much much higher conviction investors. Um at the bottom of all bare markets and this has been a very consistent theme. 80% of the wealth has been owned by long-term holders. 80% of the wealth is currently owned by long-term holders. We're at a level where we just have a high concentration of hodddlers who own the supply and they're not looking for a 10% move. They're looking for multiples right back to all-time highs. So, we have a high concentration of hodlers. Um, on the rally that we've seen, we can look at things like the amount of supply that's gone from in loss to inprofit, the amount of unrealized profit, just the way that people's portfolio has changed. We saw 4 million Bitcoin go from in loss to in profit. 20% of the supply. It's a massive move. That's a tailwind. People now feel like, hey, I bought the bottom and now I being rewarded for it. You know what I'm going to do? I'm going to buy the next dip. It just has the capacity to turn the tailwind of sentiment. So, the short squeeze is actually something we've seen in every bare market end um from 2018, 2022 or 23 um and now. And also the the the just the sheer size of the recovery of coins that have gone from in loss to in profit, which is how we feel, right? We we respond to our portfolio. The amount of coins and wealth that's gone from in- loss to in profit is so large. There actually aren't any instances in previous bears because they've all done the same thing where we've seen that much tailwind revert back into a bare market. The the recovery has been so strong in people's portfolios. I think it's sufficient to change sentiment. So, um, yeah, I actually don't I don't agree with that, uh, that framework at all, but, uh, that's what makes a market. >> Yeah, that that's interesting. I kind of I think I agree because I saw a piece of research that was published not long ago that was pointing out that >> just a handful of days make a bull market and that% >> essentially that makes that makes timing the market in Bitcoin very difficult specifically because of this very very short period of time when when it when it spikes. Um >> absolutely >> but uh yeah I have another question regarding your personal strategy. So, I know that you're a big fan of DCAing into Bitcoin. >> Um, have you increased your DCA strategy since uh this time is a good good value proposition sort of period for Bitcoin? >> Yeah. So, my framework and what I've been talking to my subscribers about in on February at the at 60K when we got to 60K on the day I recorded a video uh report called welcome to deep value and we'd been discussing the framework of like when we get down to I use you know various indexes and and tools and things to spot like areas I think of value and my thesis was if we get anywhere close to 60k that is deep value territory that is the kind of environment where you're just going to look back and go do I really care if I bought at 60 or 62 or 59. No, I don't care at all. If I go back to the previous bare market, I don't really care if I bought at 15, 16, 17, 18, or 20. They're all great prices, right? Even today. So, um, I actually amped up my DCA from February onwards. And I used a bunch of tools to to frame this up. Um, by the time we got to I mean, August, I was 90% deployed because my view was we're in the bottom formation range. And my general advice is people spend so much time and energy and me mental anxiety trying to buy the bottom wick and they're trying to find the perfect indicator that's going to tell them the exact bottom. These things just don't exist. And the sooner you can let go of like pretending that there's like a perfect bottom that you're going to be there, finger on the green button, ready to go, most people when like the bottom happens, they're like, "No way. I'm not touching this. It's going way lower." Like they're scared. So, um, I'm a big advocate for DCA, but I'm also a big advocate for DCAing heavily when it's discounted and then backing off a little bit. So, I still think Bitcoin is in great value. I think it's cheap. It's no longer as cheap as it was. It's not what I would call deep value. Probably the upper bound of the value zone, right below 100K, I probably say is like value given where I think it's going to go. However, I've basically accumulated the stats that I was going to accumulate. I'll keep my DCA going for a little while, but I've certainly backed it off a little bit. Um, because more or less I did the job, which was between February and August. That was the the cheapest period in that I've seen for a very long time in Bitcoin. So, I bought as much as I could in that time. Um, frontloaded it and now I just kind of let the market run. >> H. And so, what would be a level where you would stop stop this alto together? >> Yeah. So, honestly, I think probably 100K is probably about right. I mean, you know, I think the next move, um, whenever we get the next move higher, um, breaking through 83K, 82K, there's, you know, people can draw their own lines and levels, but, um, I think getting above 83 and holding it on a weekly basis is just like it's game over for the bare case in my opinion. You're above the 50we moving average. You set a new technical high. I find it difficult to argue the bare case. There's still some holdouts out there who, you know, are expecting it to roll over and they're finding some reason why October is going to be the bottom. Um, my general view is that I think we've put the low in. Um, I think dips are now likely to be viable. Um, and I think that just sentiment overall has has turned. So, um, I think once the next move comes in, you'll be hardressed finding too many bears um, out in the wild. And by that point in time, things start to move back towards like we're not going to go straight to euphoria, but once we're above 85, there going to be few bears out there. People are going to start levering up. They're going to start doing dangerous things. we're going to get nastier dips like the path back to all-time highs and then above like then it starts to get steamy, right? It can get steamy fairly quickly. So, um yeah, it depends what the market does and I'll just assess and engage as it as it plays out. >> What sort of event