The DeFi Report

Ryan Sean Adams:
[0:10] Welcome to the report. Title of today's report, Early Bull Confirmed? Question mark? That is the question. I've been waiting for some time to see this title in the report. It is September 23rd, 2026. Here's the opening context that this report begins with. I'm going to read it straight out. Rising bond yields and real rates, Fed hikes, rising oil prices, escalation in Iran, Clarity Act failure, strategies balance sheet, quantum fears. The market has thrown the kitchen sink at Bitcoin over the last four to five months. Yet, here we are. At the time of writing, Bitcoin is now up 48% from the June 30th lows as it turns key resistance levels into support. Key resistance levels into support. And the question, of course, for today, are we in the early bull market? The golden cross, where it is, that has been achieved. Bitcoin is now above the 50-week moving average. So, Mike, we got to open with this. Are you ready to say it? Are you ready to say we are now in the early bull market? Do we have the confirmation you've been looking for these past few weeks?

Michael Nadeau:
[1:26] I am ready to say it. I think the last time you asked me this, we were at 70%. And I came into today thinking about what that percentage was going to be today.

Speaker3:
[1:37] And I'm putting it at like 85% or so.

Michael Nadeau:
[1:40] So I think we can say, you know, there's probably going to be another sort of retracement down to the 50 week. You know, we typically will test it after breaking through. But I think, you know, certainly probabilities are pointing at the early bull being confirmed at this stage, I think.

Ryan Sean Adams:
[1:58] OK, let me hold you to something, because I think for the last couple of weeks you had a rule. You told me that confirmation meant not just Golden Cross confirmation, but firmly breaking through the 50-week moving average with, you said, a few weekly closes at that level. So by my count, we have one, maybe two. A few to me is like three and greater. Are you sure it's not too early? Do we have the few above the 50-week that you've been looking for?

Michael Nadeau:
[2:28] So not quite. We had a close at the 50 week. This was, I think, two or three Sundays back. And then we came off of it. And then when we came back to it, we were able to break through on the second try. So, you know, we had a strong sort of Sunday close, you know, above it. And then we had Monday with a follow through this week. So I'm looking to see this week, can we get that second weekly close? Now you're at two, maybe it's three with the one we were at it. So, yeah, I just think, you know, when you add everything up, just the confluence of like all of the factors, which we'll get into this week, I really think that the probabilities do support, you know, us moving into this early bull phase of the cycle here.

Ryan Sean Adams:
[3:14] Maybe it was Ben Cowan finally capitulating that tweet. Maybe that's what pushed you over. Actually, I want to ask you about that

Ryan Sean Adams:
[3:20] Later in the episode, he said this, I was wrong, not going to make excuses. I deserve to be dunked on. We'll talk about that a little bit later. And for listeners, stick around to the end because we're going to end, as we often do, with the next key price indicators that Mike is watching. And if we have time, Mike, I actually want to discuss Drive with you, DRV. I think that's up like 4X or so since TDR started talking about it and buying it. And I want to get your sense of where it might go from here. But just to level set, Coming into the week, Mike, you are risk on Mike still fully. Sounds like you confirmed that in the intro. TDR portfolio, I just checked the numbers this morning, up 153% since inception. And the non-Bitcoin portion of that, 238%. That is confirmed as of this morning in the updates, in the number update that I've seen. That's about just over a year, I think, the TDR Pro has been active, and that's the performance since then.

Ryan Sean Adams:
[4:21] Last time I checked, your posture was you're riding winners. We'll talk about that maybe near the end. But let's start with a discipline that you often do in these weekly updates and talk about market structure, this cohort analysis. So we've tracked how this has changed quite dramatically over the past four weeks or so. What do you see when you look at this table now?

Michael Nadeau:
[4:46] So I think it's the same story we've kind of been telling, I think, over the last few weeks, last month or so. So ever since August 18th or so, when we got to that level where Bitcoin was trading below fair market value, below 65K, had been there for roughly a month or so, and we saw the most coins consolidate into that cost basis cluster. So that happened in like mid-August or so. That was a big sort of checkmark in terms of, you know, cycle lows probably in at that time. And so we've been monitoring what's been happening now that price has reversed off of the lows. What we're observing is that some of those coins that were purchased, you know, in that 56 to 66K cohort, this is the prior cycle top cohort. Some of those have actually been passed on at higher cost basis levels. So that cohort has dropped actually 22% since mid-August or so. And the cohorts above it are picking up the coins. So the 66 to 78K is picking up coins. And then the 78 to 92K cohort is picking up coins. That cohort is now the largest. And so you kind of have like these coins consolidating into this zone now. They're coming from the top. So the prior type, or sorry, the people that came in at the top of the market in 25.

