Coin Stories with Natalie Brunell

Episode: Northstar Charts: Bitcoin To Go Lower ($40k?) and Capital Rotation Event Explained
Date: February 10, 2026
Guest: Kevin Wadsworth, Cofounder of Northstar Bad Charts

Episode Overview

This episode dives deep into the macroeconomic environment surrounding bitcoin, the phenomenon of capital rotation, and where both gold and bitcoin may be heading in the coming cycle. Host Natalie Brunell welcomes Kevin Wadsworth, known for his viral charts and technical analysis, to unpack why bitcoin might go lower—possibly even to the $40,000 range—and how historic capital rotations between assets like gold, equities, and bitcoin can play out. The discussion explores technical analysis, the history of market cycles, the risks of trying to time the market, and what average investors should focus on during turbulent periods.

Key Discussion Points & Insights

1. Kevin Wadsworth’s Background and Approach to Chart Analysis

• Meteorological Forecasting Applied to Markets:
  Kevin uses skills from military meteorology to read patterns in financial markets. Like forecasting weather, technical analysis is about weighing evidence, not making absolute predictions.
• Communication is Key:
  Kevin stresses that good forecasts mean little if the audience can’t understand them. He aims to make complex indicators accessible.
  • Quote:

    “…Getting your audience to understand that, that's really critical… It’s no good having great information if you try and get that across and they misinterpret it.” — Kevin [01:10]

2. Capital Rotation Event: Bear Markets in All Fiat Terms

• Capital Rotation Explained –
  Kevin created a chart showing a broad bear market when major assets (stocks, money supply, currencies, commodities, bitcoin) are measured versus gold.
• Historical Precedents:
  Similar cycles happened in 1930, 1972, and 2002, often preceding very strong bull runs in gold, commodities, and energy, while stock markets stagnated or dropped.
  • Quote:

    “All of these things are in a bear market priced in gold … When you get 2, 3, 4, 5, 8, 10, 12 of these things all happening at the same time…It tells you on the image there when that happened — 1930, 1972, 2002. …Gold, silver, energy, oil, commodities all go bonkers.” — Kevin [06:24]

• Bitcoin’s Unique History:
  Bitcoin has only existed during “risk-on” environments, so we lack data about how it does when equities are in prolonged bear markets versus gold.

3. Bitcoin’s Underperformance & Chart Breakdown

• Declining Momentum vs. Gold:
  Bitcoin failed to hit new highs against gold this cycle. Kevin’s charts show a breakdown below long-term support.
  • Quote:

    “…It’s sending a signal that is a long-term trend change. …four-year cycles can occur in a 10, 15, 20 year downtrend. A four-year cycle doesn’t mean that each time you get a new cycle you make higher highs.” — Kevin [25:57]

• Potential for Lower Prices:
  If prior bear market patterns repeat, bitcoin’s bottom may be in Q3/Q4 2026, potentially in the $40,000 region. Kevin advises looking for a breakout above the 50-week moving average as a bullish signal.
• Bear Market Confirmation:
  The break below critical support and the 50-week moving average signals to Kevin that “something more serious might occur” vs prior cycles [31:26].

4. Technical Analysis vs. Fundamentals

• Risk of Market Manipulation:
  Kevin acknowledges the possibility of manipulation through derivatives (“paper bitcoin”), but believes that long-term technical patterns outlast short-term manipulation [19:21].
• Weight of Evidence Approach:
  No one indicator is sufficient—investors should look for confirming signals across inputs, just as a doctor would run several tests before a diagnosis.

5. Investor Psychology & Risk Management

• Don’t Try to Time the Bottom:
  Kevin warns against trying to “call the bottom” and focuses on catching the “meaty part of the move from the breakout.”
• HODLing and Diversification:
  Holding through volatility is only a sensible strategy for those with long time horizons and strong stomachs. Diversification and hedging with both gold and bitcoin can help avoid massive drawdowns.
  • Quote:

    “Hodling bitcoin is like, stuck in gold and silver. …If you’ve got a long timeframe and you don’t mind sitting through the 60–70% drawdowns …then fine, go for it. …I think it’s pretty well accepted that putting your entire nav into one asset is not really to be recommended.” — Kevin [16:56]

• Risk Management:
  Play the long game instead of chasing quick gains; always decide up front how much you’re willing to lose.

