---
title: 'This Chart Shows Why Bitcoin Is Falling (And What Comes Next)'
source: 'https://youtube.com/watch?v=FW1V2h0kR9w'
video_id: 'FW1V2h0kR9w'
date: 2026-07-31
duration_sec: 944
---

# This Chart Shows Why Bitcoin Is Falling (And What Comes Next)

> Source: [This Chart Shows Why Bitcoin Is Falling (And What Comes Next)](https://youtube.com/watch?v=FW1V2h0kR9w)

## Summary

Bitcoin's recent drop from $81K to $76K is often blamed on the 4-year cycle, but this video argues the real driver is a macro chain reaction: the Iran conflict disrupted the Strait of Hormuz, oil spiked, inflation fears returned, yields surged, and the dollar strengthened—draining liquidity from risk assets. The video breaks down the single chart that ties these forces together and considers whether the setup is temporary or the start of a longer bearish regime.

### Key Points

- **Bitcoin's Drop Isn't the 4-Year Cycle** [00:01] — Bitcoin fell from $81,000 to $76,000. The real driver is a macro chain reaction involving oil spiking, last week's CPI and PPI prints, yields jumping, and the dollar strengthening—not the crypto 4-year cycle.
- **Expectation Flip: From Easing to Iran Shock** [01:10] — The market expected lower inflation, Fed rate cuts in 2026, easier financial conditions, and continued risk-on sentiment. Instead, the Iran conflict escalated, oil exploded higher, and everything reversed.
- **The Strait of Hormuz Trigger** [02:33] — The Strait of Hormuz is one of the most important oil supply chains, carrying about 20% of global oil. When it got disrupted, oil prices skyrocketed and set off the chain reaction.
- **Energy Is Baked Into Everything** [03:13] — When energy prices rise, inflation rises because everything—driving, transportation, buildings—requires energy. This is the core link between oil and inflation.
- **Inflation Fears → Higher Yields → Stronger Dollar** [03:39] — Investors demand higher bond yields when inflation is a concern. Higher yields strengthen the dollar (DXY), which climbs aggressively and tightens financial conditions.
- **Dollar Strength Is a Stealth Rate Hike** [04:07] — When dollar strength goes up, it drains liquidity out of the system via second and third order effects—effectively acting like a stealth rate hike. Bitcoin started dropping around May 11th as the dollar climbed.
- **Stocks Brushed Off CPI/PPI, Bitcoin Didn't** [05:29] — The wider stock market absorbed the hot CPI and PPI prints easily, but Bitcoin felt the direct impact because it sits at the intersection of rates, liquidity flows, and risk appetite—all of which moved against it.
- **The Bullish Escape Route: US-China Pressure on Iran** [07:15] — If the US and China work together to reopen the Strait of Hormuz, oil will fall, inflation fears will ease, yields will stabilize, the dollar will soften, and risk-on sentiment will return—which is bullish for Bitcoin.
- **Four Key Market Signals to Watch** [08:09] — 1) Markets held up despite bad prints (bullish). 2) Iran conflict is under unprecedented pressure to resolve, especially before midterms. 3) Lifting restrictions on Iranian oil may signal an early peace deal. 4) AI enthusiasm and institutional crypto adoption remain strong.
- **The Longer-Term Play: The AI Super Bubble** [11:33] — The author believes the current setup is temporary and sees a future retail-infused AI mania (2027-2029) similar to the dot-com bubble—positioning it as the biggest money-making opportunity of his lifetime.

### Conclusion

The video concludes that Bitcoin's drop is a temporary macro setup driven by the Iran-oil-inflation-dollar chain. If the conflict is resolved—as the author expects—markets could reverse higher, with the bigger opportunity being a future AI super bubble.