Michael Nadeau:
[6:07] Those cost basis cohorts, the 92 to 108K and the 108 to 127K, those are still dropping. So that's kind of interesting. You still have this time-based capitulation playing out where people that bought the top

Michael Nadeau:
[6:22] Um in 2025 as price is rising their unrealized loss is starting to disappear a little bit they've been maybe anxious to get out of bitcoin

Michael Nadeau:
[6:31] Um kind of interesting because are they smart money's coming into bitcoin right now but it kind of shows you there's still investors out there that are exiting the market um so basically you have this consolidation coming in with coins uh in the 78 to 92k range i think we have enough evidence now especially with what we're seeing you know, in terms of ETF flows, that this is kind of like the we're setting that new foundation. This is the smart money institutions coming in, you're starting to see new narratives also coming for why crypto is sort of in a good spot here. So that's kind of the story, I think, on the market structure side is, you know, we've kind of seen what we would expect to see in terms of coins rotation, a new foundation setting. And, you know, we monitored this all the way through the bear market. We will have this same type of updates on a weekly basis moving forward as we go into these higher cost basis bands and sort of where coins are consolidating. This is what helped us sort of identify the top as well back in 2025.

Ryan Sean Adams:
[7:34] I want to emphasize that because I do think that is the alpha that TDR has and that you've brought into your analysis that allowed you to time things the end of last cycle and the beginning of this cycle pretty well, that you weren't anchored on patterns from the past. You weren't anchored on moving averages. Those were all ingredients. You weren't anchored on timeline and you certainly weren't anchored on macro, which we'll talk about the deception of macro a little later in the episode. It was this coin rotation metric and the study of coin rotation that allowed you and gave you the confidence to call these cycle times. And you're saying, you're going to continue doing it. And now this band, this 56k to 92k band, that range in Bitcoin, that's now the foundation that you're going to be tracking moving forward. When you say that's the foundation of the fifth cycle in crypto, let's say, what do you mean by the foundation? Like, does that mean it doesn't go below this band or are these the strongest holders now? What exactly does foundation mean?

Michael Nadeau:
[8:43] Yeah, I think a few things. So I think I think, number one, you know,

Michael Nadeau:
[8:47] We tend to get to certain levels with Bitcoin where you actually never revisit a certain level. So it's possible we never see 60,000 Bitcoin again. We've sailed past that and we're off and running. So that's one possibility. Um, the other thing is just the, the, when I talk about the foundation, it's sort of like, these are the people that this is the smart money. This is people that have probably been in crypto for at least a cycle or two. They kind of understand, uh, the game they're playing and they want to get in the market at, at these lows and they want to hold, right. They want to hold, they, they sort of understand that you have to hold the asset for a while. So you're kind of resetting the base of holders into stronger hands. And you're doing that, you know, it through, throughout the bear market that's playing out as that's playing out you're also pulling leverage and credit you know out of the system so you're kind of like fully resetting the leverage uh in the system and then you're resetting the base into stronger hands and then that's now the foundation where um you know all these people that are in crypto now that becomes sort of the marketing department right for the next cycle everyone who's already in and holding assets and then you'll start we'll start to see and we'll track this through the cycle we'll start to see you know stablecoin supply is starting to come back. We'll start to see active loans and DeFi starting to come back. And you'll start to see, you know, leveraging credit, things that that strategy is doing. And that all gets built on top of that foundation that I think we're setting now.

Ryan Sean Adams:
[10:15] Let's talk about the golden cross now. So we saw a clean break this week for the first time. You wrote, on Monday, the golden cross was fully confirmed with Bitcoin now trading well above the 50-week moving average, which is 78.8K. So remind us the significance of the Golden Cross and what does it mean to have that fully confirmed? What has it meant in previous cycles? How do you interpret this?

Michael Nadeau:
[10:42] We talked about this a few weeks back. We typically look for this around the time that we're looking for Bitcoin to also push through the 50-week moving average. That's kind of the bull market support band. When we look at the chart here, we can see that back in 23, in early 2023, when we were entering the early bull phase, Bitcoin had its first cross, the golden cross, on February 7th. So that was roughly 20%. Three months or so after Bitcoin had bottomed for the cycle. And it took about five weeks for Bitcoin to actually push through the 50-week moving average.

Michael Nadeau:
[11:22] That golden cross is a momentum sort of bullish indicator. It's telling you basically the short-term momentum, the short-term price action has kind of come off the lows and it's now exceeding sort of the longer-term price action.

