oinonen_t2025-11-21

The Distribution Cycle

[Backdrop] After a promising October, cryptocurrencies have weakened significantly in November, with bitcoin sliding -23% in 30 days. The effects of the October 10th liquidation event (also known as 10/10) are still present, with investors, and funds heavily underwater. Additionally, there are rumors of DAT-related challenges. Analysts Charles Edwards and Lyn Alden have been warning about Bitcoin’s quantum risk exposure. Edwards talks about “Q-Day” that could shatter the network’s security. In his scenario, ~20-30% of bitcoins in exposed public-key addresses would be stealable. ​​Edwards demands a 2026 consensus soft fork for post-quantum signatures (e.g., lattice-based like Dilithium or hash-based), via BIPs like 360, despite challenges like 100x larger signatures bloating blocks and reigniting the block size debate. [Accumulation and Distribution] Dow theory has been beneficial for understanding current market mechanisms of traditional and digital assets. In a simplified way, the Dow theory divides market movements into two phases: accumulation and distribution. Applying the Dow theory, bitcoin’s year of 2022 represented a clear distribution cycle, bringing bitcoin into a technical inflection point at the turn of 2022-2023. In 2023, bitcoin faced a new accumulation cycle, which lasted through 2024 and early 2025. Now we’ve moved into a new distribution cycle. [Looking Forward] As CQ’s Julio Moreno recently mentioned, “once bitcoin breaks below the 365-day MA, it’s pretty difficult to recover. Judging by the data of how previous bear markets started, I would say we are in one.” Moreno expects bitcoin correcting to $72,000, representing a plausible estimate. If this cycle correlates with bitcoin’s historical performance, BTCUSD could touch the 2021 cycle top of $69,000, before finding organic support.