Bankless Podcast Summary

Episode: "Was That the Top? Bitcoin, ETH, & Q4 Setup | Michael Nadeau's DeFi Report #6"

Date: September 30, 2025
Host: Ryan (Bankless)
Guest: Michael Nadeau (The DeFi Report)

Overview

This episode dives deep into the central crypto question of fall 2025: “Was that the top?” Amidst September’s price retracement and rising anxiety in the market, Michael Nadeau joins Bankless to analyze on-chain fundamentals, macro context, and sentiment. The discussion provides guidance for investors navigating choppy waters, including a review of the “mini altcoin season," key technical and sentiment metrics, macroeconomic developments, and what to watch going into Q4. The focus is on actionable data, market structure, and practical strategies—not hype.

Key Topics & Discussion Points

1. Context: Recent Pullback and Market Sentiment

• Tension in the Market: September was rough for crypto holders. Bitcoin stalled in the low 110s (in $1,000s), and majors lost momentum. Influencers are calling cycle tops, and anxiety pervades.
  • Ryan: “We got this pullback in September and it didn’t feel good… now we're going the other direction. We've got crypto influencers calling the cycle top, and there's just some general anxiety in the space right now.” [00:20]
• Sentiment Not Indicative of a Top:
  • Michael Nadeau: “It seems like there's a lot of people out there looking for the top, which typically doesn't coincide with tops.” [00:57]

2. Summer Recap: The “Mini Altcoin Season”

What happened June–September 2025:

• Market Rotation: Over summer, capital rotated from Bitcoin to ETH, then into other large-cap altcoins and some long-tail tokens, but without major “euphoria.”
  • Michael Nadeau: “We really saw the rotation into ETH… Bitcoin’s dominance… moved down from 65% to the 57% range… We saw BNB do well. We saw a rotation to Sol and some treasury companies… even some longer tail stuff like Pump and ENA.” [02:29]
• Why It’s “Mini”: Unlike historical bull cycles (e.g. 2021), Bitcoin dominance only dropped from 65% to 57% (previous full “alt seasons” saw it drop to ~40%). Overall market cap hovered, with no influx of new capital.
  • Ryan: "In the prior two cycles when bitcoin has topped its dominance has been closer to 40%." [08:42]

3. Was That the Top? Examining the Evidence

• Michael Nadeau's View: Top is NOT in.
  • “I don’t see anything that makes me nervous that the top is actually in.” [06:55]
• Key Data Points:
  • BTC Dominance: In true top, expect BTC dominance to fall to 40%; right now 57%.
  • No New Money: Market cap stuck near $4.4T, just recycling intra-crypto, not growing.
    • "We have not seen an influx of new capital in. And I think that is part of what is required to get, you know, new money coming in…" [10:09]
  • Long-Term Holders: Some profit-taking from long-term BTC holders over the summer, but that’s stabilized—no panic selling seen.
    • “It looks like over the summer bitcoin long term holders were selling some of their assets and now they've switched into a hold type phase." [20:06]

4. Market Structure & Key Technical Levels

• BTC Trends:
  • Important to stay above 50-week moving average (currently ~99k). Historically, dips below this in the fourth year mark cycle ends.
    • “If we saw bitcoin have a weekly close under that 99k range, I would be more concerned that the probability actually is starting to point towards bear market..." [16:48]
  • Bitcoin still above 50/100DMA after selloff. Markets “cleansed” leveraged longs.
• ETH Trends:
  • Key resistance/support: $4,000. Below is 100 DMA at $3.7k.
    • “For ETH I'm mostly focusing on that 4000 line… typically when you see something that's serving as resistance, once we punch through that it can start to serve as support.” [25:54]
• Altcoins: Outperformance seen only in “majors” and fundamentally strong assets; no 2021-style mania.
  • “What we're seeing now is more dispersion. Asset selection is absolutely critical... you want to be in things that have a fundamental story, that have momentum, that have narratives.” [11:31]

5. Cycle & Liquidity Setups: What Comes Next?

• BTC Likely to Lead Next: Expecting a “healthy" next stage: bitcoin retests all-time highs (~124–125k), then rotation into ETH/majors, then possibly a true altseason.
  • "The healthiest way… is to see bitcoin move back towards its all time high, 124,125k or so… And then Eth, Solana, some of these other coins actually start rising with it." [13:07]
• Time Sensitivity: Q4 is key. If BTC doesn’t move soon, risk cycle topping.
  • "If we get another leg to the cycle… what pumps next? …Do we get another bitcoin cycle before it kind of rotates back?" - Ryan [12:39]
• Funding Rate Reset: Massive long liquidations ($480M ETH, biggest since April 2021) cleansed excess leverage; funding rates now negative, setting up for possible rebound.
  • Michael Nadeau: "When you see the funding rates reset and go negative, it's basically telling you traders are now bearish. You want to see this happen… before a shift in market… and a short squeeze.” [27:18]