Michael Nadeau:
[11:37] We just had the Golden Cross. We touched it similar to how we kind of touched the 50-week moving average a few weeks ago, but we've durably broken through that. You can see in the chart here that the shorter term 50-day moving average, that orange line, has now pierced up through the white line, which is the longer 200-day moving average. And then we've also pierced through the 50-week moving average. This has happened faster, right? Faster than it happened coming into the early bull back in 2023. We've talked a little bit about that. It took about a month for the 50 week to confirm after the Golden Cross in 23. We did it in about 10 days after the Golden Cross in this cycle. So it's happening a little bit faster. And I think that's okay. I think the way I try to approach this, I'm not trying to line everything up exactly how things may have played out in the past. It's really just putting all these ingredients together and saying, does the probabilities support like a view in the market. And, you know, I think these two factors in conjunction with what we're observing across the market structure, across all these high level cycle KPIs that we track, I think when we put all this into the mix, that's kind of how I get to that

Michael Nadeau:
[12:51] 85%, you know, probability that we're entering the early bull phase.

Ryan Sean Adams:
[12:57] Let's talk about the mix here that has kind of tipped you over into 85% probability that we are in the early bull. You call out six things specifically. I'll throw them out there. Number one, that market structure reset that we've talked about with the foundation of new holders at the foundational cohort level. Number two, reset in all the leverage. We saw a bunch of leverage getting wiped out. That has now been reset. You say number three, most bear market KPIs were hit. So a lot of them were on your list. Not all of them were hit, but most of them were hit. We talked about this about six weeks ago or so when I asked you the question, hey, if you squint at the KPIs, would you call this cycle like everything was hit? And you said yes. So supply and profit, long-term holder supply and profit, 12-month RSI, price over 200-week moving average, all these things checked. We got the golden cross, and that was two to three months from the cycle low. That's number four. And we reclaimed the 50-week moving average. We just talked about that. That's number five. And then number six, I like this one, bad news is no longer pushing prices lower, which indicates seller growth.

Ryan Sean Adams:
[14:12] Exhaustion. Like they're just tired, right? The Clarity Act really didn't put a dent into the momentum. I should say the lack of the Clarity Act going through. So these six things, this is enough for you in kind of the Mike TDR stew to add all of these ingredients together and call this done, call this the early bull?

Michael Nadeau:
[14:32] I think so. I think that's kind of where my head's at. And we'll talk a little bit about macro and And how I'm thinking about that, there's certainly risks out there. There's always risks and we're always expecting volatility. And I think the portfolio has done, you know, has exceeded even my expectations. But I think we're in a really good spot. I think, you know, it's a testament to this work that we're doing and these reports that we're putting out each week, I think, has really helped informed the execution here.

Ryan Sean Adams:
[15:01] Can I ask you, though, so these are six that confirm it for you. Is there anything that's still in the back of your mind still bothers you that you're still like waiting on that you're kind of like well these are six things that happened and I guess this is enough to confirm it but there's some nagging voice in your mind of some indicator that really didn't hit that you expected at some point during the uh the bear market would be hit there anything like that

Michael Nadeau:
[15:32] Not really. I would say, you know, we didn't get to the realized price. You know, that's something we have gotten to in past cycles. So that was one of the sort of high level cycle KPIs that we track. We didn't get there. We got close to it. Didn't get all the way to that. I think the realized price was 55k when we got down to like 58 or so. So we got like kind of close enough. And you know I think I think if anything it's probably just sort of the macro side of things that where there's you know maybe there's some like black swan or something out there which I think we'll we can talk about talk about that a little bit but no I mean I spent a lot of time thinking about that question actually like is there something out there and like we have a number of data sets that I go through and I think everything that I look at tells me like yes there's we haven't hit everything but the probabilities are pointing in the right direction and then when you look at sentiment and you look at just everything else that you know the sort of intangibles that we fold into it um it all kind of like lines up pretty consistent for me that that you know this is um this is kind of what i would expect to see kind of coming off of almost a year-long bear market heading into an early bull phase

Ryan Sean Adams:
[16:46] There's a few things when you went through the the current conditions update that seemed somewhat perplexing to me and i'll just highlight a few one is etf flows so net inflows actually flipped slightly negative on the seven day and that's for the first time since august in good news we're probably trading bitcoin above

Ryan Sean Adams:
[17:07] cost basis, the ETF cost basis of 82K. So that's good for ETF holders, the average holders in the green. But if we are like negative on seven day moving average for ETF, my question is like, who is buying Bitcoin right now? Like, and in general, that's a broader question than just the ETF. So who are the buyers that are causing Bitcoin to be above its moving averages?

