Podcast Summary: The Wolf Of All Streets

Episode: The REAL Reason Bitcoin COLLAPSED? (Not What You Think)
Host: Scott Melker
Date: February 6, 2026

Episode Overview

Scott Melker hosts a solo episode to unpack the dramatic recent crash of Bitcoin below $60,000, exploring possible causes, dispelling popular myths, and offering perspective on what the bottom might look like. With trademark candor and humor, Scott navigates through market dynamics, institutional behavior, technical analysis, and community sentiment, all against the backdrop of one of crypto’s ugliest days.

Key Discussion Points & Insights

1. Market Wreckage and Record Downside

• Historic Drop:

  • Bitcoin experienced its largest-ever daily decline (over $10,000), which outpaced previous records of market carnage.
  • “[Bitcoin] just posted its first ever daily decline of over $10,000... Not even the record 19.5 billion liquidation on October 10 came close to today.” – Scott [04:25]

• Velocity & Volume:

  • The selling was relentless, with high volumes and no significant bounces.
  • “[There was] no wicks, no bounces, no nothing. Just systematic selling.” – Scott [06:05]

2. OG “Whale” Selling: Changing Bitcoin Ideology

• Old Guard Exit:

  • Some early Bitcoin adopters (OGs) are exiting, many expressing the sentiment that Bitcoin has “lost its way.”
  • “A friend of mine...dumped all his bitcoin...When I asked why, he said because bitcoin is dead...” – Scott [09:11]
  • Major on-chain moves noted, with “tens of thousands of bitcoin being sold every five seconds by wallets that had never moved their coins since the very beginning.” [09:50]

• Ideological Frustration:

  • Original libertarian ethos feels replaced by mainstream adoption, regulation, and Wall Street involvement, leading some OGs to defect.

3. Institutional Mechanics: Derivatives, Liquidations, and ETFs

• Options & Leverage:

  • The explosive growth in Bitcoin options and futures (notably via IBIT) has concentrated risk and leverage.
  • “Volume on IBIT has been absolutely insane...over 10.7 billion yesterday.” – Scott [12:40]
  • Cross-margin blowups in funds, especially in Asia, possibly triggered systematic selling.

• Ongoing Liquidations:

  • “Every day for the last few months...is an FTX-level event of liquidations.” – Scott [14:31]

• ETF Outflows:

  • Massive outflows from Bitcoin ETFs (over $400M in a single day, $2.2B YTD), intensifying downward pressure.
  • “The total since collapse is around $8 billion...Forced to weather what feels like a Cat 5 hurricane.” – Scott [17:22]

4. Recurring Patterns: Bull Market Retracements & Useless Indicators

• Market Memory:

  • Scott compares the current crash to previous cycles, such as the 2021 drawdown from $65K to $28K, stating, “We’ve literally seen this movie before.” [22:39]
  • “The size of this retrace doesn’t mean that the ultimate top is in. Maybe there’s still a blow-off top yet to come at a much higher price.” [23:44]

• Failed Top Indicators:

  • Criticism of overreliance on technical “top” signals (pie cycle top, rainbow charts, etc.):
    • “Just because something has worked two or three times in previous cycles is not statistically relevant.” [21:02]
    • “Every single indicator...turned out to be completely useless so far.” [21:38]

5. Sentiment and Capitulation: Are We Near the Bottom?

• Crowd Logic & Support Levels:

  • Speculates on common crowd psychology; warns that popular support zones (like the $57K MA) are rarely as neat as traders expect.
  • “The crowd rarely gets what they want.” – Scott [25:21]

• Mining Economics:

  • Points to the current electrical mining cost ($58,470) as a historically significant floor, suggesting miners will defend this area aggressively.

