Ivan on Tech analyzes Bitcoin's decline and market conditions, with commentary on altcoins and related news
Ivan on Tech delivers a solo market update on Bitcoin's price drop below the 200-week moving average, altcoin conditions, and a Zcash vulnerability disclosure.
Summary
Ivan on Tech presents a solo market update focused on Bitcoin's decline to around $61,000, breaking below the 200-week moving average. He argues that a V-shape recovery is unlikely and that the market needs a period of sideways grinding and emotional capitulation before a new bull run — which he expects to begin in Q4. He also covers a significant Zcash security vulnerability discovered by an AI tool, which caused a 25% price drop, and comments on Tom Lee's BMR preferred stock offering and its 9.5% yield. The episode closes with a brief reaction to MicroStrategy's (MSTR) chart, which had dropped to $96.
Key Takeaways
FULL TRANSCRIPT
Bitcoin Falls Below the 200-Week Moving Average
Ivan on Tech: Welcome to another episode. As you can see, right now Bitcoin is going lower. Yesterday we were at $63,000–$62,000. Now we're at $61,000 — it went all the way down to $61,000. We are now getting below the 200-week moving average, which is fantastic. The 200-week moving average is the fair price of Bitcoin. It is the long-term average of the price. It is the best possible risk-reward. If you can buy around the 200-week, or ideally below it — and as you can see, our buy zone here actually expects us to go even lower — then likely it will take a few months of grinding to find a bottom.
There is going to be no V-shape recovery. I think that's very unlikely. People ask me all the time: what do you think about a V-shape? Are we going to go up fast? Normally after a fall you don't go up fast. You had one exception, which was the COVID dump, and everyone now expects the same thing each and every time we dump. That was an exception. You don't have a fast recovery in a market collapse. It never works like that. Instead, you need time to grind — to grind the souls, as we've been discussing — to ensure that everyone who is a bit concerned sells, everyone who thinks the bull market is back sells. We need all of that to happen. So the next step for the market is to find some kind of bottom and create apathy.
Currently, people are still so engaged. They follow along, they think we're going to recover. Maybe now people are giving up more, but we need to reach the state of apathy. That is very important.
Signs of Capitulation — But Not Yet Apathy
Ivan on Tech: This is what Chris Berniske is saying: that we have signs of early emotional capitulation. People are giving up. People are very sad. People are saying this is a dumb asset class, should have gone with AI, et cetera — which, by the way, is true, but the time for that was Q4 2025 when we went through risk-off in October. That was the time for that. Currently, it's actually time to be more and more bullish toward crypto. Not this very day, but in the coming weeks and months. It's time to really start taking bullish positions and just mentally be prepared for the next bull, which is inevitable. It is coming, and it's likely going to start in Q4.
So Chris Berniske is saying early signs of emotional capitulation are here, but we are far from apathy.
Taiki Mera bought the local top and blasted into it right at the local top before the big fat collapse — basically marking a lower high. He got excited at the lower high and blasted into all kinds of assets at the lower high. It's okay. I still love Taiki because he has humor. He's saying himself that he marked the local top. Big shout out.
Now, Bob Loukas did a post yesterday — I think he did a whole video — and he also said the business cycle indicator is the biggest cope in crypto. I fully agree, because this is how most people actually lost money in this industry during the last six months. If you think about the last six to eight months, how did most people lose? They thought that ISM, the business cycle, all this macro stuff was going to save them. Instead, they got super wrecked. Instead, you should have just watched the trends.
If you are on this channel, you know it. But if you're new — big welcome — you should know that here we have a no-BS approach. We look at the trends. If the trend is bearish, we're bearish. No matter what kind of business cycle or what kind of other nonsense people try to sell you, we're bearish. Just like when you have a bull trend, we're bullish. No matter what the bears tell you, if it's bullish, it's bullish.
Bitcoin's Path to Valhalla in Q4
Ivan on Tech: Currently, overall, Bitcoin is still in a bear trend. As you can see, we are entering very cheap territory for Bitcoin. You could start DCA-ing here. Getting nice cheap Bitcoin is fantastic. But ultimately we will have to flip bullish on the weekly, and when we do, that is the start of the Valhalla. That is the start of the Valhalla. It's very, very important, and you need to start thinking more and more bullish.