Michael Nadeau:
[17:35] So yes, and on the ETF flows specifically, so this chart, there's an update on this. So that has actually flipped green. So I think I didn't have the Monday's data when we drafted this report. We didn't have that from Glassnode just yet. So I actually looked at it this morning and we had two extremely strong inflow days that came through in the data on Monday too. So I'm gonna put, I'll put a post up today about this. But yeah, so this, you know, it did flip negative. if Monday and Tuesday were strong inflow days into the UTS when I looked this morning. So This looks better, just to address that point. So yes, we are seeing flows coming back on the ETFs a little bit here. We're now above the average cost. So people that are pulling up their brokerage statements and looking in there, they're feeling better. Maybe they're buying some more. You know, I think one thing, you know, to answer the question, like who's coming in, like what is going on here? Maybe with the sort of, we talk a lot about the big picture market structure, but there's also like this, another game being played that's more short term market structure. And we had another pretty big short liquidation that kind of pushed us through to the mid 80s or so here. And this was kind of similar to what we saw

Michael Nadeau:
[18:52] Back in mid-August when we had, when the treasury came out and said they were going to do buybacks and we saw a massive short liquidations. We had another period of this. So I think this kind of comes back to like why you have to be like in the market when you think the probabilities are starting to point in the right direction because you have these idiosyncratic things that can happen where there's still enough shorts to

Michael Nadeau:
[19:17] You know, in the market. And then you just have some, you know, the sellers have been exhausted enough that some good news comes and you can break that structure. I think that's sort of how we have emerged out of this, out of the bear market was really sort of the short term market structure, these short liquidations, pushing the price into areas where now we're reclaiming some significant resistance levels. Then you have the reflexive move, then the narrative comes like everything comes after that so it's kind of interesting to me how how this has played out but i think this has been a factor in kind of moving us into the early bull something that we'll have to monitor right if that's you don't want that to be the only reason right that something is is you know you need to have durability you need to have spot buying behind that we need to see etf flows behind that we want to see uh liquidity conditions within the crypto market stable coin supply things like that active loans we'll be looking for all that follow through. But I think it's kind of interesting that just kind of that short term market structure, idiosyncratic market structure kind of tipped us over. And now the narrative shifting now, it seems like there's not enough, you know, sellers out there.

Ryan Sean Adams:
[20:28] Could it be that even Michael Saylor is a buyer and the cause of some of this recent price movement? I don't know if he's doing this in size enough for it to matter, but that has been a switch. It was not three months ago that there was sort of FUD in the air about a strategy unwind, you kind of faded that. You felt like the balance sheet was looking good. And in fact, I don't know, it was three or four weeks ago, you talked about potentially strategy becoming a net buyer of Bitcoin. And that has certainly switched. There's another Bitcoin purchase on the week. Is this size enough to matter? Do you think strategy is a focal point, something that investors should pay attention to in this early bull phase? Or is it just like not enough to matter at this point.

Michael Nadeau:
[21:15] It's probably not enough to matter like in terms of moving price. I don't think he's necessarily moving price when he's going in and making the purchases, but I think it can matter in terms of overall sentiment, people feeling like more comfortable, like there's this large buyer that's now in the market behind them. And I think that can impact just market psychology and people's willingness to put on leveraged trades and things like that. So I think that's, we saw this, you know, with DAT season last year when all the other DATs were coming online. And I think that sort of tipped the market into a little bit of a frenzy on some of those assets because you could get in the market, you could put on leverage, knowing that you had this large buyer behind you. I think there's some of that that comes into play with what Saylor does, especially in bull markets. And then, of course, you know, some people are just trying to front run, you know, front run this. If you think that he's going to be able to raise more capital, STRC is now trading back to 99. So getting very close to par, we'll see what happens here if it gets back to par. And if he's able to, you know, come to market, raise more capital by issuing more STRC, now he's back in the market. He's tweeting his buys and the crypto community is loving it. And we're in that sort of bull market vibes mode again.

Ryan Sean Adams:
[22:36] I guess like STRC back to 100 or close to it is a big example. It's almost a bellwether of the leverage reset that you've been looking for

Ryan Sean Adams:
[22:45] because that is leverage reset. And now Saylor has the potential to reload and redeploy. Let's talk about macro for a minute because this has been over the past several months, I think the thing that has still had you feeling some jitters and worried about calling the end of the bear market too early because macro just felt kind of uncertain and it still feels like this. You said the market has thrown the kitchen sink at Bitcoin over the last four to five months from a macro perspective. So we had oil prices since February rise about 57%, 10 years going crazy, up 75 basis points, increasing the cost of capital. Real yields rose 79 basis points. War in Iran still unresolved.

