The Breakdown - Bitcoin’s Bottom Watch Begins

Episode Date: November 20, 2025

Bitcoin’s brutal drawdown has traders asking whether the market finally found its bottom, with price testing $90K multiple times, sentiment crushed into extreme fear, ETF flows bleeding out, futures slipping into backwardation, and institutions stepping back; in today’s episode NLW breaks down the case for and against a bottom through technicals, macro shifts, leveraged positioning, while also covering Kraken’s $800M fundraise with Citadel involvement, Tether’s strategic investment in Ledn, new OCC guidance allowing banks to hold crypto for gas fees, and the first slate of Solana ETFs launching into choppy markets. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/@TheBreakdownBW Subscribe to the newsletter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://blockworks.co/newsletter/thebreakdown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownBW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Wednesday, November 19th, and today we are desperately asking, is the Bitcoin bottom in? Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. Well, friends, price action is gloomy, but Bitcoin saw a slight bounce on Tuesday, leading some to ask if the bottom might just might be in. After trading below $90,000 on Monday night, Bitcoin staged a relatively mild recovery during Tuesday's trading session. The price reached a high

of almost $94,000, but quickly rolled over. The $90,000 level was tested again overnight, and heading into Wednesday, it was around $90,000. Not hugely confidence-inspiring, but at least Bitcoin found some support instead of crashing through another key level. Demand is still looking very weak. The Coinbase premium is currently negative, which usually indicates that U.S. institutions aren't in the market. ETF flows are telling the same story, with another 370 million worth of outflows yesterday to make it five days in a row.

Bitcoin futures markets just flipped into backwardation for the first time since March, meaning the December price for Bitcoin is now below the spot price. Sentiment remains at a low with the Fear and Greed Index jammed at extreme fear. Never wanted to miss an opportunity, Bloomberg called this the Great Bitcoin Crash of 2025, writing, once promoted as a high-growth play, an inflation hedge, and a portfolio diversifier, the world's largest cryptocurrency now faces the prospect of ending the year in the red, without fulfilling any of those roles. For those I've seen a few cycles, this is nothing new, and many are still calling this a correction

rather than the end of the cycle. Raul Paul of Real Vision wrote, I wanted to put the current sell off in perspective. Bitcoin corrected 32% in 2024, 32% earlier this year, and right now is around 28%. This is normal you've lived it before. Technicals are flamboyantly oversold. Sentiment is in the toilet too, worst I've seen it this cycle. Vijay Boyapati commented,

Is this the start of a Bitcoin bear market? Certainly possible, but it's also important to remember that this correction is still down in the normal range for bull market corrections, about a 30% drawdown. When everyone in their dog is dancing on the grave of Bitcoin, don't join them. Tom Lee went on CNBC and commented that the flash crash and Fed rate cuts being taken off the table are weighing on markets. He said, I think that's all creating this downside pressure. But I think the good news is that there are signs of exhaustion.

I did speak with Tom DeMar of DeMarre of DeMara Analytics, and he thinks there are signs that would look like a bottom that could be occurring sometime this week. BitWiCIO Matt Hogan commented that his base case is that Bitcoin is near the bottom, but he added, the other theory is Bitcoin is a leading indicator and the whole market is nuked. We're not really seeing the full-throated bottom calls that you might expect to see after a painful crash, but some investors are starting to make quiet moves. Whale selling was blamed by many for triggering the sell-off, but the numbers have

actually reversed. Bitcoin whales have been net buyers for the last week of October, and the number of wallets holding a thousand Bitcoin or more is at four-month highs. Tracy Schuart, the senior economist for Ninja Trader, put out a comprehensive analysis of the drawdown that went viral on Twitter. Her key point was that Bitcoin ran up from $40,000 to $126,000 on the narrative of institutional adoption plus Fed easing. Traders also levered up on the basis of a prolonged bull run. Once the Fed began unwinding expectations of further rate cuts, the thesis was broken and Bitcoin fell precipitously. She concluded, The critical insight everyone is missing. There are no natural buyers at these price levels.

Institutions are rebalancing away from risk assets. Long-term holders are waiting for lower prices to re-buy. Retail got scared off by the violence of the move. And new buyers won't step in until the leverage gets fully flushed and price stabilizes. She called it a textbook de-leveraging and said, the real question is what price level actually clears the market and brings in genuine buyers rather than leverage speculators. That's still being discovered. And that's where people are hoping we might be. In his Tuesday research note, Jeffrey Kendrick of Standard Chartered offered a framework. He noted that we're almost 30% down from the highs matching the other two major drawdowns

during this cycle. Kendrick wrote, It's a simple argument, but the best ones often are. I think this is enough to signify the sell-off is over and to eventually disprove those who think the halving cycle remains valid. A rally into year-end is my base case. Legacy internet and infrastructure are brittle, plagued by downtime, coverage gaps, and outdated financing models.

