Shiny Rocks & Internet Money
RLT Newsletter
SPY hit its head once again on the exact resistance I outlined yesterday, and the selling continued throughout the day. Most of the selling came from tech and energy, and we did see some green shoots in the market as consumer cyclical names performed fairly well, including Home Depot and Booking.com. I suppose everyone is going on vacation because they are sick of trading a market that doesn’t go straight up every day, which is fair. Things were a lot easier when the market only moved in one direction.
However, we can still find great levels to base trades off of, keep our losses small when they happen, and find edge in any market. MU is gapping higher which may be saving the bulls for now. Watch tomorrow’s price action closely to see if that bullish gap can hold. If it does, there is still resistance overhead that it will need to work through, but it would be a good first step toward a recovery and could delay the larger drop that I am still watching/hoping for.
SPY Daily Chart
Today I want to review two charts: Bitcoin and Gold. Let me say something plainly before I get into the analysis. I am a Bitcoin bull. I’ve put thousands of hours into understanding this asset and its chart, made seven figures trading it, and have been on top of its twists and turns as well as any analyst out there. This is not a bear doom and gloom piece. What follows is an honest reading of price action and history.
Key discipline: When price action and history conflict with a narrative, even one you believe in, price and history win.
When the equity market goes up, Bitcoin goes down. When the equity market goes down, Bitcoin goes down. That has been the price action of 2026 and every Bitcoin bear market ever, and yet the some people still seem surprised when it happens.
If you have been here for awhile you know I sold my Bitcoin in November 2025 when price crossed below the 120 SMA on the 3-day chart. A few weeks later I was at a party where a Bitcoin bull was walking through every standard talking point. I already knew every one of them, because I’ve made them myself. But I wasn’t about to HODL a position based on a narrative that price was actively contradicting.
The Saylor Variable
At that same party, I flagged Michael Saylor and Strategy as the largest risk to Bitcoin’s price. My reasoning was simple: borrowing aggressively at scale to buy a volatile asset works until it doesn’t, and when it stops working, the unwind tends to be disorderly.
Seven months later: STRC is in freefall, Saylor has sold Bitcoin (only 32 BTC, but directionally notable), and Strategy is putting U.S. Treasuries on its balance sheet rather than adding to its Bitcoin position. Strategy has stated it has 32 years of dividend coverage through its Bitcoin reserves, but that also implies it may need to sell Bitcoin to service those obligations. The market is pricing in that possibility. STRC, STRF, STRK, and MSTR have all been under sustained pressure.
The October 2025 Bear Case, Revisited
In my October 31, 2025 newsletter, I outlined seven reasons for growing caution on Bitcoin. Eight months later, here is an brief look at where each stands:
What I wrote in October 2025:
“A fully formed Elliott Wave count has pushed into new all-time highs”
Where it stands today:
This signal played out nicely and now we have yet to complete a full corrective wave.
What I wrote in October 2025:
“A 550-day bull market since the halving, right on schedule for cycle exhaustion.”
Where it stands today:
That timing played out once again. Now we are 263 days from the top. Historical bear market bottoms have formed 363 to 406 days after the peak, pointing toward an October or November 2026 bottom.
What I wrote in October 2025:
“A correlation with MSTR that looks eerily similar to the 2021 top.”
Where it stands today:
In 2021, MSTR peaked nearly a year before the Bitcoin market top, then declined 90%. That pattern has been spot on so far and if it continues, MSTR trades near $50 before all is said and done.
What I wrote in October 2025:
“A bull trap at the all-time high, which has historically led to at least a 22% drawdown.”
Where it stands today:
This played out precisely. Bitcoin repeatedly lures traders into breakouts and then reverses. This behavior is consistent with topping structure that leads to bear markets.
What I wrote in October 2025:
“DXY (which has an inverse correlation with BTC) looks like it’s bottoming”
Where it stands today:
This was and still is one of the most important signals on the list for me. Just this past week DXY has broken out from a year-long base and the uptrend appears to be resuming. DXY bottomed in January 2026 and has since broken out above 100, a key level. Every prior BTC bear market bottom has coincided with a DXY peak. Until DXY rolls over, the historical record gives no reason to expect a durable Bitcoin bottom.
DXY Daily Chart
What I wrote in October 2025:
“No meaningful price discovery in 2025, every breakout has been sold.”
Where it stands today:
Every rally was sold and continues to be. In 2026, the pattern has shifted to vertical drops followed by weak, overlapping rallies that fail into resistance, which is textbook bear market behavior. Until we see a capitulation low followed by strong momentum and vertical price action off the bottom, there is no reason to get aggressively bullish.
