The last few weeks before Bitcoin enters into stage 5 of the bear market.

Bitcoin Analysis

Bitcoin remains in Stage 4 of the bear market cycle, a phase I have been outlining since January. This stage is characterized by choppy, range bound price action designed to exhaust participants rather than deliver a clean directional move. Instead of a clear breakdown, the market produces false breakouts and failed recoveries, trapping both longs and shorts. The purpose of this phase is liquidity creation. Market makers push price toward obvious levels, attract positioning, and then reverse it to extract capital. Understanding this dynamic is critical, as this environment tends to be mentally and financially draining for those trading reactively.

My broader view remains unchanged. Bitcoin is still in Stage 4, but gradually approaching Stage 5, the capitulation phase where the real bottoming process begins. Before that, further upside remains possible. Last week I briefed Mastermind members of the high possibility move into the $78,000 to $80,000 region, with additional liquidity sitting around $84,000.

This move has played out going into Friday, Market Makers got their liquidity. Even a more extended move toward $88,000 cannot be ruled out, though it is not the base case. At the same time, significant liquidity exists below current price, particularly around $70,000 and between $53,000 and $57,000, reinforcing the expectation that both sides of the market will be taken out.

From a macro perspective, I continue to expect Bitcoin to eventually move into the $45,000 accumulation zone, with the possibility of deeper downside toward $25,000. Timing wise, Stage 5 is most likely to unfold between May and November, with September to October remaining the base case for a more meaningful bottom. The key takeaway is clear. Short term upside should not be mistaken for a new bull phase. The current environment remains a classic late stage bear market structure designed to exhaust participants before the final capitulation.

Economic Data, Rates & the Fed

Last week’s economic data delivered mixed signals, with inflation coming in softer on a monthly basis but still elevated on an annual level. The March PPI rose 0.5% month over month, well below expectations, while core PPI increased only 0.1%, also below forecasts. However, on a year over year basis, headline PPI accelerated to 4.0%, the highest level in 3 years, and core PPI reached 3.8%. At the same time, industrial production declined 0.5% and capacity utilization fell, pointing to weakening activity in the manufacturing sector. Small business optimism dropped to an 11 month low as uncertainty and rising energy costs weighed on sentiment. On the positive side, labor market data remained relatively stable, with jobless claims falling to 207000. The Atlanta Fed’s Q1 GDP estimate held at 1.3%, indicating slower but still positive growth.

Treasury yields moved lower across the curve, largely following the decline in oil prices, with the 2 year yield down around 10 basis points and longer term yields also easing. The yield curve steepened slightly as short term rates declined more than long term rates. Market expectations shifted toward a more dovish outlook, with probabilities for rate cuts rising significantly throughout the year. Expectations for a July cut increased to 19.5%, September to 36.5%, October to 48.5%, and December to 66%. This shift reflects growing confidence that inflation may ease enough to allow the Federal Reserve to begin cutting rates later this year, although the macro backdrop remains uncertain.

Economic: no reports
Earnings: AGNC Investment Corp. (AGNC), Alaska Air Group Inc. (ALK), Bank of Hawaii Corp. (BOH), Cleveland-Cliffs Inc. (CLF), Dynex Capital Inc. (DX), Steel Dynamics Inc. (STLD), Zions Bancorporation NA (ZION)

Economic: Business Inventories, Pending Home Sales, Retail Sales
Earnings: Capital One Financial Corp. (COF), Chubb Ltd. (CB), Danaher Corp. (DHR), D.R. Horton Inc. (DHI), EQT Corp. (EQT), Halliburton Co. (HAL), Interactive Brokers Group Inc. (IBKR), Intuitive Surgical Inc. (ISRG), 3M Co. (MMM), MSCI Inc. (MSCI), Northrop Grumman Corp. (NOC), RTX Corp. (RTX)

Economic: EIA Crude Oil Inventories, MBA Mortgage Applications Index
Earnings: AT and T Inc. (T), Boeing Co. (BA), Boston Scientific Corp. (BSX), CME Group Inc. (CME), CSX Corp. (CSX), GE Vernova Inc. (GEV), International Business Machines Corp. (IBM), Lam Research Corp. (LRCX), Philip Morris International Inc. (PM), ServiceNow Inc. (NOW), Tesla Inc. (TSLA), Vertiv Holdings Co. (VRT)

Economic: Continuing Claims, EIA Natural Gas Inventories, Initial Claims, S and P Global U.S. Manufacturing PMI, S and P Global U.S. Services PMI
Earnings: American Express Co. (AXP), Blackstone Inc. (BX), Digital Realty Trust Inc. (DLR), Freeport McMoRan Inc. (FCX), Gilead Sciences Inc. (GILD), Honeywell International Inc. (HON), Intel Corp. (INTC), Lockheed Martin Corp. (LMT), Newmont Corp. (NEM), Nextera Energy Inc. (NEE), SAP SE (SAP), Union Pacific Corp. (UNP)

Economic: University of Michigan Consumer Sentiment Final
Earnings: Charter Communications Inc. (CHTR), HCA Healthcare Inc. (HCA), Norfolk Southern Corp. (NSC), Procter and Gamble Co. (PG), SLB NV (SLB)

If you manage a 6-figures or more portfolio, missed the top and want clarity with a structured timing system, make sure to watch my free training: https://sonderbergresearch.com/video

Kind regards,
Diego Sonderberg

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