Welcome back to The Breakdown with me, NLW.

It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.

What's going on, guys? It is Tuesday, September 23rd, and today we're talking about September doing September things. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. Well, friends, the week is off to a rough start with Monday seeing a major drawdown in Bitcoin.

After trading comfortably above $15,000 all weekend, Bitcoin dropped in two big moves on Sunday night.

After beginning the day at $112,500 on Monday, a choppy day of trading saw a low of 11,500.

All told, this was a drawdown of around 3.5%. And we're still talking about Bitcoin trading well above 100K, but the move was still enough to catch

some traders offside. Zhao Wedson commented, Bitcoin is already showing signs of cycle exhaustion

and very few are seeing it. Well, Panda posted, most of you are not ready for this conversation.

The NASDAQ is outperforming Bitcoin since 2021. Bitcoin has three months left to take off where

there's no point holding through the volatility for these returns. But that's not a popular

opinion. What is popular is Godzilla candle soon. Many noted that Bitcoin is also looking

like a pretty underwhelming trade compared to gold this year. While the move wasn't that large, it drove the biggest long liquidation so far this year at 1.7 billion. At this stage in the cycle, it feels as though essentially all of the volume is coming in the form of leveraged bets rather than spot buying. Onchain analyst checkmatey posted a chart commenting, for a matter of perspective, this is the current unrealized loss profile of Bitcoin derived from on-chain data. An unrealized loss means a coin was acquired

at a price above 112k, and were measuring the negative delta between the cost basis and spot

price. Squinting to see it. Another noteworthy component of this drawdown was the complete lack of

volatility heading into the event. Jeff Park of ProCap Bitcoin posted,

the last time Bitcoin's 90-day realized volatility was this low was the end of 2016. And everyone

remembers 2017, generally there's a sense that this was a healthy reset. Michael Vandapop tweeted

a classic Monday morning liquidity sweep on the markets. It was slightly overdue.

Excitement through the roof. And then the all coins and Bitcoin price is getting flushed, so over-leveraged positions are taken out of the markets. It was slightly overdue. Excitement through the roof, and then the all coins and Bitcoin price is getting flushed so over-leveraged positions are taken out of the markets. These dips are the ones that you should be interested in to be accumulating your positions. Ash Crypto wrote, this is the biggest liquidation of the year, with over 95% coming from long positions. Why is an event like this important? The market is overheating. Overleveraged longs need to get flush to reset the market. Now, the market is setting the stage for the next major move in Q4. For many, the September was going altogether too well, so it was high time for a bit of a correction. On Friday show, we talked about how this was the best September on record at a positive 8% move. Scott Melker commented that we could be celebrating a little early and he couldn't have been more correct. Bitcoin is still up 4.5% for the month, which is still the third best September ever. For a lot of people, the month, though, is no longer about taking risk. It's about waiting until October, which is historically one of the best months for Bitcoin. All told, this wasn't the most painful drawdown you could imagine, but resetting the leverage in the system is still meaningful. Bitcoin is less than 9% off of all-time highs, so in a historical context, it's a long way from the brutal 30% drawdowns that were common during the last bull run. Broadly, though, the vibes are a little off. Rachel Lucas, a crypto analyst at Bitcoin Market said, the fireworks from earlier this year have fizzled. Investors are cautious, long-term holders aren't panicking, but short-term traders are restless. On-chain data shows holders aren't selling, so sentiment is more nervous optimism than outright fear. Now, if you're looking for an indication of where we go next, there are a few meaningful tweets from traders who have seen a cycle or two.

Firstly, Binance founder, CZ is back on crypto-twitter and offering daily takes on the market after being largely absent for the past few years. He commented on Monday,

dips are important for establishing support levels, which are like foundations of a house.

GCR has also returned posting behind a private account. If you've been sidelined,

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