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☕ Bitcoin’s in the blender - and why the smart money loves this recipe!

Dec 02, 2025

Howdy! 👋

Contrary to what many investors and traders think, it's not enough to find hot stocks or invest with conviction these days.

Knowing "how" the markets work is critical to your success.

Especially when it comes to crypto.

Bitcoin, in particular, has been pounded to smithereens lately, having dropped 31.7% since October highs of $126,210 to last night’s close of $85,240.

Most folks have no idea why.

Fewer still what to do next and how to turn lemons into lemonade.

Seems to me that we've got an ideal teaching moment on our hands.

Here's the skinny (and my playbook)

1 - Bitcoin is still a high-beta, leverage-soaked risk asset

This means it thrives on cheap money and dies when it gets expensive.

And what drives that?

The U.S. 10YR Treasury.

Yields have been climbing – which means money is getting more expensive - since mid to late October, roughly when the current selloff started before accelerating. 

Big money always derisks when that happens with the most speculative schtuff getting sent to the woodshed first. 

Keith's investing tip: “When money gets tight, tourists go home first.”

2 - More institutions = more leverage at scale

The last run higher brought enough ETFs, structured products, prop desks, and basis trades to light up Vegas. Carry trades, perpetual futures, basis trades, structured products, billion-dollar margin books on centralized exchanges… all of it. 

Then, when funding blows out, collateral values drop or the vigorish (from borrowing all that money to trade keyed on the 10YR yield) gets too much, forced unwinds hit like a sledgehammer. 

Liquidations cascade.

Selling becomes a stampede rather than an orderly exit. 

In other words, leverage works great… until it works all at once in reverse. 

The institutions almost never sell a little but would rather sell a lot than risk being the ones left holding a proverbial hot potato.

Keith's investing tip: Watch liquidation levels like a hawk. When you see multi-billion wipeouts on exchanges, that’s usually your pre-rally tell. The smart money knows and now, you do too. 😎

3 - Liquidity hierarchy never lies

When the you-know-what hits the fan, the big money sells what they can rather than what they want to.

U.S. Treasuries, blue-chip stocks, and the dollar are at the top of that list.

Crypto is near the bottom, which is why it never gets spared.

The real problem? 

Aspiring traders and investors who don't grasp what we're talking about today keep trading the narrative when they should be trading the plumbing.

It's human nature.

4 - Every cycle needs a myth and crypto is full of 'em

The stories just change costumes. 

One cycle it’s “institutional adoption will save us,” the next it’s “ETFs guarantee a floor,” then it’s “halving cures all sins” or some political variation of “crypto-friendly.”

My point is that these narratives feel good, travel fast, and give aspiring, unsuspecting traders something to believe in even when the warning klaxon is blaring. 

My experience is that myths don’t move markets.

Money does. 

Not even the shiniest narrative can stop a margin clerk with a sell button when the money dries up.

Pick your poison.

Just know it's the same movie, different year.

It’s also predictable and potentially very profitable for those who know what they're doing.

So learn dang it!

5 - Bitcoin isn’t broken — but a ton of traders are now

That's the real opportunity.

Always is.

The scared money almost never makes money but those who stroll in like a boss almost always do when they know what they’re doing.

That’s the point.

You’re just renting someone else’s downside if you don’t respect how the machine actually works — rates, leverage, liquidity, forced selling, etc.

Note: Btw and if you’re an OBAer, please check your email immediately for a special alert I sent out earlier this morning related to today’s 5 with Fitz – and a new recommendation to capitalize on the latest round of crypto chaos.

And if you’re not an OBAer but have found today’s nugget helpful and interesting, you can learn more about One Bar Ahead® here. People tell me regularly that it’s changed their lives and helped instill a calm confidence they’ve never had before.