MarketsOpinionBitcoinAirdropEthereum
|6 min ReadSnow Forecast: Why Bitcoin Must Crash Before It Can Soar to $250,000
Maya Chen
Senior Analyst
Published
Jan 16, 2026
It is that time of year again. I become an armchair meteorologist. I am obsessing over La Niña and El Niño, trying to figure out when winter begins in Hokkaido. Just like in skiing, you often have to make decisions with incomplete information. Sometimes you arrive at the mountain and it is covered in dirt. Other times, you get the most epic powder day of your life.
Right now, the financial weather is turning cold. I check the data points, and I see a storm coming. Bitcoin is the free-market weathervane of global fiat liquidity. It trades on the expectation of future money supply. Since April, I called for "Up Only." I thought Trump and his Treasury Secretary, Buffalo Bill Bessent, learned their lesson. But the forecast has deteriorated.
The Great Liquidity Divergence
From its all-time high in early October, Bitcoin is down 25 percent. Altcoins are getting beaten harder than a capitalist in a New York City election. What happened? The rhetoric hasn't changed—Trump still wants cheap money. But the liquidity has contracted.
Here is the ugly truth: My USD Liquidity Index fell 10 percent from April 9th, while Bitcoin rose 12 percent. That divergence shouldn't happen.
Why did Bitcoin go up when liquidity went down? Institutional investors piled into ETFs. Or so the narrative goes. But I have to tell you, this was not real belief. This was a game.
The ETF Trap: It Was Never About Bitcoin
The largest holders of the biggest ETF, BlackRock’s IBIT, are not long Bitcoin. They are playing a basis trade.
These are hedge funds and banks like Goldman Sachs. They buy the ETF and simultaneously short the CME futures contract. They earn the spread—the basis—between the two prices. It is free money. When the basis is high, they buy billions of the ETF, making it look like massive institutional demand.
But recently, the basis fell. The trade isn't juicy anymore. So they dump the ETF. Now retail investors see outflows and panic, thinking Wall Street hates Bitcoin. It is a negative feedback loop. The flows that obscured the bad liquidity picture are gone, and now Bitcoin has to face reality.
The same thing happened with MicroStrategy. When their stock trades at a premium to their Bitcoin (mNAV), they issue shares to buy more coins. That premium has evaporated. The buying pressure is gone.
Politicians Must Print or Die
It is time for Trump and Bessent to put up or shut up. They can either print money and save the asset holders, or let credit contract and cause a recession.
Politicians always face a Hobson’s choice. If they let credit contract, rich asset holders get destroyed, businesses close, and unemployment spikes. That loses elections. If they print money, they save the system but cause inflation.
They will choose inflation. They always do. But first, the market has to force their hand.
Remember 2022? Biden and Yellen told Powell to crush inflation. But when things got too tight, Yellen drained the Reverse Repo Program to pump $2.5 trillion into the system. She saved the stock market to help the Democrats. Buffalo Bill Bessent will have to do the same thing for the Republicans. He is a master plumber of the financial markets. He will find a way.
The Setup: 2023 vs. 2025
The current setup looks exactly like the second half of 2023. We had a debt ceiling fight, followed by the Treasury refilling its General Account (TGA). That sucks liquidity out of the system.
2023 Liquidity Drain:
2025 Liquidity Drain:
Before we get back to "Up Only," the markets must drop. They need to drop hard enough to scare the politicians into firing up the money printer again.
The Price Prediction
The Bitcoin dive from $125,000 to the low $90,000s tells me a credit event is brewing. Stocks are still near highs, but Bitcoin smells the danger.
Here is my forecast:
The Drop: Bitcoin could absolutely drop to $80,000 to $85,000 during this period of weakness. The market needs to puke.
The Reaction: A 10 to 20 percent correction in stocks will force the Fed and Treasury to panic. They will accelerate money printing.
The Rocket: Once the liquidity tap turns back on, Bitcoin will zoom towards $200,000 or $250,000 by year-end.
The Alpha: Zcash and The Dragon
I raised my stablecoin position over the weekend. I am ready to buy the blood. But there is one specific play I am looking at: Zcash ($ZEC).
With AI and big government surveillance, privacy is dead. It is offensive that the top cryptos are centralized coins or memes. Zcash is the only real defense we have. It belongs right below Ethereum. The market is waking up to the privacy narrative.
Also, keep an eye on China. The PBOC just purchased government bonds for the first time since January. This is the beginning of Chinese QE. President Xi wants a strong Yuan, but he will be forced to print once the U.S. accelerates. The dragon will awaken and pour Maotai on the fire of the 2026 bull market.
I am still long as fuck for the cycle. But I take my losses with pride in the short term so I have the cash to buy the bottom. The storm is coming. Get your skis ready.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.