Trader Abandons $173k Bitcoin Call For New $35k Target

Key Concepts

Market Volatility: Significant price swings in financial markets, particularly in digital assets like Bitcoin.
Bull Market vs. Bear Market: A period of sustained price increases (bull) versus a period of sustained price decreases (bear).
Sentiment: The general attitude or feeling of investors towards a particular market or asset.
Euphoria: An extreme state of happiness and excitement, often seen at market tops.
Manipulation: The act of influencing market prices through artificial means.
Hard Assets: Tangible assets like gold and silver, often seen as safe havens during economic uncertainty.
Spot ETFs: Exchange-Traded Funds that track the price of an underlying asset, in this case, Bitcoin.
Whales: Individuals or entities holding a large amount of a particular cryptocurrency.
Altcoins: Cryptocurrencies other than Bitcoin.
Total Value Locked (TVL): The total value of assets deposited in a decentralized finance (DeFi) protocol.
Trading Plan: A set of rules and strategies that a trader follows to manage their trades.
Strong Convictions Held Loosely: A trading philosophy that emphasizes having strong beliefs about market direction but being flexible enough to change them when evidence suggests otherwise.

Market Snapshot and Bitcoin's Downturn

The market is currently experiencing significant volatility. Gold is holding steady around $4,100 per ounce, and silver is defending the $50 mark, trading just above $51. In contrast, Bitcoin is showing a breakdown, falling below $104,000 and testing $103,000. This follows a substantial market wipeout of $340 billion in the previous month.

Aaron Disher's Pivot: From Bullish to Bearish Bitcoin

Aaron Disher, co-founder of The Better Traders, has made a significant pivot in his market outlook. Just six months prior, he was on the show predicting a Bitcoin top at $173,000. This morning, he emailed to revise his target to $35,000 for the upcoming year.

Previous Bull Case and Failed Expectations

Disher's previous bull case in May was conditional on an "exuberant altcoin pump," which he believed indicated the top hadn't been reached. This pump never materialized, and the market topped out approximately $47,000 below his target. He attributes the failure of his model to the absence of euphoric sentiment, suggesting a structurally weaker bull market compared to 2021.

Similarities and Differences with 2021

Disher notes similarities between the current market and 2021, including a massive rally in late 2020, a subsequent 50% Bitcoin drop in March/April, a bear market summer in 2021, and a market comeback. He also points to a significant liquidation event on October 10th and the "Terra" (likely referring to Terra/Luna) collapse in April as contributing factors to price drops. However, a key difference he highlights is the lack of euphoria and the "radio silence" from many market indicators that typically signal a top.

Transition to a Bear Market Mindset

With November being his previously identified period for Bitcoin to potentially top out, Disher is now pivoting with the mindset that a bear market is entering. Despite not hitting his previous targets, he emphasizes sticking to his trading plan.

The Broader Macro Trade and Bitcoin's Potential Manipulation

Disher suggests that if the "Bitcoin long" is considered dead, traders are seeking new opportunities. His primary trade now involves a bearish outlook on Bitcoin, with a target of $35,000.

The "Max Pain" Scenario

He entertains the idea of a "max pain" scenario where Bitcoin could rally back up to create a FOMO (Fear Of Missing Out) rally, potentially above $127,000, before experiencing another significant dump, this time going even lower. This scenario suggests a year dominated by manipulation, driven by political or financial stress.

Market Sentiment at Token 2049

Disher recounts his experience at Token 2049 in Singapore, where, even when Bitcoin was around $16,000-$17,000, the majority of traders expressed a desire to exit the market and were preparing to sell. This widespread sentiment of exhaustion suggests to him that the market is indeed close to being done.

A Final Push and Altcoin Rally

He believes that one more push to the upside, even above $127,000, could trigger short-term FOMO and chaos, leading to an exuberant altcoin rally to close out the year, only to be followed by a significant dump next year.

Gold and Silver as Safe Havens

Disher acknowledges his previous characterization of gold as a "super boring asset" but admits when he is wrong. He observes gold's stability around $4,100 while Bitcoin collapses, suggesting the "boring trade" might have been the right one.

Admitting Mistakes and Market Flexibility

He criticulates traders who stubbornly stick to their positions, emphasizing the importance of adapting to a liquid market that moves in both directions.

Gold's Unexpected Strength

Disher notes that while he saw signals for gold to continue rising, he did not anticipate it and the stock market pushing higher while leaving crypto "in the dust." He describes the year as a "musical chairs" where crypto has consistently been disadvantaged.

Outlook for Gold and Silver

While acknowledging that gold and silver are overbought and in all-time high territory, Disher does not believe they are done. He expects them to trade sideways for a while. The significant pump in gold this year is attributed to geopolitical and global financial stress, creating uncertainty that drives demand for safe-haven assets.

Bitcoin vs. Gold as a Store of Value

Disher contrasts this with Bitcoin's original narrative as "digital gold" and a resilient asset. He points out that Bitcoin, like other assets, was not immune to liquidity attacks during the COVID crash. For those seeking a safer, more stable long-term asset, gold and silver are considered good bets, even with potential drawdowns.