6. What Triggers the Capital Rotation “Event”?

• Not “Crash” Yet—But Process Unfolding:
  We’re still in the process; the actual “event” (a crash in equities or a decisive outperformance of gold) can only be confirmed in hindsight [33:00].
  • Quote:

    “…The event is really only certain with hindsight because…is when the stock market falls far enough…over a 10 year timeframe, the stock market doesn’t really go anywhere.” — Kevin [33:00]

• Potential Outcomes:
  While past cycles saw 50–80% drawdowns in stocks, this time might differ. Still, early signals point to a weaker environment for equities and assets correlated with them, including bitcoin.

7. Big Picture: Fiat Devaluation & Asset Ownership

• Running the Economy Hot:
  Natalie and Kevin discuss how governments will likely try to “print their way out” of downturns, making real asset ownership crucial.
  • Quote:

    “…[For] the average person, you need to start to acquire assets…because those assets benefit from money printing and inflation. Everything else…your purchasing power is getting destroyed on a daily basis.” — Natalie [44:35]

• Gold and Bitcoin as Lifeboats:
  Gold’s price may surge to $16,000–20,000 in coming years, but these are cyclical. The same logic applies to bitcoin, depending on when capital rotates back to “risk-on” assets.

8. Advice for Listeners & Final Thoughts

• Simple, Long-Term Strategies:
  Serve most people better than trading or holding dozens of positions. Focus on broad asset classes and avoid leverage unless you fully understand the risks.
• Wait for Confirming Signals:
  Don’t try to anticipate trend reversals purely on hope. Wait for technical confirmation, such as bitcoin reclaiming the 50-week moving average [54:24].
  • Quote:

    “…It could Bottom much sooner…But for it to do that, as I said before, I want to be back above that 50 week moving average. I’m not going to be on board that we’re in a new trending bull market until we meet the criteria that have defined all previous trending bull markets.” — Kevin [54:24]

Notable Quotes & Memorable Moments (with Timestamps)

• On the importance of clear communication:

  “Getting your audience to understand that, that's really critical…Otherwise, you might as well be speaking Chinese to them.” — Kevin [01:10]

• On the capital rotation:

  “When you get 2, 3, 4, 5, 8, 10, 12 of these things all happening at the same time…It tells you on the image there when that happened—1930, 1972, 2002. …Gold, silver, energy, oil, commodities all go bonkers.” — Kevin [06:24]

• Warning about bitcoin cycles and the potential new pattern:

  “It is not a zero probability that bitcoin will not get above 126 in its next cycle…this chart…tells us that it is very much a possibility.” — Kevin [25:57]

• On technical analysis vs. fundamentals:

  “Fundamentals are the chart and the chart is the fundamentals. It’s one and the same thing.” — Kevin [19:21]

• Risk management as the critical lesson:

  “Control your risk. Risk management is really important…Have in your mind how much you’re prepared to lose.” — Kevin [59:59]

• On simple strategies for average investors:

  “For most people…I wouldn't advise trading…I would advise…keeping it simple, if you can, is the way to go.” — Kevin [51:01]

Suggested Listening Timestamps

• Kevin’s Background & Approach: [00:43–02:27]
• Capital Rotation & Macro Bear Market Explanation: [06:24–12:30]
• Bitcoin Momentum & Chart Analysis: [15:54–18:57, 25:57–32:41]
• Market Manipulation & Technical Signals: [18:57–23:37]
• Bear Market Confirmations & Four-Year Cycles Debate: [31:26–33:00]
• Crash ‘Event’ Mechanics & Historical Context: [33:00–40:11]
• Printing, Inflation, and Why Asset Ownership Matters: [44:35–46:01]
• Gold & Silver Price Projections: [45:59–49:28]
• Simple, Real-World Investment Advice: [51:01–53:42]
• Final Risk Management Advice: [59:59–61:08]

Wrap-Up

For investors:
The message throughout is caution, patience, and education. Understand where we are in macro cycles, resist the urge to catch tops or bottoms, and beware of “perma-bulls” or those pushing unrealistic targets. Both bitcoin and gold are likely to play important roles as fiat continues to devalue, but timing meaningful outperformance requires disciplined attention to key technical levels and broader macro trends.

Find Kevin Wadsworth:

• Twitter/X: [@NorthstarCharts]
• Website: [northstarbaddcharts.com]

If you want a grounded take on navigating bear markets, capital rotations, and how to think about real assets in an unprecedented financial era, this is a must-listen episode.