Intro [One sentence that frames the week]

The past few weeks have developed very well in line with our framework. Bitcoin wicked below the $60K level, made a lower low, and, in doing so, entered Stage 5 of the bear market.

The first priority now is to understand what this stage represents. Stage 5 is the capitulation phase. This is where panic typically reaches its peak, weak hands are forced out, and the market begins moving into its final bottoming zone.

Over the next 2-5 months, Bitcoin will likely form its cycle bottom within this Stage 5 structure. My broader downside range remains between $45K and $25K, with a more specific target around $37K.

For us, the accumulation zone begins at $45K. This does not mean trying to catch the exact bottom. It means gradually building exposure as the market moves deeper into the final capitulation phase.

Once this stage is complete, Bitcoin will likely transition into a disbelief rally going into next year. Retail participation usually does not return immediately after the bottom. More likely, the broader market only starts paying attention again once Bitcoin approaches its previous all-time high.

Economic Data

This week’s economic data was mainly driven by inflation. CPI came in largely in line with expectations, with headline inflation rising 0.5% in May and annual inflation moving up to 4.2%, the highest level since April 2023. However, core CPI was slightly cooler than expected at 0.2% month over month, suggesting that the hotter headline was not necessarily broad-based. PPI was more mixed: headline producer inflation was hotter than expected, rising 1.1% in May and 6.5% year over year, while core PPI came in below expectations. Overall, the data still shows inflation running well above the Fed’s 2% target, but without a clear enough acceleration in core inflation to force an immediate hawkish repricing.

For markets, the more important development was the move lower in Treasury yields and the cooling of Fed rate-hike expectations. Yields declined across the curve, helped by optimism around U.S.–Iran relations, lower oil prices, and reduced concern around the Strait of Hormuz. Two-year yields fell around 8 basis points, while 10-year yields dropped roughly 5 basis points. As a result, markets pushed back the timeline for a fully priced Fed rate hike, with the first 100% probability now moving from December 2026 to March 2027. In short, inflation remains uncomfortable, but the market is currently treating lower geopolitical risk and softer core data as enough to reduce near-term Fed pressure.

SpaceX IPO

The SpaceX IPO may create a strong short-term move, and $SPCX could certainly keep pumping on its first few days of trading. However, investors need to separate short-term hype from long-term risk. Historically, IPOs have been one of the worst entry points for retail investors, especially when buying after the public listing rather than at the institutional offering price. Decades of IPO data show a consistent pattern: many IPOs underperform the broader market, a large percentage lose money over the following years, and retail often enters after the initial upside has already been captured.

For that reason, this SpaceX IPO should be treated with caution. The setup has many signs of retail FOMO: massive media attention, extreme demand, and a narrative that almost everyone wants exposure to. That does not mean the stock cannot rally, but it does mean the risk-reward becomes dangerous if investors chase blindly. In my view, this has the potential to become another liquidity event where retail provides exit liquidity into a late-cycle market. With broader market risks still elevated and my crash thesis still active, this is not the environment to abandon discipline.

Economic: Construction Spending, ISM Manufacturing Index
Earnings: Credo Technology Group Holding Ltd. (CRDO), Hewlett Packard Enterprise Co. (HPE), Science Applications International Corp. (SAIC), Trip.com Group Ltd. (TCOM)

Economic: no reports
Earnings: Dollar General Corp. (DG), Donaldson Company Inc. (DCI), GitLab Inc. (GTLB), Oddity Tech Ltd. (ODD), Palo Alto Networks Inc. (PANW), Signet Jewelers Ltd. (SIG), Ulta Beauty Inc. (ULTA), Victorias Secret and Co. (VSCO)

Economic: ADP Employment Change, Business Inventories, EIA Crude Oil Inventories, Factory Orders, ISM Non Manufacturing Index, MBA Mortgage Applications Index
Earnings: Broadcom Inc. (AVGO), CrowdStrike Holdings Inc. (CRWD), Descartes Systems Group Inc. (DSGX), Five Below Inc. (FIVE), Macys Inc. (M), Medtronic PLC (MDT), Ollies Bargain Outlet Holdings Inc. (OLLI), PVH Corp. (PVH), Thor Industries Inc. (THO), Veeva Systems Inc. (VEEV)

Economic: Continuing Claims, EIA Natural Gas Inventories, Initial Claims, Productivity Revised, Unit Labor Costs Revised
Earnings: Argan Inc. (AGX), Brown Forman Corp. (BF/B), Caleres Inc. (CAL), Ciena Corp. (CIEN), Cooper Companies Inc. (COO), DocuSign Inc. (DOCU), Lululemon Athletica Inc. (LULU), Planet Labs PBC (PL), Rubrik Inc. (RBRK), Samsara Inc. (IOT), ServiceTitan Inc. (TTAN), Toro Co. (TTC)

Economic: Nonfarm Payrolls, Unemployment Rate, Average Hourly Earnings, Average Workweek, Consumer Credit
Earnings: ABM Industries Inc. (ABM), G-III Apparel Group Ltd. (GIII), Virco Manufacturing Corp. (VIRC)

Want to know what the next phase of this cycle actually looks like, and the 3 signals that flag the top before retail sees it?
Watch the free training and, if you manage 6-7 figures, apply for a 1:1 Strategy Call with me: https://sonderbergresearch.com/video

Kind regards,
Diego Sonderberg

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