Invest Answers3 min read
InvestAnswers: Bitcoin seller exhaustion data points to post-Fed bounce
James argues onchain loss-selling has dried up ahead of the Fed, while October's "Uptober" rally failed to materialize across crypto.
AI summary of “Bitcoin + Fed 🏦Proxies, Exchange Bal, Uptober Cancelled? 📉FSD, Cerebras x ORCL”
Key takeaways
- James says Sober data shows realized-loss selling of about $1.41 billion spiked on October 22-23 and has since dried up, expecting a post-Fed bounce.
- Bitcoin is down 3.6% in October and trading near $80,679; most altcoins fell harder, with XRP down 13.68% and Solana down 17% over 30 days.
- James's historical FOMC study finds Bitcoin rose a median 5.9% between Fed meetings with a 60% win rate, and a DCA-after-Fed strategy since December 2022 would have returned 402%.
- Exchange Bitcoin reserves are falling across most major exchanges per Glassnode, which James calls "the great exchange drain," a bullish sign for scarcity.
- Mt. Gox pushed its Bitcoin repayment deadline to October 31, 2027, removing near-term forced-selling overhang.
Tokens mentioned
The speakers' views, not ours
Expects post-Fed bounce after seller exhaustion; cites 402% return from post-FOMC DCA strategy
“This tells me based on this data the selling is done and we're probably going to get a bounce tomorrow after the Fed meeting.”
ETF outflows over $100 million in a day; stablecoin reserves bled over $1.2 billion
“This has just been selling, selling, selling, selling, selling since September really badly.”
Leads all L1s and L2s in revenue for seventh straight week despite price down 17% in 30 days
“Salana Dap surpassed all L1 and L2 chains in revenue.”
Seller exhaustion and a rough October for crypto
James opens by noting Bitcoin's Google search interest is near the bottom of its range, suggesting retail has not returned despite the rally narrative. He frames October as disappointing: Bitcoin is down 3.6% for the month and trading around $80,679, while Ethereum fell 13% and Solana 17% over 30 days, with XRP down 13.68% and Hyperliquid down 13.3%. He points to Sober onchain data showing a spike in realized-loss selling on October 22-23, totaling about $1.41 billion, which he interprets as capitulation ahead of the Fed meeting.
He argues this selling has now dried up, calling the episode "Sellers Ran Dry," and expects a bounce once the Fed decision passes. He also flags Bitcoin ETF outflows of roughly $8 million a day as mild compared to September's record inflow day, though Ethereum ETFs saw over $100 million out in a single day, a trend he says has persisted since September "for some reason, and I don't know why."
"This tells me based on this data the selling is done and we're probably going to get a bounce tomorrow after the Fed meeting." — the host
Separately, he reports Mt. Gox has pushed its Bitcoin repayment deadline to October 31, 2027, removing near-term forced-selling risk, though he questions why distribution is taking so long. He also highlights a "great exchange drain": Glassnode data on 11 exchanges holding at least 1,000 Bitcoin shows six holding less than a year ago, with a median decline of 6.4%, which he reads as coins moving into harder-to-sell custody like ETFs.
The Fed meeting and historical Bitcoin performance
James presents his own study of Bitcoin's price action between FOMC meetings since the last bull market top. He finds a median return of 5.9% after Fed meetings, an 18-up, 12-down record (60% win rate), average gains of about 19% versus average losses of about 10%, a roughly 1.7-to-1 payoff. He says buying Bitcoin after each Fed meeting and holding since December 2022 would have produced a 402% total return through compounding.
He also states there will be no rate hike, arguing current inflation is driven by Iran-related high energy and oil prices rather than conditions that would justify tightening, and claims jobs data is "very bad" even though it is not yet visible in reported figures. He notes Bitcoin's correlation with gold is the highest in a long time, which he says may reflect investors treating Bitcoin as a hedge against technology or the AI trade.
"The odds favor those that don't get spooked out by the Fed meeting." — the host
AI trade rebound, Tesla FSD milestone and Bitcoin bear reactions
James describes a sharp rebound in AI-linked stocks on the day of recording, with Tesla up 4% and up $60 over seven trading days, AMD, Marvel and ALAB all up big, and memory stocks recovering. He ties part of Tesla's move to Full Self-Driving data: cumulative FSD miles have reached 16.7 billion, and he cites a figure showing FSD now achieves about 6 million miles per major collision versus 660,000 for an average human driver, which he says makes FSD roughly 10 times safer in US data. He separately notes Cerebras struck a deal with Oracle for fast AI inference within Oracle's cloud, which lifted both companies' shares.
He closes by mocking Bitcoin bears, including a reference to someone he declines to name predicting Bitcoin "going to zero," and another figure, Jason, predicting a tank, both of which he dismisses given the market has been in what he calls a bull trend for three to four months.
"Every time Bitcoin goes up it causes them tremendous anguish and pain and they hate to see others win." — the host
Written by AI from the video's transcript. It can compress, misattribute or miss context — the original video is the source. Not investment advice.
