Coin Stories with Natalie Brunell

Episode: James Check (Checkmatey) – Bitcoin Investor Behavior & On-Chain Analysis 101

Date: March 17, 2026

Episode Overview

In this episode, Natalie Brunell interviews James Check (aka Checkmatey), renowned on-chain analyst, on the basics and deeper insights of on-chain analysis in Bitcoin. They discuss how on-chain data provides a window into investor psychology, identifying moments of profit-taking versus capitulation, and how these cycles manifest in Bitcoin’s price action. The episode dives into interpreting charts, understanding what really drives market moves, the roles of retail and institutional investors, and current topics like quantum computing FUD and key market myths.

Key Discussion Points & Insights

1. Psychology of Markets & On-Chain Analysis (00:00–05:39)

• Chopsolidation and Emotional Cycles:
  James explains that sideways markets frustrate investors, leading to overreactions on green/red candles, while pointing out how conflicts and news stories amplify these swings but often mask the “chopsolidation” beneath the surface.

  • “People are going to get super excited on every green candle. They’re going to get super bearish on every red candle. …what’s it actually doing? Chopping sideways and it just, it frustrates people to tears.” (00:00, James Check)

• On-Chain Analysis as a Lens into Psychology:
  Bitcoin’s transparent ledger lets analysts see what actors are doing—spot traders, leveraged traders, ETF flows—and connect them to human behavior.

• James’s Personal Journey:
  James’s initial foray into Bitcoin was at the 2017 top, with early mistakes helping him map out behavioral metrics that flag when “smart money” is taking profit vs. “dumb money” capitulating at a loss.

  • “I bought the 2017 top. …My first ever bitcoin buy is above the top wick of the candle. Like you couldn't have bought higher than me if you tried.” (00:57, James Check)

2. On-Chain Analysis 101: Understanding the Framework (03:17–10:39)

• The Three Axes Framework:
  Bitcoin’s supply can be analyzed in a “cube”—axes are:

  1. Are coins moving or HODLed?
     • 1% of supply moves daily (not always the same 1%).
  2. Are coins in profit or loss?
     • At bull tops: old coins in profit are spent.
     • At bear bottoms: top buyers capitulate at loss.
  3. Who owns them? (Cohorts by holding time):
     • Long-term (5+ months) vs. short-term holders.

• Interpreting the Cube (07:25):
  The framework helps identify if coins are moving due to panic or profit, and whose pain or euphoria matters for market extremes.

• Quote Highlight:

  • “…when everyone feels safe to do something, they're kind of the last person to jump in the pool. And then there's no one else to buy or there's no one else to sell, you're kind of doing the exact extreme thing that you shouldn't be doing. You got to flip it around.” (09:54, James Check)

3. Why Most Investors Get it Wrong – HODLing vs. Trading (10:39–14:55)

• Trading vs. HODLing:
  James discourages trading for most people, stating on-chain insights are best used to steady hands and manage emotions, not to chase tops or bottoms.

• Distribution of Buy Prices:

  • At the all-time high (ATH), 70% of wealth had a cost basis above 95k; after the decline, that dropped to 45%, as coins “flowed downhill” to new buyers at lower prices.
  • “It's like soil rolling down a hill. …it cascaded again and eventually you just have too much soil at the bottom of the hill. And what happens? The market starts rallying, people start taking profit and the coins start migrating back up the hill…” (12:18, James Check)

4. Interpreting Bull and Bear Cycles with On-Chain Metrics (14:55–19:01)

• Revive Supply & The 2025 Non-Rally:
  Revive supply shows bursts of old coins being spent, often at local tops.

  • In 2025, despite buys from large actors (like Michael Saylor), an extraordinary amount of profit-taking across every cohort kept prices suppressed (“parabola envy”).

• Insight:
  “When folks say why did Saylor buy 10,000 coins and the market went sideways or down, it’s like because Hodler sold 12,000 yesterday and 15,000 today…” (15:07, James Check)

• Inflection at 80k (Q4 2025):
  Following a major selloff, older coins stopped moving, and the setup shifted from profit-taking to awaiting capitulation by latecomers.

5. Capitulation and Time Pain – How Bottoms Form (18:05–24:01)

• Types of Bear Market Pain:

  1. Immediate price loss
  2. Evaporation of unrealized gains
  3. Time – prolonged sideways grind

• Chopsolidation:
  Prolonged sideways action grinds down sentiment as much as sharp drops.

  • “The time component… that compounding feeling of it's down and it's not going back up, that just kills people's emotions.” (18:07, James Check)

• Loss-Realizing Sellers:
  Major bear bottoms usually culminate when buyers from the previous bull finally capitulate (e.g., 2021 buyers selling in 2022 at a loss).

• Fear as Buy Signal:
  Massive on-chain loss events (market-wide realized pain) are indicators of bottom formation, not peaks. Smart money accumulates during these periods.

6. Current Cycle Analysis: Odds, Scenarios, and Mean Reversion (26:19–32:09)

• 2025–2026 Bear Structure:
  The drawn-out “chopsolidation” of 2025 built up pain, with major capitulations in Nov 2025 and Feb 2026 releasing pressure.