Ryan Sean Adams:
[23:35] Fed hiked rates last week since the last time we've recorded, which I want to talk about. We had the Clarity Act failing. We have AI doom and gloom. I don't know if it's peak, but I've never seen it this bad out in kind of the real world. And now Polymarket has the Democrats taking the House at 93 percent. The Senate at 66 percent. Hard to imagine a world where any favorable crypto legislation gets through then. In fact, some of the progress crypto has made could start to reverse. We have all of this backdrop. And yet Bitcoin, what'd you say? Still up 48 percent from the June 30th lows. Why? How do you explain this?

Michael Nadeau:
[24:14] It's, you know, it's, and it's up 42%, I think, against NASDAQ during that period as well. Yeah, I mean, it's impressive. And I think, you know, when I zoom out on this and try to think a little bit about, you know, how did this happen? I think this is where the work that we do on market structure and coin rotation and like, to me, that's kind of the anchor of everything. And if I feel like that's moving in the right direction and I have conviction that the sort of holder base is rotating, you know, when we were trying to figure out where the lows were back a few months ago, one of the things that I kept pointing to was like, the macro looks messy to me, the macro looks messy to me. And that was kind of what would tip me into, okay, the lows are in or we're off and running. And it wasn't until Scott Bassett came out and kind of had these new policies around buybacks that I started getting more comfortable, still acknowledging that these risks are out there, that yields wanted to rise, that inflation didn't look great, that oil prices are rising, things in Iran don't look great.

Michael Nadeau:
[25:22] So kind of acknowledging all of that, but then just saying, you know what, like if the policymakers are telling you what the plans are, that they see all of this, that they're trying to get ahead of it, then I kind of have to fold that in. And I kind of have to be willing to just, you know, kind of be risk on with all of these, you know, risks that are swirling out there. So I think that's the main takeaway to me is it's like almost like just never go full macro as the saying of like you can kind of get yourself twisted up. If you focus on too many macro risks, that will keep you out of the market. If you're like worried about a black swan, you're worried about it will keep you out of the market. And I think that there may be times when macro is like the most important thing. But I don't think, but when you're at sort of like a phase of the cycle where you've had the holder base, the new foundation set, all of these other things played out. Macro is maybe not the highest thing on the priority list in terms of where Bitcoin is going to go. And I think we just saw this play out over the last few months.

Ryan Sean Adams:
[26:22] So for you, macro is part of the mix here and part of the weighting as to where we are in this cycle. But at the end of the day, you said Bitcoin trades through adoption and market cycle. So just plowed right through whatever was going on in macro. And that deserves higher weighting when you think about the portfolio. Let's talk about the Warsh hike specifically because a few weeks ago when we were talking about your macro musings, you actually didn't think, and you were somewhat fading the market at this point, you didn't think that Warsh would hike, at least not so early. And he did hike. And now it looks like the market is pricing in one to two more hikes this year. So Warsh going hawkish. Has that surprised you? And does this factor into your analysis of, of, uh, the market it is all, uh, at all? Like, have you changed your mind on anything here?

Speaker3:
[27:13] It surprised me a little bit.

Michael Nadeau:
[27:14] I don't, I don't think he, it was his hike. I kind of think the rest of the governor, you know, he kind of, there's, there's 12 governors on there and it's, it's by, you know, consensus. So hard to say if that was like him pushing, uh, that, or if it just came from the other governors, um, yeah. At the time, I think the market was pricing in one hike for the September meeting, but it was not pricing in any further hikes in the rest of the year. That has now changed as well. And there's, I believe, the last time I looked, there were two hikes that were priced in through the end of the year. So, you know, this is kind of interesting. It's kind of similar to me of like kind of some periods during the last bear market where you had elevated rates. It's you're trying to figure out where is liquidity going to come from. We know crypto does rely on liquidity and liquidity conditions. But back then, we said kind of the same thing.