What I wrote in October 2025:
“BTC is getting dangerously close to its historically perfect Bull vs. Bear line: the 120-SMA on the 3-day chart”
Where it stands today:
Still the cleanest bull/bear dividing line I’ve found. It currently sits near $90,000. Given where price is, it likely won’t serve as a reentry trigger this cycle the way it has in prior cycles, so I’ve shifted my focus to other signals at least on the buy side of things.
BTCUSD 3 Day Chart
Where Does This End? Support Levels and Historical Targets
Bitcoin almost always tests its realized price during a bear market. That level currently sits near $54,000. I expect it gets tested fairly soon, and I would not be surprised to see a move as low as $48,000 if fear accelerates.
That zone represents a reasonable accumulation area for long-term investors. A purchase near $50,000 offers attractive risk/reward if you believe Bitcoin can eventually push toward $250,000 in the next 5 years. At that level, the potential 5:1 reward-to-risk profile starts to become comparable to buying Bitcoin at $10,000 in 2020 or $20,000 in 2022, both of which I did and both of which worked out exceptionally well over the long run.
That said, I think there is a legitimate path to $37,000 to $43,000, and here is the case:
When Bitcoin has broken below its 200-week SMA, it has subsequently fallen an additional 30% in every instance (three occurrences, perfect record). A similar decline would target roughly $43,000.
Every Bitcoin bear market has retraced at least 78.6% of the prior bull market advance on a linear scale. That level currently sits near $39,000.
The 100-month SMA is also near $39,000 and continues to rise, providing a longer-term technical floor in that zone.
The IBIT ETF low near $22 corresponds to approximately $38,000 Bitcoin. A move below that level would put every ETF buyer underwater and could produce the kind of capitulation that historically marks major bottoms. Many major technology IPOs have followed an similar pattern, breaking below their offering price before beginning a sustained advance.
A decline to $38,000 to $39,000 would represent roughly a 69% drawdown from the peak, slightly less severe than the 77% decline of the prior bear market, consistent with the observed trend toward less extreme cycles. Plus its the internets favorite number.
Finally, as long as AI-related equities are generating asymmetric returns, there is less incentive to reach further out on the risk curve into Bitcoin. The demand dynamic may be suppressed for longer than consensus expects.
Entry framework: If Bitcoin trades into the $43,000 to $36,000 zone during the fall time window, particularly if accompanied by a DXY reversal and a genuine capitulation move, I will be quite excited to buy a sizable position once again.
BTC Daily Chart
Gold: Rock Bottom or Still Mining Lower?
Gold and Silver both experienced parabolic moves earlier this year, and anyone who studies charts and these markets knew deep corrections were the likely aftermath. That correction has been underway for months. The question now is whether it is approaching its conclusion or just getting ready for another lower high push.
Markets need time to reset sentiment before a new sustained advance can begin. The excitement has to fade. Traders have to become discouraged and stop watching. I think that process likely completes somewhere in the $3,400 to $3,600 zone, a range that represents both major chart support and the location of the 100-week SMA.
The most probable path, in my view:
Gold undercuts support near $3,888, producing a short-term bounce that generates a decent swing trade for those paying attention and trading quick swings.
Price then makes one final move lower toward the prior all-time high area, roughly $3,500, completing a clean corrective structure.
That would set up an attractive risk/reward for the next leg higher, particularly if Gold is in the early stages of a larger fifth-wave advance.
From the $3,400 to $3,600 zone, Gold would have approximately 60% upside to new all-time highs. That is meaningful return potential with a well-defined risk level beneath it, the kind of setup that rarely stays available for long.
Gold Daily Chart
Digital Internet Money & Shiny Rocks
Gold and Bitcoin share many properties while being extremely different in others. But one thing they have in common is very solid and very tradable charts, unaffected by earnings or profits and driven purely by supply, demand, and sentiment. That makes candlestick and technical analysis work exceptionally well in both. What I look for is the same in each: a clearly defined level where the risk/reward is asymmetric, a historical framework that supports the thesis, and the patience to wait for price to come to me rather than chasing a narrative.
Right now, neither is a screaming buy. But both are getting closer to levels where they will be. When that moment arrives, the preparation done today is what makes it possible to act decisively.
If you want my complete Bitcoin trading plan, including exactly how I identify tops, bottoms, entries, and exits, as well as a full breakdown of how I analyze and trade the markets, check out my 10-Week Swing Trading & Position Trading Master Class starting August 5th. Click below for more details.