in the market would sort of make you reevaluate your thesis for the next months? >> Yeah, honestly, at this point in time, until I start seeing like a meaningful shift in investor behavior, you know, um old money starting to really like sell heavily and say, "Hey, something's something's wrong here." That's something I'd pay attention to. Um, you know, long-term holders basically stopped selling. I think you said we spoke last in December. Um, long-term holders stopped taking profit from there onwards, like basically all of 2026. So, if you think about what that means, the people who sold heavily at the top stopped selling in when we sold from 80K down to 60K. So, if they're not selling, what are they doing? They're either in wait and see mode or they're in probably time to start accumulating mode. market formed a base, stopped going down. Those people have done their accumulation. They own 80 odd% of the market. You know, when they start selling again, it's usually because we're approaching previous all-time highs. So, if they start selling heavily, and they're not, they haven't at the moment. Um, there's been basically no uptick in their sales side. If they start selling meaningfully, that's like information. That's the people who've been around for a long time sending a signal and saying, "Hey, there's worth it's worth actually distributing and selling at this point in time." If it's out of sync of where I would expect it to happen, meaningfully below all-time high, that's something I would take notice of. Um, but at this point in time, it's I, you know, it would really take a change, a meaningful shift in investor behavior that I see in the onchain world for me to change my thesis. >> And now I would like you to comment on an interesting thesis that I heard from Ron Neoer. He was saying in his show that according to him, the next bull market won't be led by Bitcoin, but by altcoins. uh that altcoins uh altogether have the potential to outperform Bitcoin in the next uh uh crypto bull market and that is because it is is because so essentially tokenization now has made crypto has created the sort of product market fit for crypto finally with Robin Hood chain and so on. He he basically said that this um this is a breaking point which would spark bull market led primarily >> by altcoins and not by bitcoin. What is your view on this? >> Yeah. So honestly I don't think about altcoins that much anymore. I just find them very uninteresting. Um my question I guess I would pose it as a question to the audience. Let's say that Robin Hood chain is extremely successful. It's an arbitum fork. Can somebody please explain how ETH benefits from that at all? Like at all. I can't I I cannot make the the square circle on how Ethereum ETH sorry Ethereum the blockchain and the EVM Salana the blockchain and the whatever their coding language is SVM. I don't know how a lot of usage of that on a side chain that pays next to no fees to the main chain. I really don't understand the mechanics of how value transfers from tokenization. If you tokenize Tesla's stock, there's a bunch of people trading it. First things first, if you put on the Ethereum, the reason it's on Robin Hood chain, not Ethereum mainchain, is because Ethereum mainchain can't handle the volume that a global stock market can. Full stop. So therefore, and by the way, the fees would then go up and people would just say, well, we should probably invent something that's cheaper and they will. There is no shortage of block space out there. So the race for fee revenue is always to zero. Because for me, if you want me to trade Tesla stock or Nvidia on your blockchain and the fees are charging me $50 today and $45 tomorrow and $10 then and then $5 and then $150 and I got to buy some weird random token from Binance to do it. The horrible user experience. It's just not going to happen. People want to use dollars. They want the fees to be $3 or $1 or free or whatever it is. They want the fees to be consistent, cheap brokerage. I don't want to be playing around with some random asset in my portfolio. I cannot for the life of me convince myself that there is any value transfer from the valuable part which is the Tesla stock or the Nvidia stock or the Micron stock. The tokenized thing is valuable. The rails on which it exists are simply just not valuable. You know what I mean? Like it's just like stable coins. the the stable coin in aggregate is trillions of dollars a quarter being transferred in value and if you put all the L1 blockchains together minus Bitcoin you're not even close to a trillion dollars. So like the usage of the chain has absolutely no bearing on the value of the native token. So um yeah I there's a lot of reasons why I find all coins highly uninteresting. Um and one of them is that I've just gone down this path and like no one's given me a good answer for how the native blockchain token benefits from being used. If EVM is being used on Robin Hood, great. Sounds to me like the tokenized stock is useful and ETH is kind of not that useful. But aside besides besides Robin Hood chain, there are a few examples of tokens and protocols that have introduced a sort of um uh mechanism which allows value from the usage of the protocol to the token itself through buybacks and burns. Like for example, what happens with Hyperlid where they buy back the token. um or also I I think that now also I think that now also other protocols like for example a and unis swap have introduced similar mechanisms. So that's precisely what you're talking about the value >> sure >> flowing to the to the actual token. So you >> I mean look um I'm sure that I have no doubt that there will be onchain businesses out there that find a way to make money during the bull market. No doubt right? However, the whole crypto ecosystem has been trying to make tokens valuable for more than a decade now and Bitcoin just destroys them cycle after cycle by simply sending, receiving, and holding. So, yeah. Um, I'm sure that there will be tokens that go up. I'm sure that there'll be tokens that find a way clever ways to fugazi money into the system. Fantastic. If they finally find product market fit, fantastic. Great stuff. Um, I just