Michael Nadeau:
[28:10] If the market structure has fully rotated, if you have confidence in what's happening on fiscal spend and other parts of the economy and how the economy is actually functioning, I think the market can handle these rate hikes. Part of the reason that we're getting rate hikes is the economy is very strong, right? There's an AI CapEx boom going on out there. There's lots of fiscal spend. Commodities markets are doing well with oil prices up. So like the real economy is doing quite well out there. And we'll see. I mean, it's kind of interesting to me that this is now priced into the market, right? So you kind of have to observe how the market is reading into these things as well. And

Michael Nadeau:
[28:52] I would expect NASDAQ to be down, you know, normally with a Fed hike and then potentially signaling like a longer rate hiking cycle. I don't think people are really viewing that. So that's probably the risk here is that the market is kind of fading this idea that we're going into a longer term hiking cycle. And maybe that's the thing that the market's offside on. It's like potentially what if this, you know, it looks like Iran doesn't want to do anything before midterms. We want to see midterms play out and then maybe we'll see some movement in what's happening over there. But if that takes much longer, we have strategic oil reserves that are being depleted, you know, globally. This keeps getting stretched out. You know, you could see a scenario where... The market has to update that view. And then maybe you get the sell-off at that point. But yeah, a bit of a ramble on the macro side. But yeah, that's kind of how I'm thinking about it right now. It's like the economy seems to be able to handle these rate hikes. There seems to be enough liquidity out there. And real rates have been rising and Bitcoin has just kind of been whistling right through all this.

Ryan Sean Adams:
[30:01] So the lesson you take, and that's been reinforced here, is never go full macro. There were really two people I felt like that called the top on the previous market in 2025. And these are sort of cycle analysts. It was yourself called it in October. And also Ben Cohen or Ben Cowan, I should say. So someone else, you know, friend of the Bankless podcast as well. And he called it pretty well. And so I was like, okay, there are two cycle investors that are worth listening to. you and Ben. Now, Ben has been on the side more recently that the bear market would persist, and he said it would persist past September into October. Now, I haven't followed his work as closely, but I think he was holding the line on that even after we got the August pump and has continued to hold the

Ryan Sean Adams:
[30:56] line on that into early September. Well, this week, this was September 21st. So I guess that was a Monday. He said, I was wrong, not going to make excuses. I deserve to be dunked on. And I think he's saying, basically, that I was wrong that we would stay in the bear market until October. I've changed my mind on that.

Ryan Sean Adams:
[31:20] I agree that we are in the early bull. At some level, he's agreeing with you. He was just several weeks later to that conclusion and holding out to that conclusion. So it's curious to me, and I'm wondering, I know you respect Ben, as do I, and you appreciate his analysis. What do you think he got wrong there? And what caused you to be able to see through and not fall into the same trap?

Michael Nadeau:
[31:50] Good question. Not 100% sure, I guess. First of all, Ben's a fantastic analyst. I've learned a lot from him and credit to him for coming out and saying he was wrong. Most people don't do that. So credit to him. And yeah, I mean, I'm not exactly sure what his stance was. I think he was probably looking at, I saw him tweeting about thinking that the dollar was going to go up. And I think a lot of this had to do with macro and what was happening with interest rates and inflation. And typically a rising dollar is not great for Bitcoin, rising real rates. So I think, you know, I can see how you could sort of put together this picture.

Michael Nadeau:
[32:32] And then Ben does, I think, a lot of sort of cycle to cycle type of analysis where he's looking at seasonality, he's looking at how things played out, he's looking at a lot of technical analysis, moving averages, all of that, which we also, you know, fold into our research. But I think, you know, if you kind of line some of that stuff up, you could kind of get to this place where, OK, October looks like it's probably the bottom. And then you're confirming that with like this messy macro setup. I can see, you know, how, you know, he came to that conclusion. It was one that we were certainly considering as well. And I think what tipped me maybe in the other direction was the market structure, the following the way that coins are rotating. And like, that's kind of the, the anchor for me, maybe a little bit more so. And I think, you know, we're looking at all these other things as well. And it's, you know, this is the art, you know, of this. I think everybody wants to just be able to like have some framework, some API, some indicators and just say, okay, that's, you know, that hit, like check the box. It's really doesn't work that way. Yes, we have a lot of this data that gets all folded in. But I do think there's like some instinct, there's some like art, you know, that comes with this. And, you know, we've had a nice run, but like we get we get things wrong as well. And nobody's nobody's perfect. And I'm sure we'll we'll get some stuff wrong, you know, moving forward.

Ryan Sean Adams:
[33:49] But I'm trying to draw a lesson here. So if the lesson is never go full macro, it's probably also never go full cycle investor. It's probably also never go full anything and consider all of the signals that you see and don't have a prescribed checklist.

Ryan Sean Adams:
[34:06] This is not just science. As we close this out, let's talk about some key levels. So what are you looking at right now for these early bull levels that confirm some prices or what are we going to be trading in, do you think, in the near future?