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This is fintech for infrastructure, connecting capital directly to business. builders and returning revenue seamlessly to funders. No middlemen, no bottlenecks, just sovereign, resilient infrastructure that works for people, communities, and investors alike. Learn more at Althea.net and find them on Crackin to join the future of infrastructure finance. Now moving over to the fundraising world, Crackin has announced 800 million in new fundraising bringing their valuation to 20 billion. The fundraising includes two tranches. The first deal was led by numerous institutional investors, including Jane Street, DRW, HSG, and Tribe Capital, the second deal was a $200 million strategic investment from Citadel Securities.

Citadel President Jim Esposito said, We're excited to support Cracken's continued growth as it helps shape the next chapter of digital innovation in markets. Citadel Securities collaboration with Cracken will include differentiated liquidity provision, risk management expertise, and market structure insights. Now, Citadel is one of the largest high-frequency trading firms in the world and plays a huge role as a liquidity provider in TradFie markets. The entire GameStop saga painted Citadel and their CEO Ken Griffin as supervillains,

but that's probably a little too simplistic of you. For Cracken, Citadel could help bridge the gap between crypto being a frontier market and gaining more institutional credibility. Citadel has historically avoided crypto markets, but this strategic investment suggests they're now taking an active interest. Whether Citadel's involvement makes market structure better or worse remains to be seen, but it's another clear delineation point as we head out of the Wild West days of the industry. For Cracken, 800 million in fresh capital is obviously a big deal.

Over the past year, Cracken has been brushing up operations, expanding internationally, and fortifying their balance sheet. These efforts flowed through to the bottom line with the past year delivering a doubling of revenue. Cracken has been working towards an IPO, which now seems like it will happen in the first half of next year. Co-CEO, Arjunsethi, however, threw a little bit of cold water on the public listing last week, telling Yahoo Finance, we have enough capital on our balance sheet today as a private company, and we don't want to race to the door as quickly as possible. He added that he's wary of going public, quote, just because everyone else is doing it, but noted that, what's good about these companies coming out first is that they are educating the

market on what's good and what's bad, what margin looks like, how do you make money? The upshot of it all seems to be that Cracken can pick their moment. If this really is it for the cycle and we're heading into another bare market, they likely have enough capital to comfortably make it to the other side. If, on the other hand, the market comes roaring back to life next year, Cracken can move quickly on their IPO. Tether is making some interesting moves with a strategic investment in Bitcoin lender, Leden. Lennon has been one of the quiet breakout hits of this cycle. They offer Bitcoin-backed loans to users in over 100 companies. In October, they reported that they had originated $392 million in loans for the third quarter. That brought their total to over a billion

dollars in loans this year, and $2.8 billion since the company was founded in 2018. In a press statement surrounding the deal, Lennon CEO Adam Reid said, we expect demand for Bitcoin financial services to continue soaring, and this collaboration with Tether ensures that Lennon remains well-position to lead as the market continues to evolve and grow. For Tether, this is another interesting deal as they build out their company beyond just stablecoin issuance. Over the past year, they've done a series of M&A deals and strategic partnerships that diversify their business into all sorts of new areas. Regarding Lennon's place in the Tether Conglomerate, CEO Parlo Ardwino, praised the firm for expanding the availability of Bitcoin-based credit. He said, this approach strengthens self-custody and

financial resilience while creating real-world use cases that reinforce the long-term role of digital assets as essential pillars of a more inclusive global financial system. A couple more quick ones before we get out of here. The OCC has issued guidance to allow banks to hold crypto on their balance sheet. The new guidance clarifies that banks are allowed to hold certain cryptocurrencies for the purpose of paying gas fees. The guidance is very narrow, requiring that the banks only use crypto to test blockchain infrastructure, and reinforce that these activities must be carried out in a safe and sound manner. The notice follows up on guidance from May that banks were allowed to handle digital assets on behalf of customers

and could outsource some crypto activities to third parties, such as custody. In order to do this, banks would obviously need to pay gas fees from time to time, so allowing them to hold crypto on the balance sheet is an obvious next step. Lastly today, with the SEC back online after the government shutdown, we're getting the spree of all coin ETF launches. Solana ETFs from Van Eck and Fidelity both began trading this week, with Nate Garassi of Novodias wealth commenting, still surprised BlackRock is sitting this one out. Bloomberg's Eric Balconis noted that Fidelity is still a gigantic asset manager, and with BitWise and Greyscale also competing, he remarked, game on. And despite the rough timing for the launch, the Solana ETFs have been a quiet success. Bitwise has seen inflows every day since they

launched at the end of October to gather a total of 388 million in assets. None of the funds have registered an outflow, and there seems to be enough interest to justify the products. On deck, we have multiple Ripple ETFs and a Dogecoin fund that are expected to launch over the next week. So that's where we are. Everyone is wondering if the bottom is in. That is what we will be keeping an eye on. For now, though, that is going to do it for today's breakdown. Appreciate you listening, as always, and until next time, be safe and take care of each other. Peace.