Podcast Summary: Bankless - "Why Prices Are Crashing & What's Next—How Mike Nadeau Called the Cycle"

Date: December 3, 2025
Host: Ryan Sean Adams (A)
Guest: Michael Nadeau (B), The DeFi Report

Overview

This episode of Bankless takes a deep dive into the recent, severe crypto market downturn—Bitcoin trading under $85k and Ethereum below $3k—and examines why prices are crashing, how Michael Nadeau accurately called the top of the cycle, and what could be next for digital assets. Leveraging Mike's "cyclomentals" approach—a unique blend of on-chain data and macro analysis—the conversation gives listeners a detailed playbook on understanding, surviving, and thriving in changing crypto cycles.

Key Discussion Points & Insights

1. Mike’s Approach to Crypto Cycles & Recent Market Outlook

• Bear Market Clarity

  • Mike emphasizes that bear markets provide clarity for data-driven investors, filtering out market froth and revealing underlying fundamentals.
    "I think the reason that I kind of enjoy the bear markets is just you get a little bit more clarity, especially for folks like me that are really focused on data and fundamentals." (01:53)

• Calling the Top

  • In early October, Mike advised moving risk-off, shifting from 26% to 60% cash after careful data-driven analysis.
  • He spotted weakening market structure in Bitcoin: new money with higher cost basis, long-term “strong hand” holders taking profits, excessive leverage, and deteriorating macro liquidity.
  • The "10/10 flash crash" quickly confirmed his thesis and conviction.

  "At the time... we were looking at market structure for Bitcoin... The market structure was tilting more towards newer money, possibly weaker hands... lots of leverage building." (07:15)

2. Indicators Used to Call the Cycle

• Key Metrics

  • Holder cohort analysis: Emphasis on long-term vs. short-term holder behavior, enabled by on-chain transparency.
  • Macro liquidity cues: Watching for declining global liquidity and U.S. fiscal tightening.
  • Technical signals: Watching for weekly closes below the 50-week moving average, a key cyclical line in past bear/bull transitions.

  "We do have this confirmation... The 50 week moving average is around the 100k mark. We've had multiple weekly closes below that... this is deteriorating further." (11:56-13:12)

• Long-Term Holder Activity – “Cyclomentals”

  • Mike calls on-chain holder data a "gift unique to crypto," allowing near-real time tracking of who is accumulating or selling.
  • Long-term holders set cycle bottoms and tops; a lack of new demand and the exiting of these holders is a frequent end-of-cycle signature.

  "This is kind of like a little cheat code that we have... If you have access to this data to be able to see actual market structure." (16:25)

3. Mapping the Cycle: Where Are We Now?

• Market Psychology

  • The classic "cycle of market emotions" is referenced—disbelief, hope, optimism, euphoria, then complacency, denial, anxiety, panic, depression.
  • This cycle displayed muted euphoria (Q4 2024 into January 2025), strong complacency, and now sits squarely between anxiety and denial, with full capitulation and depression likely ahead.

  "I think we are in complacency now... as this plays out, as bitcoin continues to drop... then we start to get into the anxiety phase." (25:25)

• Cycle Anatomy: Four Phases

  • Early Bull: Quiet gains, little FOMO.
  • Wealth Creation: Main bull run, growing FOMO, new buyers.
  • Wealth Distribution: Early entrants taking profits; new buyers absorb distribution.
  • Wealth Destruction: Bear market, prices crash, negative sentiment, opportunity gathering for next cycle.

  "That's the thing, that's the thing to pay attention to because that leads into the wealth distribution zone there which played out over the last last year or so." (31:24)

4. Data-Driven Cycle Metrics

• Favorite On-Chain Indicators:

  • MVRV (Market Value/Realized Value): Strong buy under 1, signals cycle bottoms.
  • Supply held by long-term vs. short-term holders.
  • % of long-term holders in loss/profit.

  "This is kind of what we use... the MVRV... We always want to buy Bitcoin when it's under one because that means the price is below sort of the average cost basis." (34:10)

• Debunking "Bitcoin Silent IPO"

  • Analysis indicates that long-term whales have always sold to newer holders near cycle tops. This time was not meaningfully different; the crucial factor was the "loss of the marginal buyer," not extraordinary whale action.

  "Did whales and long-term holders kill the cycle?... Yes, but not any more than usual. This is how cycles always end. So this was nothing special." (44:06)

5. Macro Environment and Its Impact

• Global Liquidity Matters

  • Tighter U.S. fiscal stance (smaller deficits, tariffs), less net stimulus, and a potentially dovish Fed all signal declining liquidity—a tough setup for risk assets like crypto.
  • Dovish Fed cuts may paradoxically reduce government spending on interest, starving markets of dollars.