find it highly uninteresting. Honestly, I think also just yeah, I I I can't bring myself to care is where I'm at in my uh in my in my Bitcoin journey. >> And so you hold no altcoins? >> Zero for many years now. >> And now a final question for you James. So regarding the mechanisms that the tools that we have in order to to interpret the market. So we usually have been using the 4year cycle as this sort of compass and in a in in a recent post you were saying that the 4year cycle as a compass has broken >> and now essentially we need a better compass to measure interpret the market. So what that new better compass look like to you? >> Yeah I mean look my my simple view and it's kind of it's a bit philosophical. If you're relying on Bitcoin to guarantee that on, 150 days from the bottom, it will top and then one year after the bottom it will bottom. Eventually, if you're using the calendar and pretending that that drives what the market's doing when it doesn't do that thing, you're going to be looking around being like, "But what happened? What happened?" And I think there's a lot of people right now who are thinking, "Hey, what happened?" And I know this because I've had messages from people saying, "Hey, what do I do?" because I thought it was going to bottom in October. By the way, we're not in October yet. So, I'll I'll allow the market to run through October before I, you know, claim any victories. But if the market doesn't bottom in October, there's a lot of people who are saying, "I didn't buy anywhere near as much because I was focusing on that one thing." And that's my point. My point is, can you explain the mechanism, the mechanics, the market structure that causes the bottom to be exactly one year after the top? No one has a good answer for this aside from my my four-year cycle, my calendar. So, my perspective is what do I look? I look at show me when the investors who bought the top and are going to be the sellers. People who buy the top don't know that they're about to be sellers. The bare market forces it out of them. So, show me when we get enough pain, price below people's cost basis, enough coins in loss, enough unrealized losses, enough people looking at their portfolio going, "What am I doing with my life?" and then they sell everything. Now I've got a realized loss event. I've got a capitulation. Now I want to see some time. I want to see some grind. Then I get the final capitulation in July. To me, I have all of the pieces of the puzzle that I'm looking for that describe a bottom. Now I'm going to look at the clock right and the calendar. I don't use the calendar and say, "Well, I assume that people are going to capitulate in October." It's like, no, but what if they capitulated in July? So really the the compass it's not really even there's no like specific tool to use it. You can use TA to do this. You can do all sorts of things but find something that is like mechanically sound that you can something that you could explain to someone with a university degree and they'd be like yeah that actually makes sense. If you just say that like October is when we bottom because we always bottom in October. It's just kind of it's guys really when it breaks you're going to be looking around going what happened? You're going to be confused. So just don't be confused by not relying on something that was never working in the first place. Um try to now if we started to see bottom signals and we haven't seen the capitulation and it was today September then yeah maybe it was going to bottom in October and it may well be that we get the capitulation but I in my view we've already seen the things that need to happen to form a bottom. It just happened in July and February. So that hopefully that answered the question, but yeah, I think anchoring to the four-year cycle is a mistake because there's no mechanical reason for it to happen. And therefore, when it doesn't happen, you're always going to be confused going, "Well, now what do I do?" Ask, "Well, now what do I do?" Long before your compass breaks, right? It's like a broken clock. It's right twice a day. Um, just assume it's broken and find something better. >> But you still believe that Bitcoin behaves according to a sort of cyclicality. >> Everything is cyclical. I mean, humans are cyclical. the weather is cyclical, polit election cycle, everything has a cycle of some form. Um, and yes, Bitcoin's had this like four-year general cadence, but the date on the calendar is not the thing that drives the market to do the thing. So, you can say, hey, look, we're getting towards, you know, for example, why do we top, you know, 150 days after the peak? Because that's how long people like bull markets have a lifespan. every bull market, no matter if it's gold, equities, Bitcoin, everything, everything can only go up for so long before it needs to unload some of that energy to the downside because otherwise you just end up in a hockey stick vertical line and like you go to infinity. So everything needs to take a take a breather, take a break. So look for the signs that the market's exhausting itself, right? When I see lots of hodlers selling, that to me is a topping signal. when the top happens is now somewhere within the realm of like you know the next period of time but when I'm seeing the mechanics that put a top in then I'll start saying all right well maybe we now check the date and how long oh it's been we've been going up for 3 years I wonder if that's like how long people can sustain this thing for so rather than just being like it's going to be three years of bull one year of bear hodlers will buy the bottom they'll hold until we get to alltime high they'll sell heavily from there on eventually will oversaturate demand. The people who bought will then start to panic as the market goes down. They will capitulate. The hodlers will buy. Rinse, repeat. So, that's the general cycle that we're looking for. Look for the evidence, not the calendar. >> Okay. Yeah, I think that was uh that was interesting. >> And um yeah, thanks again, James. It's always a pleasure to see you on our show. >> Thank you, mate. Thanks for having me on. Hopefully, uh people took something slightly different away.