Crypto analyst Miles Deutscher has made one of the strongest bottom calls of this cycle, assigning a 91.5% probability that Bitcoin has already bottomed. In an
Has the Bitcoin Bottom Been Reached?
German bases his belief on four ‘pillars’: market reaction to news, the historical behavior of FUD events, a shift in flows and an improving global liquidity backdrop. Each pillar is scored in an internal model culminating in a bullish value of 91.5/100.
He starts with price behavior versus headlines. He notes that the market has digested an “influx of bad news” in recent days – including renewed Tether FUD, a new round of “China banning crypto,” MicroStrategy research and concerns around a Bank of Japan-led yen carry trade.
“Despite all this bad news, the price rose,” he writes, calling this “the first time since the big sell-off began” that Bitcoin has responded positively to a destructive news cycle. He underlines an old business adage: “The reaction to news is more important than the news itself. This tells you everything you need to know.”
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The second pillar is a systematic look at whether such FUD clusters tend to coincide with local lows. Deutscher says he backtested “every time Tether, China, BOJ and Microstrategy FUD came to market” in a similar manner. His conclusion is stark: “Each time, these FUD events marked a local low. Tether FUD = bottom.
China ‘bans’ crypto = bottom. Bank of Japan/carry trade concerns = bottom. Microstrategy FUD = bottom.”
Based on this, its AI model awards the maximum score of 28/28 to this pillar. He cautions that “this factor on its own doesn’t matter much,” but argues that, in combination with the first pillar, it “begins to paint a compelling bull case.”
The third pillar is flows, which he calls “the most critical factor (net buying/selling pressure)”. In recent weeks, flows have been “aggressively negative,” with OG whales being sold and ETFs being dumped. Recently, he argues, this picture has changed. ETF inflows “are starting to stabilize and increase,” government bond holdings remain stable, and “OG whales have stopped dumping relentlessly (this is clear in the order books).” This results in a score of 22.5/25 in his model. He adds one important caveat: As long as DATs exist, “there are material risks.”
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The fourth pillar is the liquidity and macro environment. Deutscher notes that market liquidity had been tightening for months, but now “things are shifting back toward greater market liquidity,” with global financial conditions “having once again eased to near a peak.” Highlighting the “macro tailwind,” he adds that a new, potentially more dovish Fed chairman is on the way and that “QT has now officially ended.” This set of factors receives a score of 9/10 in his framework.
Combining all four pillars leads to the main figure: “If we take all four market pillars into account, we arrive at a final score of 91.5/100.”
However, Deutscher explicitly mentions caveats. He points out that US markets are “on a massive run” and may need to cool, that DATs are “still under pressure in the near term” and that ETF flows “could turn negative at any time.” His conclusion is probabilistic rather than absolute: “Markets are a game of probabilities, and I think the odds favor the bottom – given the extreme FUD we’ve had and the market’s reaction to it.”
At the time of writing, Bitcoin was trading at $91,035.
Featured image created with DALL.E, chart from TradingView.com