## Transcript

has fallen from $81,000 all the way down to $76,000. Bitcoin's about to resume its path lower, going down to 50K before 40K and then 30K. Because in their opinion, all of this is just the 4-year cycle playing
out. But Bitcoin isn't falling because the 4-year cycle or crypto's broken or, Bitcoin is falling right now because a macro chain reaction that has to do with oil spiking, last week's CPI and PPI prints, yields jumping, the dollar
there's actually a single chart that really ties all of this together and paints a really clear picture of why Bitcoin is falling right now. And it also hints at where Bitcoin is likely to head next. So, in this video, I'm going
to be breaking all of that down, talking about is now a time to panic. You know, should you be worried about Bitcoin falling to 50K, 40K, 30K, or is now a buying opportunity, or what's going on with Bitcoin and crypto right now? And
an eye on if you want to kind of gauge the risk for yourself. Okay, so to need to understand what the market was expecting what happened and what ended up playing out. The market expected lower inflation, Fed rate cuts later in
2026, easier financial conditions, more liquidity, and continued risk-on East tensions escalated, this whole conflict with Iran. Oil exploded higher. Remember, you know, just I don't even know, four or five months ago, we had
crushed it in Venezuela, we got all these barrels of oil, we were going to be, you know, oil barons in the the US and oil prices were going to drop, and everyone was going to ride off into the sunset. And then Trump decided to
invade Iran, and then boom, that entire thing flipped on its head, and now oil surging, and it's the exact opposite of what the market expected. This caused inflation fears to come back, bond yields surged because of those inflation
fears, and then rate cut expectations got absolutely obliterated. We went from 2026 Powell's out, you know, Kevin Warsh is coming in here. He's going to just bring in his rate-cutting powers and just absolutely like decimate rates down
to zero or, you know, whatever, 1%, 2%, whatever he was going to send it. And know, flipped on its head. Nobody knows how Kevin Warsh is like we have the most divided Fed like ever. And Kevin Warsh has to come in there and
which just seems impossible given the current setup. It just this whole thing [clears throat] mess. And all this set off a series of chain reactions. First off, the the initial trigger was the Iran conflict in the Strait of Hormuz.
The Strait of Hormuz is one of the most important supply chains for oil on the face of the planet. And when this got disrupted, when oil stopped flowing through the Strait of Hormuz, oil started skyrocketing. It's like 20% of
comes through the Strait of Hormuz. And so when this got blocked, much to block it. They just had to like threaten to like blow up some ships. know, Strait because they didn't want to die. When that happened, oil prices
out, and this kind of set off this whole chain reaction of events that we're now living through. As I mentioned all the time, oil energy that is baked into everything, okay? Everything requires energy. When you drive your car your car
to work, when things are getting transported across the world, everything uses energy. Your office building uses energy. It literally everything. And so when the price of energy goes up, inflation goes up. Inflation is just
much it costs to buy things. And everything gets more expensive when it know, all of these different things. And this kicked off higher yields. When people have inflation fears, when they're worried about inflation, yields
surge higher because investors demand higher yields on bonds. And when yields surge, that leads to a stronger dollar. So that causes the DXY to climb, and not by a little. It's been climbing every day up inflation prints landed hot. And
dollar started climbing. It started climbing pretty aggressively. And you'll also notice that coincides almost perfectly with when Bitcoin started dropping in price. So, on May 11th right here, you can see from that point on,
And that's because when dollar strength goes up, it drains liquidity out of the system via second and third order effects. When dollar strength goes down, it flushes the system with liquidity. It's really bullish for the markets. You
can almost think of dollar strength going up is like a stealth rate hike. Uh because in a lot of ways it does it accomplishes exactly the same kind of thing. When you hike rates, the point is to crush inflation, and that ends up
reducing liquidity. In the same exact way, when dollar strength goes up, it also crushes inflation because uh in dollar terms imports end up getting stronger and it can pay for more things. And then on the opposite end, this ends
strength going up right now is a in response to the higher inflation and higher yields. It also happens to be that on May 12th and May 13th is when we got the CPI and PPI prints. So, you can see what happened on May 12th, you can
see what happened on May 13th and into the 14th. This is really around inflation fears. It really is the chain reaction of, you know, invading Iran causing oil to spike, inflation fears to rise, causing yields to surge, causing
