This was an important week across several major asset classes. Inflation data came in below expectations, geopolitical tensions pushed oil prices sharply higher, Bitcoin continued to defend a critical long-term technical level, and the technology sector experienced a meaningful correction led by semiconductors and AI-related companies.

Bitcoin is currently trading near $64,000. From a higher-time-frame perspective, Bitcoin is attempting to secure another weekly close above the 200-week moving average. A successful close would represent the third consecutive weekly close above this important level following the temporary breakdown toward approximately $57,800.

Maintaining the 200-week moving average would support the possibility of additional short-term upside. However, it does not change my broader macro framework.

I continue to believe that Bitcoin remains in Stage 5, the true capitulation phase of the cycle. In my view, the decline toward $57,000 to $58,000 was not the final macro bottom. I still expect Bitcoin to trade at lower prices in the coming months before completing the broader bottoming process.

I still do not believe we have seen the true macro bottom in Bitcoin. While a significant portion of the correction is likely behind us, I continue to expect one final capitulation event before the market establishes a durable long-term low. In my view, there is still one maximum fear event ahead, the kind of move that forces weak hands out of the market and creates the emotional environment that has historically accompanied major cycle bottoms.

That said, I also believe this bear market is unlikely to resemble previous cycles in terms of magnitude. Historically, Bitcoin has experienced drawdowns of roughly 70% to 90% from bull market highs to bear market lows. My expectation is that this cycle will ultimately produce a shallower decline.

The primary reason is the macroeconomic backdrop. During the previous bear market, central banks around the world were aggressively withdrawing liquidity and raising interest rates to combat the inflationary surge created by the unprecedented COVID-era fiscal and monetary stimulus. That tightening cycle placed substantial pressure on virtually all risk assets, including Bitcoin.

This cycle is different. Although several central banks have recently adopted a more hawkish tone and additional tightening remains possible, they are unlikely to remove liquidity as aggressively as they did during the previous cycle because the extraordinary inflationary pressures created by the COVID stimulus have largely subsided. While this does not eliminate downside risk, it is one of the key reasons why I expect Bitcoin's eventual bear market decline to be materially smaller than the typical 70% to 80% drawdowns observed in prior cycles, consistent with the broader pattern of declines becoming less severe over time.

From an investment perspective, accumulating below $60,000 is not a bad idea, but I would so cautiously. Rather than attempting to identify the exact bottom, I prefer to gradually build positions as valuations become increasingly attractive while preserving sufficient liquidity in case we experience one final capitulation move. Our objective is not to buy the perfect low, but to accumulate within a high-probability value zone and scale exposure as confirmation continues to build.

One additional development worth highlighting comes from our AI sentiment models. Over the past several weeks, our AI has detected a meaningful shift in market positioning on X. Whereas the consensus previously expected Bitcoin to continue higher, the majority of participants are now increasingly converging on the view that the true macro bottom is still ahead and will most likely occur sometime between September and October. Ironically, when a particular market narrative becomes too widely accepted, it often increases the probability that the market behaves differently. If enough participants expect the same bottoming window, institutional capital may begin positioning earlier, effectively front-running the move and causing the low to occur sooner than consensus anticipates. This is precisely why investment frameworks must remain adaptive. A price target or timeline established a year ago should never be followed blindly simply because it was the original thesis. Markets evolve, sentiment changes, and our strategy must evolve alongside them. As I have discussed extensively in previous market updates, this is one of the reasons I have repeatedly cautioned that the final bottom could ultimately be front-run into August. Our objective is not to defend a prediction, but to follow the evidence wherever it leads.

I also want to emphasize an important point. I can be wrong. I have been wrong before, and I will be wrong again. I am human, and no investor, analyst, or institution can predict markets with perfect accuracy. That is precisely why having a robust investment framework, disciplined risk management, and a well-defined strategy matters far more than trying to forecast every market move correctly. If your portfolio is constructed properly, your entries are scaled, and your risk is managed appropriately, you do not need to call every top or bottom perfectly to achieve excellent long-term results. Successful investing is not about being right every time, it is about consistently making sound decisions over time.

Regarding altcoins, we are not actively accumulating positions at this stage. However, we have already identified several projects on our watchlist that we intend to accumulate once our macro framework signals that the broader bottoming process is complete. Our goal is to position early in fundamentally strong projects that we believe have the potential to deliver asymmetric returns during the next bull market.

On the lower time frames, Bitcoin has encountered resistance near $65,000, which was expected and discussed extensively with our members.

Even if Bitcoin continues toward $70,000, $72,000, or potentially $74,000, the path is unlikely to be a straight-line move higher. There are several significant resistance areas between the current price and those higher targets.