6. News Cycle & Mainstream FUD: MicroStrategy’s Position

• Saylor’s Resilience:
  • Despite negative headlines (e.g., $12.4B paper loss), MicroStrategy’s actual risk profile is distant and overhyped by the media.
  • Quote from Fong Le, MicroStrategy CEO:
    • “Bitcoin needs to go down to $8,000 a coin and sit there for five years up until 2032 before we really have a problem.” [34:22]
  • Scott: “Anybody think we're going down another 80, 90% from here? I don't. So stop talking shit about microstrategy.” [36:10]

7. Capitulation Signals in the Industry & Macro Context

• Layoffs and Exchange Retrenchment:

  • Recent layoffs at Gemini (25% staff, exiting multiple regions); similar moves in previous cycles often coincided with major bottoms.
  • “This is the same kind of capitulation behavior that you see in markets, even with retail, who’s just forced to sell at the bottom.” [38:32]

• Comparing Silver & Bitcoin Volatility:

  • Notes that other assets (like silver) have had equivalent drawdowns without panic or existential fear.

Notable Quotes & Memorable Moments

• Scott on debate and open-mindedness:

  • “If listening to someone be bearish, even if they’re wrong or early, makes you feel emotionally triggered, then you need to look in the mirror and pull a Taylor Swift – It’s me, hi, I’m the problem, it’s me.” [07:50]

• On OGs selling and changing Bitcoin:

  • “There’s a sentiment that ‘f this, this is not what I signed up for...I’m a libertarian, I’m a billionaire, and I’m out onto my solar yacht in the middle of the ocean where nobody can mess with me.’” [11:58]

• On leverage and liquidations:

  • “Who is using leverage right now? Like what jackass is like, ‘you know what, we’ve gone from 126 down to 80... I’m going to get that 100x leverage. If we go down 1%, I’m toast.’” [15:08]

• Sentiment on price predictions:

  • “When everyone is looking for price to bottom at a specific level...The crowd rarely gets what they want.” [25:21]

• MicroStrategy actual risk:

  • Fong Le: “Bitcoin needs to go down to $8,000 a coin and sit there for five years up until 2032 before we really have a problem being able to satisfy the convertible note.” [34:22]
  • Scott: “Even Mike McGlone isn’t that bearish.” [34:50]

• Final advice:

  • “If you’re actually here because you believe in bitcoin long term, you’d rather be buying at $60,000 than $126,000...For you, one bitcoin is one bitcoin.” [44:03]
  • “View Bitcoin like your house... And if shit goes bad enough, honestly, I’m going to tell you, just move into your bitcoin. Live there. Live in your bitcoin. You don’t need a house.” [44:47]

Important Timestamps

• 00:01-03:50: Market context and introduction.
• 04:25-06:30: Massive daily decline, volume, and liquidation records.
• 07:50-09:30: Viewer backlash over bearish guests; value of debate.
• 09:11-12:10: OG whales selling; Bitcoin’s lost ethos.
• 12:40-15:30: Options market role in the crash; Asian funds and liquidations.
• 17:22-18:42: ETF outflows and retail capitulation.
• 21:02-23:50: Meaningless “top” indicators; historic parallels.
• 25:21-28:14: Crowd psychology and MA support levels.
• 34:22-36:10: MicroStrategy’s risk; Fong Le soundbite; debunking media FUD.
• 38:32-41:50: Layoffs as market bottom indicator; retrenching exchanges.
• 44:03-45:10: Scott’s long-term view; practical advice and closing.

Tone and Style

Scott Melker blends sharp analysis, market skepticism, and irreverent humor throughout the episode, poking fun at herd mentality, technical analysis “cargo cults”, and the emotional rollercoaster of crypto trading. He calls for resilience, perspective, and a long-term approach, offering both tough love and consolation for battered listeners.

In Summary:
Scott Melker offers a spirited, clear-eyed take on the Bitcoin collapse—highlighting the complex technical and psychological factors behind the decline, urging listeners to ignore panic and focus on long-term conviction, and warning not to trust easy answers from memes or pundits. This episode is essential listening for anyone trying to make sense of Bitcoin’s wild swings and the mood of the crypto community.