dollar going higher tightens liquidity as I said, and that causes risk assets, especially Bitcoin, to end up falling. Bitcoin's extremely sensitive to Bitcoin tends to fall. Now, let's talk about the CPI and PPI prints that came
in last week. I said last week that those would be really heavily determine what ended up happening with the markets going forward. And as we saw, that had a pretty heavy impact on the market. And what I said was it was really
important to see how the market reacted to these things. And what we saw with the stock market is actually it brushed off both the CPI and PPI print, which market just kind of brushed it off as if it was nothing. Um there was, you know,
a reaction, but pretty quickly, you know, any losses were kind of eaten up climb higher. It absorbed that bad news, you know, pretty effortlessly, which is market as a whole. But there was still direct impacts on the market because of
those hot inflation prints. And those impacts actually had a a bigger impact stock market because of crypto's relationship or Bitcoin's relationship with liquidity, as I mentioned earlier. Bitcoin is unique in that it sits in
this intersection between rates, liquidity flows, and risk appetite. And all of those things moved against Bitcoin at the exact same time because of these high inflation prints. So, really, the big issue right now is
inflation. It is this conflict in Iran. It is everything happening around that is going to determine what happens next with Bitcoin's price. And so, things going forward. You can see tensions rise with Iran. You can see, you know, oil
continue to spike higher, inflation continue to spike higher, and then, you inflation get higher, each time oil continues to go higher, that's making the market more and more fragile. And so, as you see that pattern play out,
not going to just happen overnight. As that pattern continues to play out, that Bitcoin's getting more and more fragile and is more and more likely to see a leg lower. But on the opposite end of the spectrum, uh which I actually
especially what just happened with the US-China peace summit, if we see tensions cool in the Middle East, okay? So, China just came out and said, "Hey, Hormuz closed either. We're going to work with the US to make sure that
you're going to see the price of oil fall. If oil falls, that will ease inflation fears. Even if we get a couple more higher inflation prints, the market know, obviously this is from the Iran conflict. That's over now, so this is
blip in higher oil prices before things go lower. That'll cause yields to stabilize. That'll cause the dollar to soften. And that'll create a risk-on Bitcoin. Especially if you look underneath, AI enthusiasm isn't running
short or or running low. This will only continue to grow. Liquidity conditions with them. Specifically, in terms of like the wider picture, crypto adoption and the institutions' interest in crypto and all of that isn't slowing down. And
good. So, there's basically four things one is that, again, markets did hold up the the wider stock market because that Bitcoin and crypto. Held up pretty well despite the CPI and PPI prints, which is
really bullish. Right now, the Iran conflict has like a new high in pressure China and the US collaborating. Especially the closer we get to doing in terms of midterms. Like he is really really screwing himself in terms
of midterms. He has to get on this right now. And so, you can expect more and more pressure to get this Iran conflict wrapped up as soon as possible. In fact, about this where it looks like they're lifting some restrictions on oil from
Iran and all kinds of other things that might be an early sign of maybe maybe finally a peace deal. I don't know. This has had a lot of twists and turns. So, we'll see. But there is an unprecedented amount of pressure to end this right
now. And it doesn't have to be a full-on peace deal to get it wrapped up. Really, what we need is the Strait of Hormuz open. So, any sort of deal that gets the Strait of Hormuz open, oil flowing through, that feels semi-permanent is
enough to get that, you know, kind of wrapped up. Kind of an X factor is the new Fed chair and inflation and what's going to go on with that. We know or we suspect that Kevin Warsh has some sort of bias to kind of do what Trump wants
interviewed a lot of Fed chairs. He said he was going to interview based on who would lower rates. So, we know Kevin Warsh had to sell Trump on like for some reason he was going to be the guy to lower rates. So, you know, I don't know.
don't see how he could do it given how divided the Fed is right now, given how bad inflation is right now. But, that is something to watch. And then the last kind of major tailwind is actually the China peace deal is, you know, actually
whole trade war, all of this tariff madness, and and stuff like that. Um bearish for the market that just really got wrapped up. And China working together with the US against Iran is insanely bullish to to get that wrapped
Iran's ace up the sleeve, sort of, right? And and if the US and China are that's a lot more pressure on Iran. So, to bring it all together and wrap it up, right now is more of a temporary setup. It could become permanent uh depending