• Chance of a Deep Drop?
  James models multiple mean-reversion anchors; at 70k, we are already in the bottom 20% of historical pricing deviation. A drop into the 30–40k range would be unprecedented (“one of one event”), with odds strongly stacked for upside (“Q5 territory”).

• Quote:
  “If you walked in any casino with 80% odds, you would roll that dice every day.” (31:41, James Check)

• Advice:
  DCA through the bottom: “Just buy the whole bottom DCA, the whole thing. …You won’t be there for the absolute bottom; you’ll be too scared or asleep.” (31:14, James Check)

7. On Exchanges, Data Clarity, & Analyst Perspective (32:09–35:30)

• Exchange Opaqueness:
  Many trades occur inside exchanges off-chain. Data science teams map addresses and adjust for noise, but James asserts the “background noise” is manageable and deviations rarely exceed 5%—enough signal to see the big shifts.

• Quote:
  “I’m looking for breaks of that noise. …Once you can see what is noise and what is signal, it clears up.” (35:24, James Check)

8. Debunking FUD & Myths: Quantum Computing and 118x Multiplier (35:30–41:37)

• Quantum Computing Risk:

  • James sees no evidence quantum risk is suppressing price; believes a practical threat is at least a decade out.
  • Major pools are vulnerable eventually, but a rushed fix is as dangerous as no fix.
  • “I think bit360 makes sense. I think not doing anything is dangerous and doing something too drastic is also very dangerous.” (39:14, James Check)

• The "118x Multiplier" Myth:

  • No, $1 in = $118 in market cap isn’t reality. Actual bull market multiples top out at about 8x; typical ETF flows show ~32x. Myths like this exist for “engagement farm” purposes.

  • “People love to say, ‘oh, there’s 118x multiple’ …this is why people are sad.” (41:37, James Check)

9. Price Outlook – Where is the Bottom? (41:37–43:06)

• Current Range Expectation:
  • “My framework for now is we bottom somewhere in the 2024 chopsolidation range…between 50 and 70, that’s where I think we find some kind of a bottom…” (41:46, James Check)
  • Major sentiment/psychology shift happened at 60k.

10. Retail vs. Institutional: Who’s Owning Bitcoin? (43:06–48:06)

• Saturation Point for Hardcore Hodlers?

  • James posits that self-custody growth may be nearing saturation–hundreds of thousands are true “hardcore” bitcoiners versus millions of holders overall.

  • “I fear that we're approaching the saturation point of like self custody, cold card wielding Hodlers.” (43:06, James Check)

• Rise of Retail via ETFs:

  • A large share of ETF ownership is retail, and ETFs are “hodling” harder than spot retail ever did.
  • “Most of the sellers in this down cycle have not been ETFs. …retail who bought Spot. …But the ETFs, the majority of the holders are retail. …most of the outflows we've seen about 11.2 billion since the all time high…look like a basis trade, not a loss of confidence.” (44:35, James Check)

• Institutions’ Role:

  • The future upside may come not from mass retail, but tiny allocation shifts by massive pools of institutional capital.

  • “Bitcoin mastered its freshwater pond. …it's now swimming out that estuary into the big bad salty ocean… it needs to go out to find more food. …people who have been like 100% bitcoin, they're divesting out. …The tradfi world is also going to divest from a 100% 0 bitcoin position to just 0.1%. But those 0.1% are more money than you and I will ever dream of.” (46:32, James Check)

Memorable Quotes & Moments

• “Markets do not go in a straight line…Eventually it needs a rest.” (19:01, James Check)
• “If you understand why something happens, you can control your response, not the market.” (10:55, James Check)
• “You won't be there for the absolute bottom–you’ll be too scared to do anything. Just buy the whole bottom DCA.” (31:14, James Check)
• “The process of self custody has always been too hard for the average person. But the ETFs…are hoddling hard, more hardcore than most.” (43:06, James Check)

Conclusion & Where to Find James (48:13–End)

• James Check’s content:
  Charts and newsletter at checkonchain.com
  • “Every chart that you saw here, they're all free. And also a newsletter where we go over this twice a week.” (48:13, James Check)
• Final Note:
  • “Buy the whole bottom. Don't fantasize over the bottom. You won't be there for it.” (48:41, James Check)
  • “Keep DCA’ing.” (48:45, Natalie Brunell)

Useful Timestamps

• 00:00 – Bitcoin’s emotional market “chopsolidation” intro
• 03:17 – On-chain 101: The three axes of supply analysis
• 10:39 – HODLing vs. Trading philosophy
• 14:55 – Revive supply and profit-taking cycles
• 18:05 – Types of pain in bear markets
• 19:01 – “Chopsolidation” and its effects
• 26:19 – 2025-26 capitulation events
• 30:16 – Odds of a drop to 30–40k, mean reversion
• 39:25 – 118x multiplier myth explained
• 43:06 – Core retail vs. ETF retail and institutional flows
• 46:32 – Institutional “rotation” thesis
• 48:13 – Where to find more of James Check’s work

This summary captures essential topics, charts, and honest market wisdom for seasoned and new listeners alike. For more, visit James Check’s charts, and don’t forget: buy the whole bottom, don’t chase it!