Summary This week has been extremely volatile, with major indices down significantly, yet Bitcoin shows resilience, only down around 5% after a 14% drop. Bitcoin's monthly chart suggests a potential higher low at the 50% retracement level, with $79,400 being a critical level to watch. Despite bullish catalysts like the ETF and Crypto Summit, Bitcoin's short-term movement is heavily influenced by the macro environment and equity markets. A bounce in indices could trigger a Bitcoin rally; the NFP data and Crypto Summit will be key drivers for market sentiment. Summary If I had to describe this week in the markets, I’d call it a wild one—and even that would be an understatement. The Nasdaq ( NDAQ ) is down roughly 5% on the week, the S&P 500 ( SPY ) is down around 4%, and the Dow ( DIA ) is down about 3%—and we haven’t even had the NFP data release yet! Despite all this volatility, Bitcoin ( BTC-USD ) is only down around 8% as of writing. However, it dropped as much as 14% before recovering. Following the market’s close, President Trump signed the executive order for the Bitcoin Reserve, but the market did not like that it mentioned only holding the seized funds without any new buying and no talks about how it will be funded. Let’s break down some Bitcoin charts and discuss why I think this asset could be a cautious buy—while keeping the macro view in mind as we head into the Crypto Summit this Friday. Monthly Chart When we take a look at the Monthly chart, price has clearly formed a local top at 109,000 and sense we have seen a retracement back down into the trading range towards the 50% retracement level from the previous swing low back in August. TradingView (BTC) What I’m currently watching on the monthly chart is whether this will form a higher low ( HL ) at the 50% retracement level of the trading range, potentially setting up a move back toward all-time highs (ATHs). A crucial level to watch is the $79,400 range—if we see a break there, I’d expect a quick sell-off toward the previous ATHs in the low $70Ks. The challenge, however, is the environment Bitcoin is trading in. The macro backdrop—tariffs, inflation, and a slowing economy—isn’t exactly favorable for Bitcoin to push higher, especially since it currently trades in correlation with the stock market. Looking back at late 2021 to 2022, Bitcoin began its move lower before the stock market took a hit from the inflation crisis. The issue now is that we don’t have a solid data set to determine how Bitcoin will behave if the economy continues to slow. Given how Gold has been moving, I’d argue we’re already in that environment. Currently, Bitcoin tends to follow equities, and there is significant data to support this trend. So if equities continue the sell-off we’ve seen over the past month, I’d expect crypto to follow—just as it has been. What would be interesting—just a thought—is that, much like in 600 BCE, when the Lydians were the first to mint gold and silver coins, setting the foundation for gold as a store of value, we could be seeing a similar early-stage development with the Crypto Reserve in the U.S . In my opinion, there should only be a Bitcoin Reserve rather than including any others. Something to think about… Weekly Chart When we zoom into the weekly chart, we can start to see more detail, but that can also come with more noise, so keep that in mind. TradingView (BTC) The first chart I’ve annotated shows the 2021-2022 run and peak. I’ve marked the low of this trading range from the COVID low and the local top at 64,900 . We can notice something similar to what we’re seeing now: Massive run-up → Retrace into 50% of the trading range The question now is whether we find true support here and start to form a bullish structure on the lower time frames, like the Daily, to align with the higher time frames (HTF). This is called timeframe alignment , which could give us a push higher back toward the highs. TradingView (BTC) When we look at the current data, it’s pretty similar in terms of the run-up and the creation of the local top, as we’ve seen a retrace toward the 50% level. When it comes to understanding bull markets, which Bitcoin has been in for the last 2.5 years, the market will create swing lows and swing highs, where the highs are taken out, and the lows tend to be “protected.” This is what we should see if Bitcoin is going to continue its run back up toward $100,000 . But again, a major issue that could cause this move to take a while—or may prevent it from happening at all in the next few months—could be the macro view and how the equities market has been trading the last few weeks. Bitcoin does have the catalysts to make a move, including the ETF, the Crypto Reserve, the ongoing global adoption, and the upcoming Crypto Summit. However, in the short term, as I’ve mentioned to more clients, these types of developments can easily just be noise if the macro environment continues to be bearish. An example of this is what we saw after Trump talked about the Crypto Reserve on Sunday. Daily Chart Posted below is the daily chart, and I’ve marked a few key things here. The first is the daily range that Bitcoin was in for about 90 days before breaking below, as equities sold off. TradingView (BTC) This run lower is the move that traded down to the 50% level of the HTF trading range, and we saw a very nice reaction at that level. Then, this past Sunday, when Trump mentioned the Crypto Reserve, we saw a short-term move back inside the range. However, the very next day, we saw a rejection back below as equities sold off that Monday morning. The key level to watch here is around 91k-92k for a key daily close above that range. If we can reclaim that range without any major news releases and more of a natural move, I think that would bring a nice bullish sentiment to the market. Bitcoin has the catalysts to make a move and get a push back up toward the range highs. The Risks Below, I am attaching the Index Triad chart, which includes all three major indices. In my view, this is the major issue that is keeping Bitcoin from seeing a nice rally back up toward the highs. TradingView (Index Triad) On all three indices, we’ve seen all the gains from the Trump Rally after the election erased, and they are currently at those lows. Tech is also showing as the weaker market right now, which makes sense. The scenario I would want to see before this week ends, as we head into NFP data tomorrow, is a weekly close back above the range lows on the S&P 500 and NQ , trading back above the November low. I think if we see a rally before the end-of-week close in the broader markets, it will allow Bitcoin to have some room to potentially make a nice run, as it has the catalysts, and the technicals look solid as well. Conclusion Altogether, I remain more on the bullish side of this market, but I’m also aware that the current macro view and fundamentals are pretty weak, which puts major pressure on risk-on markets. My main thesis here is that if we see a bounce in the indices, I believe Bitcoin will have a nice run, and altcoins could see a short-term bounce. NFP data will be pretty important here, as it will set the overall sentiment in the markets on whether we see that bounce or not. The Crypto Summit, which begins at 6:30 PM EST on Friday, will bring some volatility to the market depending on what is said. So, if the NFP report isn’t a disaster, I believe that heading into this event with the already decent-looking technicals and catalysts, we could see a potential nice rally.
