The "Trump Trade" in the crypto market has turned to dust.

Bitcoin not only reversed its gains but plunged to -10% below its pre-election level.

What broke wasn't the asset itself. It was the global liquidity machine, and AI is also to blame.

Understand the rationale in 10 points.

1- The Paradox

The investor looks at the screen and doesn't understand: the investment thesis hasn't changed.

There was no ban in China, no hack at a brokerage, or Bitcoin failure.

The narrative(!!) of "Digital Gold" and institutional adoption remains identical to that at the peak.

But the price plummeted.

Price doesn't just follow fundamentals.
Price follows liquidity.

And liquidity disappeared.

2- D-Day: October 10th

Data analysis points to a change in behavior on October 10th, the market peak.

Four days later, there was a record sell-off of US$19.5 billion.

Between November 15th and January 15th, Bitcoin traded sideways. It seemed like accumulation, but it was distribution.

There were constant "liquidity gaps" in both directions.

The price jumped without volume, and market sentiment continuously worsened.

It was the final warning that the structure was deteriorating.

Finally, the support broke on January 16th.

3- The Empty Order Book (Market Depth)

Why does Bitcoin drop $2,000 in minutes for no apparent reason?

It's due to market depth.

The number of buy orders waiting in the order book to hold the price is 30% below the peak.

The market has become "thin." Without this cushion of orders, any large sell-off will quickly bring down the price.

4- The Liquidation Cascade

With the market empty, volatility explodes.

Since January 24th, approximately US$10 billion in leveraged positions have been liquidated.

When the price falls and breaks support levels (as it did on January 16th), it forces these people to sell, pushing the price even further down.

5- General Contagion

One sign that the problem is systemic is the correlation.

The fall in cryptocurrencies almost always accompanies the correction in technology stocks.

And sometimes, technology stocks follow the falls in cryptocurrencies.

However, there is an important difference in this relationship: while tech has record profits, crypto depends on speculative flow.

And that flow has changed direction.

6- The Tech & Saylor Massacre

Many tech stocks are bleeding along, but the Bitcoin "proxy" has been decimated:

• (Micro)Strategy ($MSTR): Officially -80% since its Nov/24 peak.

• Michael Saylor's Pain: The firm's Bitcoin position is negative by -$6.5 BILLION.

• Coinbase ($COIN): -66%
• Magnificent 7: Lost nearly $3 Trillion in market value.

7- Where did the money go? (i)

The "Black Hole" of AI
Global investors are funding or investing in technology companies with projects linked to the development of artificial intelligence.

AI has become a global liquidity vacuum.

Venture capital seeks not only risk, but also return.

8- Where did the money go? (ii)

Gold vs. Bitcoin (The Divergence)
While Bitcoin suffers from this drought of private liquidity, gold rises (+68%) in the period.

The difference?
Besides being used for protection against global geopolitical and Trumpist noise, gold has been massively purchased by Central Banks.

Bitcoin depends on the private market, which is "short" of cash, in addition to being heavily allocated to other growth and cash generation theses.

9- Selling Pressure

The drop of -$9,000 on Thursday bore the hallmarks of the "sharks".

Unlike retail panic (which is quick, reverses, and/or causes volatility), the selling was constant and mechanical.

This gives the impression that large institutional players were being forced to liquidate significant positions, overwhelming an already empty order book.

10- The End of the Political Narrative

By losing the election price, Bitcoin "reset" the political narrative.

The market returned to looking at economic reality: without the Fed injecting money, and with AI sucking up available capital, political optimism alone cannot sustain the price.

What to Expect?

The bottom of the market doesn't usually come with good news; it typically comes with exhausted selling.

We need to see:

• The price stop falling even with bad news.
• Final capitulation (desperation).
• The return of liquidity in the order book.

We are still in the middle of the cleanup.