Here's what's going to happen with most people who have missed everything — who missed the chance to de-risk in Q4, who missed the time to sell altcoins in Q4. They are actually going to start flipping bearish. You're going to see many such people flipping bearish now in Q3 and Q4. But the bear market stops when the last bull is slain. We need to slay the last bull. All the loud mouths who were yelling that we're going to go to all-time high in May — they need to be fully liquidated and capitulated out of the market. And it's happening very quickly.
When all of them, or most of them, are bearish, that's when the bear market ends. And we will be there very soon. So mentally, you need to start preparing for the great big Valhalla, which is inevitable in Q4 and in 2027.
The coming weeks and months are going to be so critical. Just like we saw the final capitulation in November 2022, and then we had to grind — from November all the way to January, just grinding and grinding and grinding. This is where the souls get the final crush into very fine powder, so to speak, and then — boop — we're back. This is what needs to happen next. We need this sideways period. But during this time, a lot of opportunities are going to come up, and we're going to be covering all of it.
Tom Lee's BMR Preferred Stock and the ETH Yield Question
Ivan on Tech: We have Tom Lee copying MicroStrategy — exactly. Tom Lee is now doing a preferred stock offering, like his own Strategy, and it's going to have a yield of 9.5%. Everyone is asking: where is the yield coming from? I recommend everyone ask where the yield comes from. Where is the yield coming from, Tom? Where is it coming from?
Tom Lee did actually answer where the yield comes from. Let's listen to this reply.
The satirical audio clip plays: "You know how I'm down about $10 billion buying Ethereum. Listen, I have a plan. Don't worry. I'm going to offer a 9.5% yield on the BMR shares, and that's going to attract fresh liquidity into the BMR stock. And that is going to allow me to buy even more Ethereum so we can get out of this hole. I know it didn't really work for Michael Saylor, but don't worry — Ethereum has a 3% yield. And I know that's a little bit less than 9.5%, but don't worry. We could just sell some ETH in order to offset the gains. But don't worry, we might cause a death spiral in the process. But I'm not worried about that because before that happens, we'll just attract more fresh liquidity into the ecosystem and we'll keep pumping up the stock and then we'll be completely fine. BMR is going to the moon."
I'm also wondering where the hell the yield is going to come from. They need to raise money to buy ETH, and then if ETH goes up they can pay the yield. They need to have some cash reserve. Maybe it's going to work out — if ETH pumps, it's going to work out. But they will have to sell ETH. I mean, if ETH goes up they will have to sell ETH, or sell stock, or find some other way of getting USD from their ETH. There are many ways to do it — they can borrow against it, they can sell stock again. There are many things they could do without selling it directly. But it is going to require a lot of gymnastics. Moving on.
Zcash: AI Discovers Critical Vulnerability, Price Drops 25%
Ivan on Tech: We have urgent news for Zcash. Zcash dumped a lot — nuked 25% — on the announcement that AI found a critical vulnerability where it was possible to mint new coins.
Here's the problem with Zcash: it's private, so no one knows if it got exploited. It is considered unlikely that it got exploited, but it could have happened. There could be a bunch of Zcash that has been minted without anyone knowing. And also, as you know, we follow the trend. Even though we love Zcash fundamentally, as soon as it goes into a bear trend — which it currently is doing — if you look at, for example, the 12-hour chart, it's best to just let it figure itself out and be outside of this drama for now. That is the better system than trying to be part of it and guessing whether it's going to recover or not.
Ever since this news — look at the hourly — boom, boom, boop, bear trend. Daily goes to bear trend. Let's see what's going to happen. All in all, we don't know the full situation because it's by design private. No one knows how many coins got minted.
Something that's interesting in terms of seeing it as a potential buy-the-dip opportunity is the volume. On the daily, you see this kind of volume spike. Normally when you have big volume capitulation, it is a local bottom. Let's see how this plays out. But again, it's bearish, so you've got to be careful.
What happened here is that Zcash actually hired a guy named Taylor Hornby to do analysis. They told him: listen, do analysis, see if there is any bug. Taylor Hornby basically pulled up Opus 4 and Claude. He bought a Claude subscription and then asked Claude: "Can you find something?" And Claude said: "Yeah, I found a vulnerability. You can mint Zcash."
The issue has been present in the code since 2022. So the biggest unknown — and this is why the price is dumping — is: could someone since 2022 have just sat there and minted a bunch of Zcash, and it's impossible to see? That is the biggest unknown. And you know, it's good and bad with Zcash, but there's no way to know how many coins exist or where they are. It's private.
