Lyn Alden: Bitcoin Sell-off - The End Is Close, Trump’s Buying Strategy! Massive Update

Summary

In this video, Lynn Alden offers a deep dive into the current Bitcoin market, analyzing recent price dips, liquidity factors, and long-term trends. She discusses the potential impact of U.S. president Donald Trump's Bitcoin reserve plan, emphasizing the correlation between Bitcoin's price and market liquidity. Alden also highlights key on-chain metrics and how they suggest Bitcoin might see higher values over the next 12-18 months. Despite some uncertainty in short-term price movements, Alden’s analysis suggests a bullish outlook, with Bitcoin likely benefiting from increased institutional interest and strategic reserve decisions.

Takeaways

• 😀 Bitcoin’s price dipped below $100,000 in February 2025 and struggled to rise back above that level, despite growing interest from larger investors.
• 😀 Long-term Bitcoin holders are selling some of their coins for profit-taking, rebalancing, or consumption, but the selling wave hasn't reached levels seen at the end of major bull markets.
• 😀 Lynn Alden suggests that Bitcoin may still have room to rise over the next 12-18 months, based on current trends and metrics.
• 😀 The US government might consider creating a strategic Bitcoin Reserve, though there is skepticism around its size and impact on the market.
• 😀 The US Treasury has the ability to revalue gold holdings and use the resulting liquidity to buy assets like Bitcoin, a mechanism that could support Bitcoin prices.
• 😀 Bitcoin’s price is closely correlated with liquidity in the market, and a potential liquidity strain in 2025 could put downward pressure on Bitcoin.
• 😀 Onchain analysis shows that Bitcoin’s market capitalization is still aligned with its onchain cost basis, suggesting the market isn't near a top yet.
• 😀 There is currently no large-scale selling from long-term holders that typically signals a peak in the market, indicating Bitcoin still has upward potential.
• 😀 The US has relatively low reserves compared to other developed countries, making it possible for them to increase reserves, including Bitcoin, over time.
• 😀 Alden remains cautiously optimistic about Bitcoin's future, but she emphasizes the need to monitor key metrics to assess risk, particularly as we approach late 2025 or 2026.

Q & A

What factors might be driving the recent selling wave in Bitcoin?

The selling wave in Bitcoin could be driven by long-term holders taking profits, rebalancing their portfolios, or increasing their consumption of other assets. However, this selling activity has not reached the level typically seen at the end of major bull runs.

Why is liquidity considered important for Bitcoin's price prediction?

Liquidity is a key factor in predicting Bitcoin's price because it significantly influences its market dynamics. Alden found that Bitcoin's price is strongly correlated with liquidity, meaning that changes in liquidity levels can have a direct impact on its price.

What does Alden think about the potential creation of a US strategic Bitcoin reserve?

Alden expresses skepticism about the scale of the US strategic Bitcoin reserve, suggesting that while it could surprise to the upside, she generally believes the reserve may not be as large as some expect. She speculates that if the US government decides to acquire Bitcoin, they might do so quietly before any public announcements.

How might revaluing gold help the US government increase its reserves?

The US government could increase its reserves by revaluing its gold holdings. Currently, the gold is booked at an outdated price, but the Treasury could adjust the value to the current market price, unlocking substantial funds which could then be used to acquire assets such as Bitcoin.

What role do on-chain metrics play in understanding Bitcoin's market?

On-chain metrics, such as the market capitalization compared to the average cost basis of coins on the network, help track market movements. These metrics are useful in identifying overbought or oversold conditions and have been effective in indicating previous multi-year tops in Bitcoin's price.

How does Alden interpret the current market for Bitcoin over the next 12 to 18 months?

Alden believes that Bitcoin is likely to experience price increases over the next 12 to 18 months, provided that certain metrics do not show signs of excessive risk or overvaluation, which might become more apparent later in 2025 or into 2026.

What does Alden think about President Trump's potential influence on Bitcoin?

Alden is uncertain about the extent to which President Trump will actively support Bitcoin, especially regarding a strategic reserve. While some speculate that Trump may push for a Bitcoin reserve, Alden remains cautious and skeptical about the scale and timing of such a move.

What could be the broader economic impact if the US were to boost its reserves with Bitcoin?

If the US were to increase its reserves by purchasing Bitcoin, it could lead to a significant shift in global financial dynamics. This move could boost Bitcoin's value and increase its legitimacy as a reserve asset, potentially impacting the broader economy and financial markets.

Why has Bitcoin been struggling to maintain a price above $100,000 in February 2025?

Bitcoin has faced challenges in maintaining a price above $100,000 in February 2025 due to a combination of market dynamics, investor sentiment, and broader economic conditions. Despite growing interest from large investors, Bitcoin has failed to regain upward momentum after dipping below $95,000.

What would be the potential consequences if Bitcoin's market cap disconnected further from on-chain cost bases?

If Bitcoin’s market cap disconnects significantly from the on-chain cost bases, it could signal a potential market top, indicating overvaluation. Historically, such disconnects have marked the end of major bull runs, which could lead to a market correction if these trends continue.