The Michael Sailor vs. James Chanos Debate

The discussion touches upon the contrasting views of Michael Sailor, who continues to buy Bitcoin, and James Chanos, a legendary short seller who has closed his short on Sailor's company.

Sailor's Resolve and ETF Hype

Disher expresses shock at Michael Sailor's resolve and commitment to his Bitcoin strategy. However, he questions the efficacy of the hype surrounding spot ETFs for Bitcoin, Ethereum, and Solana, noting that these have not significantly pushed prices up.

The Insufficiency of Whale Buys

He argues that even massive buys from individuals like Sailor are not enough to prop up the market. A global retail euphoric event is needed for Bitcoin to surge higher.

Shifting Holder Base

Data from resources like Glassnode shows a decline in holders with 10,000+ Bitcoin since BTC hit $100,000 a year ago. Conversely, smaller wallets holding less than 0.01 BTC have been steadily increasing. This indicates a "strange change of hands" where whales are taking profits, while smaller holders are accumulating.

The Four-Year Cycle vs. Business Cycle

Disher dismisses the idea that Bitcoin's rallies are solely based on quantitative easing or the business cycle. He firmly believes in the four-year cycle and criticizes those who pigeonhole Bitcoin as solely driven by the US market, ignoring global trading, investing, and mining activities.

The Erosion of Bitcoin's Ideological Foundation

The conversation delves into whether Bitcoin's narrative is shifting from an ideology of sound money to a high-beta tech trade.

From Outsider Money to Wall Street Product

Disher agrees that Bitcoin has transitioned from an outsider money concept to a Wall Street product. This shift signifies an identity crisis rather than just a bear phase, as idealists are replaced by institutional players.

The Rise of Quick Buck Seekers and Exit Liquidity

He notes the influx of individuals seeking quick profits, which is a natural part of a free market. However, he highlights the role of decentralized exchanges and new company coins where many become "exit liquidity," leading to losses. Examples include the memecoin craze on Solana and Pump.fun.

The Original Vision vs. Current Reality

Disher references existential posts online questioning if the original focus on technology, privacy, and freedom has been lost. He recalls speeches by Andreas Antonopoulos, who predicted Bitcoin's potential to fall into government hands, be controlled for price manipulation, and lose its original purpose as a free market tool and lifeboat.

Altcoin Market Dynamics and Selective Rallies

Disher discusses the current altcoin market, noting that while Bitcoin is rolling over, altcoins are typically hit harder.

Capital Rotation and Thinning Liquidity

He observes capital rotation and thinning liquidity, leading to collapsing project valuations.

The Privacy Coin Surge

A peculiar trend is the surge in privacy coins like Zcash, which has seen an 800-900% increase in two weeks, followed by other privacy coins. Disher finds this unusual as there's no apparent fundamental development driving these pumps, suggesting whale manipulation.

A Selective Altcoin Season

Disher predicts a "selective altcoin season" rather than the broad mania seen in the past. He expects money to flow into altcoins but for this rally to be short-lived, potentially ending by mid-December.

Profit-Taking Strategy

His strategy throughout this period is to take profits on the way up and protect his portfolio at all costs. He anticipates a significant drawdown next year and aims to be well-positioned to buy Bitcoin at a steep discount around November 2026.

AI and DeFi Narratives in Altcoins

Disher acknowledges that while not a broad mania, some altcoin pumps are tied to AI tokenized assets and new DeFi narratives.

Pumping of Older/Unused Projects

He notes that older or previously overlooked projects are starting to pump, citing Uniswap's 50% surge followed by Sushi Swap and Pancake Swap.

One-and-Done Narratives

Disher believes that in crypto, narratives are typically "one-and-done." Previous memecoin seasons are unlikely to repeat in the same way. The coins that will pump are either forgotten ones or those that never had their chance.

Identifying Leaders

The key is to identify the leader within a narrative, as seen with Zcash in the privacy coin space. Once a leader shows strength, other coins in the same category tend to follow. He recommends using tools like CoinGecko to find these coins.

Ethereum's Outlook and Disher's Skepticism

Disher expresses skepticism about Ethereum, particularly due to its floating currency nature and the potential for inflation, unlike Bitcoin's fixed supply.

Disagreement with Tom Lee's Predictions

He disagrees with Tom Lee's overly bullish and fluctuating price predictions for Ethereum, finding them unrealistic.

Ethereum's Struggle to Break $4,000

Despite Ethereum's high Total Value Locked (TVL) and frequent usage, its price has struggled to break above $4,000 for the past two years.

Preference for Low-Cap Gems

Disher would rather focus on low-cap gems with the potential for 5x-15x returns in a short period, rather than investing in Ethereum, which he sees as having proven to be volatile and lacking significant upward momentum.

Bottom Line: Staying Solvent and Smart

For traders watching, Disher's advice to stay solvent and smart is:

Take Profits: Secure any amount of profit, even if it's less than initially desired.
Stick to Your Trading Plan: Maintain discipline and flexibility.
Embrace "Strong Convictions Held Loosely": Have strong beliefs but be ready to let them go quickly if the market moves against them.
Prioritize Portfolio Preservation: Saving your portfolio is more important than saving face.

Disher reiterates his bearish outlook for Bitcoin, with a target of $35,000 by next year, and highlights the importance of adapting to market movements.