The first area we are monitoring is between approximately $65,000 and $68,000. There is also additional liquidity above the market that could remain attractive to larger participants and market makers.

This means Bitcoin may still attempt to move higher and capture that liquidity. However, the presence of upside liquidity should not be confused with confirmation that a new bull-market expansion has begun.

For now, the tactical position remains constructive, while the higher-time-frame outlook remains cautious.

The long opportunity identified by the Sonderberg System has performed strongly.

The position reached approximately 11% in unrealized profit and is currently holding approximately 9.5% in profit, calculated without leverage.

This is an important example of how the system separates short-term tactical opportunities from the broader macro outlook. We can participate in a countertrend move when the institutional signals align without assuming that the long-term correction has already ended.

That distinction remains critical.

A profitable tactical long does not automatically confirm a macro bottom, just as a short-term rejection does not invalidate the possibility of another move higher.

The Nasdaq Composite declined approximately 2,9% for the week, while the Philadelphia Semiconductor Index entered correction territory and finished roughly 20% below its June peak.

Selling pressure affected many of the companies most closely associated with the AI infrastructure trade, including Nvidia, AMD, Broadcom, Arm, Intel, Marvell, Micron, and Applied Materials.

The decline was intensified by the introduction of Kimi K3, a new open-weight artificial-intelligence model developed by Chinese startup Moonshot AI.

Kimi K3 has demonstrated competitive performance against leading American models across several coding and agentic benchmarks. Its release renewed concerns that increasingly capable and cost-efficient Chinese models could challenge Western AI platforms while potentially reducing the amount of expensive computing infrastructure required to achieve competitive results.

The market’s reaction does not necessarily mean that demand for AI infrastructure will disappear. However, it has forced investors to reconsider the extremely aggressive growth and spending assumptions already embedded in many semiconductor valuations.

When companies are priced for near-perfect execution, even a modest change in expectations can produce a significant correction.

Earnings season has reinforced the same lesson.

The banking sector was generally resilient, supported by strong trading and investment-banking revenue. JPMorgan Chase, Bank of America, and Goldman Sachs reacted positively to their results, although performance across the broader financial sector was mixed.

Technology companies, by comparison, continue to face extremely elevated expectations.

Netflix shares sold off sharply after the company issued weaker-than-expected forward guidance and announced that it would reduce the frequency of its viewership reporting. The reaction demonstrated how quickly investors can punish companies when growth, margins, or forward guidance fail to justify premium valuations.

This is precisely the type of valuation risk we have discussed over the past several weeks.

The AI and technology sectors had become increasingly crowded, expectations were extremely high, and many companies were priced for uninterrupted growth. This week’s correction should therefore not come as a surprise.

The week began with encouraging inflation data.

Headline Consumer Price Index inflation declined to 3.5% year over year, below the consensus expectation of approximately 3.8%. Core CPI, which excludes food and energy, declined to 2.6%, also below the expected 2.8%. Bitcoin initially reacted positively to the report, gaining approximately 2% following Tuesday’s release.

This was a meaningful improvement from May, when headline inflation stood at 4.2% and core inflation was 2.9%.

Producer inflation also came in below expectations on Wednesday.

Headline PPI inflation declined to 5.5% year over year, compared with expectations of 6.2%, while core PPI declined to 4.7%, below the expected 5.2%. On a month-over-month basis, headline producer prices fell by 0.3%, representing the largest monthly decline since April 2025.

Taken together, the CPI and PPI reports suggest that inflationary pressure moderated during June. However, one month of better data does not necessarily establish a lasting trend, particularly as energy prices are once again moving sharply higher.

Despite the softer inflation reports, interest-rate expectations did not change dramatically.

The next Federal Open Market Committee meeting will take place on July 28 and 29, with the rate decision and press conference scheduled for July 29. Interest-rate markets continue to price a meaningful probability of at least one 25-basis-point increase later this year, although those probabilities remain highly sensitive to incoming inflation, employment, and energy-market data.

The important distinction is that inflation data improved this week, but it has not yet removed the risk of additional monetary tightening.

The Federal Reserve must now weigh softer underlying inflation against renewed energy-price pressure, resilient economic activity, and the possibility that higher oil prices eventually feed back into transportation, production, and consumer costs.

Geopolitical risk remains one of the most important variables for the market.

The conflict between the United States and Iran continued to escalate this week, increasing concerns about energy infrastructure, shipping routes, and the security of the Strait of Hormuz.

Oil prices reacted accordingly. West Texas Intermediate crude finished the week above $82 per barrel, while Brent crude moved above $88. Both benchmarks gained approximately 16% during the week as traders priced in a larger geopolitical and supply-disruption premium.

