Bitcoin Bulls vs Bears
RLT Newsletter 4.23.26
Today marked day four of consolidation on SPY. After one of the most blisteringly bullish runs in history, the market needed a pause, and that’s exactly what we’re getting. That said, not everything is cooling off. Thursday was another strong day for semiconductors and AI hardware names, while software continued to show weakness after NOW lowered guidance and sold off, dragging much of the group with it. Once again, this market is clearly rewarding strength and punishing weakness.
A quick look at the SPY chart shows that even the smallest pullbacks are getting bought aggressively. That’s a direct result of the vertical “lockout” move we just saw. It left a lot of participants behind, from hedge funds to retail, all feeling the same thing: FOMO. Because of that, dip buyers aren’t waiting for perfect entries. They’re stepping in quickly, and chasing is still being rewarded.
For that reason, I think pullbacks remain shallow in the near term. That said, we likely continue to follow the 1999 and 2014 analogs to some extent, where price eventually does retrace back toward the 100-day SMA and the $686 gap, possibly even a bit lower. The main wildcard in the immediate future is earnings season. The market seems to have largely shrugged off the Iran war and any other concerns for now, so the next real catalyst will likely come from earnings and forward guidance. Inflation or macro shocks could still matter, but those are more likely to become factors later in the summer. Let our futures selves deal with that mess.
If the market can get through earnings without breaking key levels, and big tech continues to hold up and push higher, the bullish thesis targeting the upper trendline near $730 remains intact.
That said, from a broad market perspective, the risk/reward setup isn’t particularly attractive right now. Even assuming upside toward $730 or $740 to be generous, we’re only looking at roughly 4 to 5 percent from current levels. Meanwhile, the 100-day SMA sits about 4 percent lower. That creates a fairly neutral, and not especially favorable, setup at the index level.
For that reason, I’m remaining highly selective with new entries and focusing on setups that offer significantly better asymmetry than the broader market. It’s also worth noting that during the October 1999 melt-up, QQQ significantly outperformed SPY. I’ll continue watching tech, particularly semiconductors and AI hardware, for opportunities to buy controlled pullbacks as this trend develops.
SPY Daily Chart
Bitcoin: Five Months After I Became a “Bitcoin Bear”
It’s now been roughly five months since I published “Have I Become a Bitcoin Bear?,” where I laid out the bearish case and detailed exactly where I planned to take profits and exit. That thesis played out almost perfectly. I exited around $100,000, when we broke the 120-SMA on a 3-day chart, and began scaling back in between $69,000 and $64,000, actively trading the range.
While I don’t claim to know whether BTC has already bottomed, I will clearly lay out the two most probable paths forward, what I’m watching closely, and how I plan to react.
The Case for One More Leg Lower
There remains a compelling argument that we see one final leg lower before a true cycle bottom forms. So far, this cycle has followed a fairly classic Bitcoin bull and bear market structure. We topped when history suggested we would, saw a sharp initial decline, followed by a choppy, messy bounce, then another sharp drop. Now we are once again in a choppy, messy bounce.
The current move still looks more like a bear flag than the start of a new impulsive bull leg higher. Even a 40 to 45 percent rally off the lows, pushing into the $85,000 area and the 200-day SMA, would be very typical of a bear market bounce before another leg lower. We saw this exact pattern play out multiple times in the previous cycle. If history continues to rhyme, a bottom would likely form sometime between July and October of this year, leaving plenty of time for another move down.
Key levels have also not been fully tested. Price has not cleanly tagged the 200-week SMA, though it came close, nor has it reached realized price, currently sitting near $54,400, a level that has historically been visited in bear markets.
The DXY adds another layer to watch. It has always moved inversely to Bitcoin, and it currently appears to be attempting a base after nearly a year of consolidation. A breakout higher in the dollar could tighten global liquidity and apply additional pressure on risk assets, especially BTC.
DXY Daily Chart
From a magnitude perspective, Bitcoin has only declined about 50 percent so far in this correction. Even adjusting for lower volatility over time, that’s not an especially deep drawdown by historical standards. In a more complex corrective structure, similar to 2022, we should still see a final leg down into the $55,000 to $48,000 zone. That area would offer far more attractive long-term risk to reward for accumulation.
If we do get that final low, I’ll be looking for classic bottoming signals such as bullish divergence on the RSI or a push toward the 27 level on the daily RSI. Either would prompt me to begin adding more aggressively for the long term.
BTCUSD Bear Count
The Case That the Low Is Already In
There are also credible signals suggesting the bottom may already be behind us.
Price successfully held the long-term channel that has guided Bitcoin since 2017, which is a major structural level. We also came within striking distance of the 200-week SMA. On the momentum side, weekly RSI reached 30, a level that has historically marked or closely aligned with bear market lows.
There’s also a structural wildcard this cycle. Large, consistent corporate buyers like Michael Saylor may have altered the demand dynamics. Some estimates suggest that without this steady buying, Bitcoin could have already traded significantly lower and tested more traditional bear market levels.
At the same time, equities continue pushing higher. A full decoupling, where Bitcoin drops another 20 to 25 percent while stocks rally, would be unusual, though not impossible. Also broader risk-off move later this year could still pull both lower together.
If the low is indeed in, this would likely represent the fifth and final wave of the bull market that began in 2023. It would likely resemble the July to November 2021 move, a 50 percent plus correction, a sharp recovery to new highs, and a relatively swift top shortly thereafter. That would create a classic max pain scenario for both bears waiting for lower prices and bulls expecting a massive breakout.
BTC Bull Count
What I’m Watching Closely
The critical question right now is whether the current structure resolves as a bear flag or a leading diagonal.
If it’s a leading diagonal, I would expect a couple pushes higher followed by a pullback toward the $68,000 region for a second wave, followed by a strong impulsive breakout higher. I’d want to see the $68,000 point of control hold along with the main channel trend line, before turning more aggressively bullish. Ideally, this would coincide with a weakening DXY and continued strength in equities.
If we instead see rejection on this current push higher, followed by a sharp move lower that breaks the point of control and the primary trendline, then the lower-low scenario is likely in play, and I’ll be looking to buy at much better prices.
Unfortunately, the longer-term bull/bear line, the 3-day 120 SMA, is still sitting up near $95,000 and isn’t very useful at current levels. For now, I’m using the 100-day and 200-day SMAs as my primary swing trading support and target zones.
I’ve been on the right side of nearly all major Bitcoin moves since 2023, including calling the exit way ahead of the recent selloff. I’m currently in the “one more low” camp so if we don’t get that lower low, that streak ends, and that’s fine. The goal isn’t perfection, it’s making money, and that can be done in either scenario with disciplined execution.
Right now, the focus is staying flexible and continuing to swing trade these moves until a clearer path develops. I’ll let price action lead and adjust accordingly.