6. Global Liquidity & Macro Backdrop

• TGA (Treasury General Account): Liquidity pull from banking sector to refill TGA (150B ➔ 800B) likely contributed to recent market “gap” and volatility; now refilled, likely behind us.
  • "We have fully refilled the TGA account... we've now moved past this… setup looks pretty good moving forward.” [33:36]
• Macro Setup:
  • Bullish Factors: Corporate earnings rising, Fed cutting rates (insurance cuts, not emergency), small-cap equities outperforming, ISM (manufacturing activity) poised to expand, unemployment low.
  • "There's always risks out there… but we're just not seeing it… the forward outlook for earnings continues to increase… a ton of capital being pushed into AI…" [34:42][35:26]
• Fed Rate Cuts: One cut in September; two more anticipated. Some market confusion as cuts can sometimes signal distress—currently seen as accommodating.
  • "I think the market's still digesting this a little bit. Insurance cuts… mean the Fed is cutting into an expanding economy.” [37:48]

7. Sentiment & Psychological Factors

• Fear Creeping In: Bitcoin fear & greed index moved to "fear" during September, not "extreme," but signals market nerves.
  • "Is this all normal during bull markets… people to be anxious and thinking it’s over?" – Ryan [40:23]
  • Michael Nadeau: “There's a lot of trauma… a somewhat of a traumatic experience to go through… having that trauma almost can force you into another mistake if you're not actually paying attention to the data…” [40:58]
• No New Retail Mania (Yet): Inflows largely institutional, via ETFs and treasury companies; retail participation modest compared to 2021.

8. Where Will New Capital Come From?

• Route to New Highs Requires Fresh Money: Rotation from stocks/gold, new retail entry, possible regulatory clarity (e.g., US crypto market structure bill), and changes at the Fed (Powell’s term up in May).
  • “For this to really take off the way people want it to, it has to be new money... We need to see that 4 trillion total crypto market cap for the entire space start to move up rather than just... hot ball of money swinging around…” [45:45]

9. Timing & Portfolio Strategy

• Market Cycle Timing: Historically, BTC tops in Nov/Dec of 4th year, but Nadeau open to possibility of Q1/Q2 2026 if macro remains strong and bullish signals emerge.
  • “When I look at the economic data… that tells me we could be moving to an extended cycle... My base case is we probably end in Q4.” [48:47][49:53]
• Personal Portfolio Moves: Trimmed some winners over summer, decreased BTC allocation to lowest cycle level, reallocated into assets with momentum and strong fundamentals.
  • “Our bitcoin holdings are… at the lowest that it’s been all cycle… We actually reallocated a little bit into some stuff that we liked from earlier.” [50:02]

Notable Quotes & Moments

• On Market Cleansing:
  • “A massive liquidation event… reset things a little bit. And really where my head is at is just… this is a reset on our way to all time highs.” – Michael Nadeau [05:44]
• On Altcoin Mania vs. Fundamentals:
  • “What we're seeing now is more dispersion... Asset selection is absolutely critical in these markets, you want to be in things that have a fundamental story, that have momentum, that have narratives.” – Michael Nadeau [11:31]
• On Sentiment Trauma:
  • “Now people have been waiting four plus years for the next bull market and I think a lot of people are wondering, are they going to make the same mistake? And just having that trauma almost can force you into another mistake if you're not actually paying attention to the data…” [40:58]
• On Macro Risks:
  • “There's always risks out there. But… we're just not seeing it. I think most of the bearishness is just people… trying to talk themselves into being bearish, when the data just doesn’t really support it.” [34:42][36:55]

Section Timestamps

• Market Mood & September Retrenchment – [00:04]–[02:29]
• Summer “Mini Altseason” Recap – [02:29]–[06:55]
• Is the Top In? Key Evidence – [06:55]–[13:07]
• Technical & On-Chain Metrics – [13:07]–[26:54]
• Liquidations, Sentiment, and Setup for Q4 – [26:54]–[33:36]
• Global Liquidity and Macro Outlook – [33:36]–[37:48]
• Investor Psyche and Fear – [40:23]–[42:18]
• New Capital and Structural Drivers – [45:04]–[48:03]
• Market Cycle Timing & Portfolio Positioning – [48:47]–[51:35]

TL;DR – Bottom Line

Michael Nadeau’s take:

• The top is most likely not in yet; market is mid-cycle after a healthy leverage cleanse and sentiment reset.
• Q4 is crucial—BTC must lead next, with ETH and quality alts to follow.
• No evidence of macro or market structure breakdown; data & macro suggest more room to run.
• Watch for new capital inflows and key technical levels (“99k BTC”, “4k ETH”) as cycle barometers.
• Don’t let sentiment “trauma” from past cycles cloud strategic, evidence-driven thinking.

Action Items for Listeners:

• Monitor BTC’s 50-week MA (~99k) and ETH’s $4k support.
• Look for signs of new institutional or retail capital entering.
• Maintain focus on fundamentals and market structure over influencer-driven sentiment.

“Probability points to some more strength in the markets in my opinion.” – Michael Nadeau [50:50]