This creates a potentially difficult environment for the Federal Reserve.

The CPI and PPI reports showed that inflation moderated during June. However, if oil remains elevated or continues moving higher, energy costs could begin placing upward pressure on headline inflation again. Higher fuel and transportation costs can also work their way through supply chains, affecting production expenses and ultimately consumer prices.

In other words, the market received positive inflation data this week, but the oil market is already introducing a new inflationary risk.

The economic calendar will be relatively light next week, which means corporate earnings are likely to become the market’s primary focus.

Some of the most important companies scheduled to report include:

Alphabet, Tesla, AT&T, Intel, American Express, IBM, General Motors, and several additional large-cap companies.

Alphabet and Tesla will be particularly important because their results may influence sentiment across artificial intelligence, digital advertising, electric vehicles, and the broader technology sector. Intel’s report will also be closely watched following the recent volatility across semiconductor stocks.

The central message from this week is that several conflicting forces are now affecting the market simultaneously.

Inflation data improved, but rising oil prices are creating a renewed inflationary threat.

Bitcoin continues to defend an important long-term moving average, but the broader capitulation structure has not yet been completed. At the same time, our AI sentiment models indicate that the majority of market participants now expect the final bottom to occur later this year, increasing the possibility that the market front-runs that consensus before it fully materializes.

The Sonderberg System’s tactical Bitcoin long remains profitable, but that position should not be interpreted as confirmation of the final macro bottom.

AI and semiconductor stocks are undergoing a meaningful valuation reset, while other areas of the market, including financials and energy, have demonstrated greater relative strength.

This remains an environment in which patience, disciplined risk management, and the ability to separate short-term opportunities from the higher-time-frame trend are essential.

Economic: no reports
Earnings: AGNC Investment Corp. (AGNC), Crown Holdings Inc. (CCK), Dominos Pizza Inc. (DPZ), Ryanair Holdings PLC (RYAAY), Steel Dynamics Inc. (STLD), W.R. Berkley Corp. (WRB), Zions Bancorporation (ZION)

Economic: no reports
Earnings: Capital One Financial Corp. (COF), Chubb Limited (CB), Danaher Corp. (DHR), D.R. Horton Inc. (DHI), EQT Corp. (EQT), General Motors Co. (GM), Halliburton Co. (HAL), Interactive Brokers Group (IBKR), KeyCorp Inc. (KEY), Marsh and McLennan Companies Inc. (MMC), 3M Co. (MMM), Northrop Grumman Corp. (NOC), Novartis AG (NVS)

Economic: EIA Crude Oil Inventories, MBA Mortgage Applications Index
Earnings: Alphabet Inc. (GOOGL), AT and T Inc. (T), CME Group Inc. (CME), CSX Corp. (CSX), Equinor ASA (EQNR), GE Vernova Inc. (GEV), Moodys Corp. (MCO), Philip Morris International Inc. (PM), ServiceNow Inc. (NOW), Tesla Inc. (TSLA), Texas Instruments Inc. (TXN), United Rentals Inc. (URI), Waste Connections Inc. (WCN)

Economic: Continuing Claims, EIA Natural Gas Inventories, Initial Claims
Earnings: Blackstone Inc. (BX), Comcast Corp. (CMCSA), Comfort Systems Inc. (FIX), Digital Realty Trust Inc. (DLR), Edwards Lifesciences Corp. (EW), Freeport McMoRan Inc. (FCX), Hartford Insurance Group Inc. (HIG), Honeywell International Inc. (HON), Intel Corp. (INTC), Lockheed Martin Corp. (LMT), Newmont Corporation (NEM), Norfolk Southern Corp. (NSC), RTX Corp. (RTX), SAP SE (SAP), T-Mobile US Inc. (TMUS), Union Pacific Corp. (UNP)

Economic: New Home Sales
Earnings: American Express Co. (AXP), Booz Allen Hamilton Holding Corp. (BAH), Canadian National Railway Co. (CNI), Charter Communications Inc. (CHTR), Nextera Energy Inc. (NEE), SLB NV (SLB), Tenet Healthcare Corp. (THC), Verizon Communications Inc. (VZ)

Everything you just read is what we do every single day at Sonderberg Research. The difference is timing and depth.

By the time analysis like this reaches a newsletter, the move has often already started. My private clients don't wait. They get:

If you're managing $100K+ and you're done reacting emotionally to a market that punishes hesitation, let's talk.

On a private Strategy Call, we'll map exactly where you are in this cycle, the 3 institutional signals that flag the top before retail sees it, and where your portfolio is currently exposed.

No pitch. Just a clear, unemotional plan for your capital.

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Kind regards,
Diego Sonderberg

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