on how things play out, depending on how long this conflict with Iran lasts. If is going to last years and years and years, then yeah, this is like the new permanent macro regime. This will eventually impact the stock market, and
it's going to be just overall really negative for the overall market. If, which I do view it as temporary. I do think we're going to figure out something in the near term. There's just too much pressure to do otherwise. Then
right now the market's expectations are really negative in terms of inflation it's flipped to uh because of the recent prints, etc. And so, any of these things unwinding, any of these bullish catalysts coming when the conflict ends,
is a surprise and expectations to the upside, which means it's a a bullish the market higher and and structurally be very bullish for crypto, Bitcoin, that I currently sit on. I think this conflict with Iran will get wrapped up
street of four moves will get worked out sooner rather than later. I firmly believe October will not be the bottom like most of the bears are believing, and in fact will be higher uh you know, quite a bit off the bottom by October
higher. And I think all of this is leading up to what I call the AI super bubble. It's going to be a retail infused mania like the 2021 everything bubble, like the 2000s dot-com bubble, where retail just goes absolutely
bananas over the absolute garbage of the market just like they do every single time there's a new technology that hits the market. And I think AI's super rule them all, the ultimate retail infused mania. I don't know when it's
it's not going to be 2026. Uh it could be 2027, 2028, or 2029. But my long-term plan to make a fortune, cuz I think this is going to be the biggest money-making opportunity of my lifetime, is to play that bubble. Now, in the short term, uh
going to be a lot of money to be made in 2026 just to be completely honest. I a decent year. I don't think it's going to be as bearish as the bears think. But extremely bullish by the end of the year. So, right now I'm mostly
portfolio. I'm being really careful and strategic with what I'm holding and why I'm holding it because it they got to be kind of sort of long-term assets that which there's just not a lot of alts that can do that. And then I've been
like trying to build out different like following me for any amount of time, like since 2022, I've been using AI to build out different things. And I I've
model that for over 3 years did around 50 to 60% annually, which is pretty was the Ghost Traders strategy. I've also tried just about every passive income idea out there, like literally every so many different like Ponzi's and
know. I I guess I am always seeking that golden goose strategy, you know, something that can just print income month after month after month. I know There's a guy in the OC that does, you know, he has his his own strategy. He
does 5K to 15K a month. I know plenty of other people that have successfully done day trading uh for years and and they'll make similar amounts. 20 20k a month, myself I've done day trading. It was amazing. I did I did make like 90k in a
this is I've never made more money in my life." But then you know, in one month I lost like 80% 80% of that. It was super fun, but then it was also kind of super miserable and maybe the most stressful thing I've ever done in my life
was day trading. And I've seen so many of these guys like make you know, James what he started at but all the way up to a 100 million and then lost all of it and now he's down to like $4,000. I've seen so many people do that where they
it. And what that shows me is it's really easy to lose that money but two, it's also seemingly really easy to make that money. There are strategies and things out there to make that money that these guys that don't seem you know,
that incredibly smart are able to do. And so I I don't know maybe it's kind of trying to figure out what those strategies are. And like I I've been I've been I've been searching for a long
lately for about the last year and a half is building out those strategies with AI like coding them with Codex and Claude etc. And I built this whole data kind of crazy stuff to do that. And so that's kind of like a a side venture
that hasn't really yielded much fruit at all yet. It mostly just cost me a ton of side quest I've been doing. And maybe just a casual reminder that you you know, like yeah, big market everything bubbles take a long time they're really
like notoriously hard to predict but historically they have always come with gives me so much confidence we will see an AI bubble. But in the meantime as you're waiting for that bubble, there's a lot more things to do in the market
And while you wait make the most of your time and keep growing yourself and learn seeing my entire portfolio or you want to see every time I buy and sell various tokens as well as different weekly video market updates. Uh currently the
wait list in the description of this video. As always, none of this is money. I'm obviously not your financial advisor, do your own research. If this video is helpful, make sure to hit that like
subscribe button and the little bell next to it to be notified each time I release a new video. Thanks for watching, and I'll see you next week.