12 Bitcoin Charts, One Painfully Obvious Conclusion | Rational Root

Rational Root (0:00)

Really looks like the bottom is in. You know, AI with fiat, it just means that governments get away with a lot of money printing due to all the efficiency increases of AI.

Ben Perrin (0:08)

Thoughts on basically the diminishing returns thesis. If that means at some point in time, we would expect the spiral chart to break.

Rational Root (0:14)

I mean, it just shows how the four-year cycle is starting to break.

Ben Perrin (0:17)

What is the new cohort that's just like, I'm ready, I'm holding for the long term, I'm not changing it, you're not going to scare me out of my position.

Rational Root (0:23)

A lot of value can actually flow into Bitcoin because of the abundance that AI will bring. But how fast can that come? Meaning that within practically like the next six months or so, we could maybe see an ultimate high. All right.

Ben Perrin (0:36)

Good morning, Root. Thank you, Switch, for joining me today. Very excited to have this conversation to see what kind of charts and figures you have on hand. So I know that you are neck deep in the Bitcoin data and analysis. So first and foremost, kind of what's top of mind? What has your attention right now?

Rational Root (0:51)

Yeah, thank you so much for having me. Really excited for this conversation. And if you have any questions, let me know. I got some charts lined up to kind of explain what is going on from my perspective or from an on-chain perspective, from a cycle perspective and even a bit of macro. So I'm by no means a macro expert, but it's an important perspective that has a lot of influence on Bitcoin. And so I do take a deep look at it as well.

So yeah, we can maybe just jump into the charts when you're ready.

Ben Perrin (1:24)

Let's do it. Let's get into the charts. Let's see what you brought today.

Rational Root (1:27)

Yeah, so I just thought maybe it's like practical to start with price action. Currently, like what's happening? You know, I got here the Bitcoin price shown from the all time high, basically the whole bear market. So we make the bottom.

And so we had that breakthrough through that short-term holder cost basis level. I don't know if your audience is probably familiar with the short-term holder cost basis, or should I even explain that? I don't know how deep I should go. A little bit.

Ben Perrin (1:52)

Let's give them a quick rundown. My understanding is the short-term holder cost basis is looking at about a five-month holder. Is that the threshold?

Rational Root (1:59)

Exactly, yeah. And so it's more of an active holder, and so they are more influenced by current price action.

And so they're mostly the most active coins in the market. And so that's why they're very interesting, and especially their entry price, which is also shown here in the chart. As you can see in the bear market, we tend to have a lot of resistance below just right that short-term holder cost base. And that is because investors get to like break even level. So when they're at a loss and they get to break even, they sometimes step out of the market and that pushes Bitcoin down even further. And so that's what we tend to see. And so that breakout above the short-term holder cost basis was for me really the first bullish sign to like, oh, we're back in a bull market. And so I would like to call this movement even also the, it's really the short-term holder cost basis breakout. It's this hockey stick here.

And so there was quite a lot of momentum behind that move. And if you think of the four-year cycle, so we were basically four months early with that move, and I'll get a bit deeper into that in some of those dynamics in a bit, but if you looked at the momentum, how we pushed through that short-term holder cost basis, that was the day I became a bull.

Yep.

Ben Perrin (3:12)

Okay, okay. Now it almost looks like it got a little bit retested there too. Is that something else or is that too far off of the short-term cost basis to be of any relevance?

Rational Root (3:21)

Yeah, we actually got resistance here at the ETF cost basis, which I'll get to in a bit as well. But maybe first, let's discuss the second chart, which I have, which is a bottom comparison. Because so as I said, we were four months early in making that bottom this cycle. And so is this time different, right?