  "We're not convinced that this is going to be great for liquidity and great for markets." (47:21-50:31)

• Expectations for the Bear Market

  • Prolonged drawdown, measured in months, not days or weeks.
  • Potential for a higher "low" than previous cycles due to both historically muted euphoria and shallower leverage.

  "Maybe during the bear market we don't get the depths of super despair and it's sort of a shallower high and also a shallower low." (59:14)

6. How to Play the Bear Market

• Trading vs Buy & Hold

  • Mike advocates trading cycles for better risk-adjusted returns but cautions it's complex/intensive and long-term DCA is still a valid path for most.
  • His playbook: shift heavy to cash at tops (now ~80% cash), redeploy into quality assets when on-chain "fair value" signals and technicals align, build a watchlist of promising small/mid-cap projects with real traction.

  "We want to have clarity on when we were going to buy Bitcoin, when those metrics hit, and then we want to know... which of the products on our watch list are the ones we feel most strongly about." (66:04)

• Key Buyback Triggers

  • Bitcoin near 200-week moving average (~$57–65k), realized price, and/or metrics like long-term holder capitulation, ETF cost basis below market, RSI nearing 40.

  "I would be very happy to be able to buy Bitcoin at 65K... That's like a 50% correction..." (57:44)

• Bear Markets as Research Goldmines

  • Mike is energized: Bear markets are for "finding gems"—identifying projects that sustain fundamentals and developer traction through the downturn, prepping for outsized gains in the next bull.

  "This is why I like the bear market... Once we get into the bear market, we get a lot of signal as to which ones are going to be the ones we think are going to emerge." (64:57)

Notable Quotes & Memorable Moments

• On Calling the Top:
  “At the time, ... what we're looking at is really market structure for Bitcoin… The market structure was tilting more towards newer money, possibly weaker hands...” (07:15 - Mike)

• On What Bear Markets Provide:
  "I think the nice thing about these four year cycles is you sort of get a chance to kind of re underwrite your thesis with these sort of little bear markets that we get." (01:53 - Mike)

• On On-chain Data:
  "This is kind of like a little cheat code that we have...If you have access to this data to be able to see actual market structure." (16:42 - Mike)

• Market Structure & Marginal Buyer:
  "The answer... Yes, but not any more than usual. This is how cycles always end. So this was nothing special. And of course long term holders are selling to shorter term holders." (44:06 - Ryan)

• Forming the Floor:
  “Sellers have to feel that point of kind of exhaustion and despair... and the tourists have to leave and then you have to start to start a floor of now the long term holders are coming back in... That doesn't happen overnight.” (59:53 - Ryan)

• On Dovish Cuts Not Saving Markets:
  "If you drop [rates] by 1%, that's hundreds of billions of dollars less going out into the economy. And I don't think the market is really appreciating this.” (47:21 - Mike)

Timestamps for Key Segments

• 00:36 – Opening context: Market drawdown (ETH under $3k, BTC ~ $85k)
• 04:20 – Retelling the October "risk-off" call, 10/10 flash crash
• 07:15 – Data-driven rationale for market top: on-chain and macro signals
• 11:56 – Bear confirmation: multiple weekly closes under 50-week moving average
• 13:12 – Why weekly closes below 50-week MA matter for cycle transitions
• 16:25 – Value of on-chain holder data, uniqueness to crypto
• 25:25 – Mapping the psychology of the market cycle, current phase: anxiety
• 29:22 – Four phases of the crypto cycle: Early bull to wealth destruction
• 34:10 – Favorite on-chain metrics (MVRV, long-term holder %), cycle KPI review
• 44:06 – Did whale/ETF selling "kill" the cycle? No – no more than usual.
• 47:21 – Global liquidity: macro headwinds, fiscal shift, dovish cuts may not save risk assets
• 52:52 – Buy-and-hold vs. trading approach; Mike’s cyclical allocation
• 57:44 – Key buy signals: 200-week MA, realized price, 40 RSI—target zone $65–75k BTC
• 64:57 – Bear market watchlist: How Mike finds and tracks the next cycle's winners

Conclusion

Mike Nadeau’s analytical framework—combining on-chain holder activity, cycle metrics, and macro liquidity—enabled him to accurately call the cyclical top and impending bear market. He emphasizes preparedness: moving risk-off as signals emerge, then pouncing on major opportunities as fair value and fundamental strength return. Whether you’re a cycle trader or a long-term DCA investor, this episode delivers crucial insights and practical tools for navigating volatile crypto markets.

For deeper dives:

• Find The DeFi Report and Mike’s watchlists (see show notes).
• Revisit the episode for monthly updates during this bear phase.
• None of this is financial advice; “crypto is risky.”