Michael Nadeau:
[34:23] So the levels that I'm looking at here, so the 200 week, the long four-year moving average, 65.5K right now. So that's like your, you know, if you had the view that maybe we're still going to see a lower low, that's like, if you get down to those levels, that's where you're going. The 200-day moving average is at 70.7K. This is now rising, right? So that's also consistent with what you'd see kind of early bull is longer term, the 200 day and then the 50 day, obviously also rising the short term holder cost basis. Um is 72.3k that can serve as kind of bull market support oftentimes during during a expansion phase and then you know the 50-week moving average is probably the most important one i'd say right now that's at 78.8k so we're we've got like a healthy spread there in terms of where bitcoin's trading um

Michael Nadeau:
[35:17] Above that really important 50-week moving average um we'll we'll see i think you know it would not surprise me if we came back down and touched that level again. So that's typically how this works. We never just kind of move in a straight line. We break a zone. People get too excited. There's probably some people coming in and shorting the market right now. So I think we'll be watching this in the next few weeks. I never have strong conviction and kind of like the short-term movements, but just knowing kind of how these markets trade, I could see us revisiting that. And that'll be another important moment because if we break through it on the downside, then you could start to have pause about this, what we've been talking about in terms of the early bull phase here.

Ryan Sean Adams:
[36:00] So you want to lock in another week or so above the 50-week moving average. But let me ask you about the 200-week moving average because it has been a subject of conversation around here over the past couple of months, 65.5K now. Do you think we see that again. And if we dropped below that at some point, God forbid, September has been good to us, but God forbid we have some stormy weeks and months ahead and we drop below the 200 week, that 65K number. Does that break your faith that we're in an early bull? Do you think that could happen?

Michael Nadeau:
[36:36] It could happen. I think anything's possible. And yeah, that would sort of break the whole structure of the current market and some of this work that we've done. And it would have to indicate for that to happen, you'd have to have these people that came into the market over the last four or five months selling, right? You'd have to have these. And I think that's why it may seem reasonable for that to happen. But I think a lot of the smart money, the longer term holders that come into Bitcoin, they understand the market. They're not coming in with leverage at these levels. They're not coming in. They're not quitting their job and having no income, putting everything out. They've got some cash on the sideline. They kind of know how to play this. So those people are less likely to

Michael Nadeau:
[37:23] Just be kind of like weak-handed and sell during volatility. So I think that's what gives me more conviction that once you start moving past these levels after you've had this, you know, new foundation set, it's harder to go low. So, you know, when we came out of this in 2023, when we were kind of rallying from, you know, 15, 16K to 20K to 25K to 35K, we never went back to those levels, right? Once we got up to, you know, 60K or so, of course, we came back in the latest bear market. But I think some of these levels that we're now crossing 70K, 75K, possibly 80K, we may not, this may be equivalent to like 30, 35K, you know, and back in 2023, where we never see that level again.

Ryan Sean Adams:
[38:13] So, assuming we are in the early bull, we'll have lots of time over the weeks to come to talk about how specifically you're playing it. I just want to get a general sense. And last week we did this special episode and we zoomed out on how you intend to play the entire bull market, this fifth bull market that we see in crypto. And you said during the early bull phase, you want to allow the winners, your winners, to provide clues as to what's to come for the rest of the cycle. Just high level. Can you reiterate, what are you doing right now during the early bull? Of course, you are 90% plus deployed. So very low cash position, basically full risk on Mike. What else are you doing?

Michael Nadeau:
[38:58] So, keeping an eye on the P&L, I think, is one of the, like, keeping an eye on the positions, things move fast, right? So, keeping an eye on the P&L, keeping an eye on the positions, and then having a view. So, for every position that I'm in, I need to be evaluating that as if I was going to buy that asset, you know, today, as they rise. And, you know, I think with the way that crypto markets can move really fast, especially off the lows, like we've seen, you could be, you know, the first thing could be, you know, I'm up a lot, let's, you know, let's get out of the market, let's go risk off. I am reluctant to do that at this stage. I kind of want to, you know, ride the winners and stay in these positions because of my view on sort of where we are in the cycle here. So I think we're, you know, early bull phase of the cycle. We haven't seen a lot of new liquidity come into crypto. We haven't seen stable coin supply inflect just yet or active loans and all the leverage come into crypto. And I'm kind of thinking to myself for each asset in the portfolio, like, like what's the catalyst? What's the thesis, you know, moving forward?

Michael Nadeau:
[40:08] Something, for example, something like LIT, which is one of the strongest positions in the portfolio. Yeah.