The response: fully disclosed and fixed. Now it's fixed. Obviously it's fixed. But it is unprovable — we cannot prove that it didn't get exploited. It is considered unlikely by the experts in the industry. A new shielded pool plus a turnstile for verified supply is being implemented. Hopefully there will be a clearer picture in the coming days.
The actual team did the research themselves, and their report is what caused the dump. Once the report came out and people saw that AI had found a vulnerability that had existed since 2022, the market panicked.
From the Shielded Labs report: after viewing Taylor's report and discussing the implications of the vulnerability internally, Shielded Labs believes it's important to provide additional context. The vulnerability could have been exploited to undetectably create an unlimited amount of counterfeit Zcash within the Orchard shielded pool. Theoretically, someone could have minted a bunch since 2022, and it's impossible to know. There is no way to cryptographically prove whether the vulnerability was exploited before it was remediated. However, a network upgrade is in progress.
Stop-Loss Discipline: The Zcash Lesson
Ivan on Tech: When you have such a collapse — something out of nowhere happens, boom, big fat spike down — this is yet again where the mechanical rules come into play. With the mechanical rules, you always have a stop-loss. Always, always, always, always, always. It's the first thing you learn: always stop-loss. No matter what else you do, always stop-loss.
Most people don't have a stop-loss. They think they're smarter than the market. If you think that only dumb people need a stop-loss, you're going to lose. Very important. Because as you know, we look at the price — the price is the number one source of truth for us, no matter the fundamentals. Encrypted Bitcoin, it's all great. And by the way, it is a shame that this happened to Zcash because we had such a nice narrative for the next bull with the encrypted Bitcoin theme. But still, even with great fundamentals and a great project — always stop-loss. Always, always, always. So when this kind of stuff happens, boop, you're out. You have a stop-loss, you're out. Very important. And when you're in profit, you can move the stop-loss to entry.
Altcoin Roundup: Hyperliquid, Solana, ETH, BNB, Avalanche, and More
Ivan on Tech: Let's look at some coins on the daily. Hyperliquid is potentially now getting into a bearish daily trend, so be careful here. All of the coins are great, but when Bitcoin dumps, gravity pulls everything. So even the great coins on the daily are now starting to enter bear trend. On the weekly, Hyperliquid is still bullish — depending on whether you trade the weekly or daily, you have signals there.
Then let's check Solana. Is it going to $30? Seems like it. It was $68 yesterday, now it's $64. It broke below this low right here and is now heading home to the $30s. If someone works at the Nobel Prize committee, please let me know — can we apply? Because we predicted $30 back in January. I have all the receipts. I have all the tweets. Wouldn't it be cool if the Nobel Prize in economics went to us this year? If it goes to $30, it is one of the craziest bearish predictions that came true. In terms of a bearish altcoin call that you could have shorted the crap out of — which many people in Bulmania have done — it would probably be the craziest. But let's see. It's kind of heading there.
ETH — what's happening? ETH taking a nosedive. Volume is big, but not too big. For a local bottom you'd want to see crazy volume. It's quite big, but comparing to previously we had even bigger. ETH is still just consolidating sideways, basically.
BNB — looking okay. It's bearish, but in comparison to ETH and everything else, it's still holding these highs from 2024.
Avalanche — new all-time low. A lot of these all-time-low coins are now breaking down. They've been holding the all-time low level, and now they're breaking down into the abyss. There is no support. There is nothing there. You just fall into the abyss. It is an all-time low and the candle looks like this — it's fully red and flat at the top. When it's an all-time low and the candle is basically fully flat with no wick, you basically live in history. No one before you has had such a big loss in this coin. So you can look at yourself as a historic individual. Everyone who holds Avalanche right now is a historic individual — this thing has never been so low.
Tao — still derping around. Nothing too interesting.
Sui — going toward the support we have here. $0.50 is the next support. Going to go there most likely.
Pump — bearish tone, going to go bear.
MicroStrategy Chart Reaction
Ivan on Tech: Someone in the chat asks: "Ivan, do you think Saylor is a systemic risk? And do you believe he needs to increase the dividend of Strategy to make it more lucrative for investors?"
Let's check the Strategy chart. Oh. Holy crap. It's at $96. I missed this dump — it happened yesterday. Holy macarons.