Dear Bitcoiners,
Agentic AI attacks are truly getting sophisticated. Wild days, with this time Binance being hacked for billions. Most of the stolen funds were crypto coins and stablecoins, with stablecoin issuers being able to freeze a substantial amount. Bitcoin was a relatively small part. Incredible that Binance appears to be able to cover most of the losses, users will likely be unaffected, and contagion has been kept at a minimum. This could have been much worse.
But the lesson is that every new feature, of which most crypto projects have many, creates new attack vectors. Exactly for this reason, which is even much more relevant in a world of AI, Bitcoin has always been conservative toward upgrades.
Price Action in Response to Binance
For the past few weeks, Bitcoin has been trading right above the ETF Cost Basis. It has been tested several times, and each time, until the Binance hack, we saw support. While Bitcoin dropped below, it does not necessarily look weak here. A reset toward the STH Cost Basis was something we already considered a healthy possibility after the strong breakout.
Of course, it is exactly at these moments that sentiment hurts the most, but if Bitcoin manages to hold the STH Cost Basis (or quickly reclaims it if we were to drop below), we might get an excellent setup for the next rally.
👉 Key insight: The drop toward the STH Cost Basis had a clear catalyst. But as the Binance hack looks to be contained, the probability increases that this is the textbook reset we were waiting for rather than the start of another capitulation.
However, another factor to keep in mind is the U.S. midterm elections next Tuesday, November 3, and how markets respond to them. There are also additional important insights for this reset when looking at STH Momentum. We’ll discuss that chart below!
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See You at Bitcoin Amsterdam!
But before we dive into STH Momentum, I want to share what I’ve been working on. Last week, I skipped the newsletter to prepare for my Bitcoin Amsterdam presentation.
I’ve prepared one continuous visual journey through the Bitcoin cycles, using the 3D spiral, cycle analysis, and on-chain data to explain how this cycle has been different.
I’ll be presenting “This Cycle is Different” next Friday, November 6, at 2:55 PM (Amsterdam Time) on the main stage.
Didn’t get your ticket yet? Use code ROOT for 10% off. Click here: ba-tickets.b.tc
Next Friday, instead of my regular newsletter, there will be a live presentation from Bitcoin Amsterdam!
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