Michael Nadeau:
[40:15] You know, what is the Cadillac? We haven't even seen that product is not even available in the United States right now. Right. So you still have things that can come. And we've seen maybe the CFTC is going to come out with a new rule. Clarity Act failed, but it looks like we're going to see the SEC and the CFTC step in and almost do the reverse of what Gary Jensler did back during the Biden administration, which was Congress sat on their hands, didn't do anything. So the SEC took it into their hands and they had a completely different policy, you know, more regulation by enforcement. And I think what's going to happen is we're going to see the opposite of that. And they're going to actually just put in new rules that are actually, you know, going to be good for the crypto markets. And that's not really priced in right now. That's not the solution we were looking for, because that can then be reversed if the Democrats come into power. But this is how I'm thinking about it. You know, you can kind of go through each asset and say, OK, what are the catalysts? What does this look like in six months a year and also like

Michael Nadeau:
[41:15] Um all of the people who are in crypto right now these are more crypto natives like we haven't really like brought in a new class of crypto investors and fitback builders and i'm asking myself of the people in the market right now are they going to own more crypto in six months in a year and i think the answer to that is yes and then also are there going to be new is there going to be more flows coming into crypto in the next six months in a year and my answer to that is also yes. So I want to ride the winners at this stage. We're certainly going to manage this risk as we go, but that's kind of my thinking right now.

Ryan Sean Adams:
[41:50] So you want to ride the winners, but constantly on a daily week to week basis, be looking at the P&L and ask yourself the question for all the assets in my portfolio, would I buy them now at the current price or has the thesis fully played out of what I think this could be. This is a reason, by the way, Mike, where I'm very anxious to see you add to the portfolio in the watch list, the top side of kind of like almost the bull market numbers on some of these asset prices. We've had the bear market, fair market value and the deep value, but on the watch list, correct me if I'm wrong, I think you've promised that you are going to be adding the bull market price targets where above those amounts, you're starting and you wonder, okay, like maybe the thesis has played out. Maybe it's getting frothy. When is that coming?

Michael Nadeau:
[42:40] Yes. So working on that. And now that we have confirmation and we have sort of this 85% probability, so we're putting that together. We're planning on releasing those next week. So we'll have that up on the website. Awesome. I'm thinking about we may actually release a full report on it as well that will go out in the watch list. So, yeah, so that's coming. And I think hopefully, you know, people that are coming into the market right now, maybe that helps, you know, as a bit of a guide. You're looking at some of these themes and sectors and assets that we're in or that we cover in the watch list. Maybe, you know, can help you kind of construct a portfolio. So I still think there's lots of opportunities out there. And I think if people are coming in right now, I would refer them to the watch list, which is these free reports that we put out every Friday. We have data dashboards that go with all of those. And I think we've got about 37 assets in there, which are kind of like, you know, the sort of pool of investable assets is not as large as you might think. And so we've tried to narrow that down. We don't have every investable asset in there. But I think, you know, if you did some work on what we've covered, some of these themes, assets, and then you're, you know, have an idea on where you want to enter the market, that could be a useful resource for people.

Ryan Sean Adams:
[43:57] Is a useful resource to people. And I can tell folks that because I am a user of that resource and the watch list has what, 35, 37 or so assets. Not all of those assets make it into the portfolio. The TDR portfolio is a separate spot on the TDR Pro membership where you can see what's actually in the portfolio and how those watch list assets convert into Mike's stake-weighted holding. He believes enough in the thesis in order to purchase it. One of them, we don't have time to even talk about toward the end is Derive, which I mentioned in the intro. That's one that's up 4X over the past 30 days or so, made it all the way to the portfolio. It sounds like your plan is still to continue to ride that out and see that thesis fully expressed. Maybe we'll talk more about that next week. But because there are so many new listeners to the TDR, because we are in the early bull market, got to remind folks, this podcast comes out every Wednesday. If you are not subscribed, do it because you need weekly check-ins. Spotify, YouTube, Apple, that's the place. The report that we just went through, that is live for TDR Pro members. So you can access that on the defireport.io, link in the show notes.

Ryan Sean Adams:
[45:11] TDR Pro membership comes with the portfolio, the price targets, alerts, when Mike is buying and selling, and the guide that we introduced last week, which is the guide to the coming bull market. So we take it step by step, year by year, talking about what you can expect to see. I plug all of this stuff into Claude. One day I'll talk to the TDR community about how I'm using this data for myself. It's been incredibly valuable. And there is a 30-day free trial that you can activate now. Membership, I think, and views now at all-time highs. I think that's what you get when a lot of the calls end up being right, Mike. But let's leave it there. Until next week, none of this has been financial advice. This is an investor journal, as you know, and we're just alongside the journey with you. Until next time, stay curious.