Bitcoin attempted a relief rally this week but failed at major resistance, reinforcing the broader bear market structure that continues to point toward significantly lower levels.

Bitcoin

Bitcoin saw a strong surge this week but failed to produce a sustained break above the key resistance zone between $70,000 and $72,000. The move higher was rejected and price remains within the broader bearish structure that has defined the market since the cycle top. From a macro perspective nothing has changed. The structure continues to point lower and the cycle bottom is still far away.

We are currently in a mid term year, which historically tends to bring deeper corrections across risk assets. For Bitcoin this suggests that lower levels are still likely ahead. My expectation remains that the market will eventually move into a bottoming zone between roughly $45,000 and $25,000 before the next major cycle begins.

S&P 500

Part of the weakness in crypto markets is directly tied to the behavior of traditional equities. We have been closely monitoring the S&P 500 and I previously pointed out the developing 5D bearish divergence. Since that signal appeared the index has begun to show increasing weakness.

Given the historical tendencies of mid term years, I continue to expect a correction of around 10% to 15% over the coming months. Some of that weakness may already be unfolding, something I warned about earlier this year. A move toward the $6,500 area and potentially even $6,200 on the S&P 500 would not be surprising within the next few months.

US Dollar Index

The US Dollar Index has been attempting to break above the 100 level for several months. At the beginning of February it formed a 2 week bullish divergence, reinforcing my view that the Dollar is likely to strengthen. Geopolitical developments such as the Iran conflict combined with the typical mid term year dynamics could support a move above 100, which would create further pressure on risk assets like Bitcoin.

It is important to remember that the regime shift we are seeing today did not start recently. I warned about this change in monetary conditions back in July and August and recommended taking profits. By the end of September the signals were extremely clear and I opened short positions around $120,000 while exiting my crypto holdings at the top. Many market participants are now surprised and looking for external explanations, but the shift began months earlier. Smart money always moves long before retail. Watching indicators such as the DXY, VIX and broader macro indexes provides a major edge because it allows us to analyze markets in the same framework used by institutions.

Economic Data, Rates & Fed

This week’s economic data painted a mixed picture, highlighted by a surprisingly weak jobs report. U.S. employers cut 92,000 jobs in February, one of the largest monthly declines since the pandemic, and prior months were revised lower by a combined 69,000. The unemployment rate rose to 4.4% while wage growth came in slightly stronger at 0.4% month over month. Retail sales also disappointed, falling 0.2% in January, although the control group reading still increased 0.4%. Manufacturing data softened with PMI readings declining, while services activity remained strong as the ISM Non Manufacturing Index surged to 56.1, its highest level in more than three years. At the same time, the Atlanta Fed revised its Q1 GDP estimate sharply lower to 2.1% from 3.1%, signaling slower growth momentum.

Despite the softer growth signals, Treasury yields rose significantly across the curve, largely driven by rising oil prices and renewed inflation concerns. Two year and ten year yields each climbed roughly 18 basis points during the week while the thirty year yield also moved higher. Markets are still pricing relatively limited rate cuts from the Federal Reserve in 2026. Probabilities imply only a 5% chance of a March cut, April expectations rose slightly to 23%, and June stands near 60%. The current macro backdrop suggests investors expect the Fed to remain cautious, balancing slowing economic activity with persistent inflation risks.

Economic: no reports
Earnings: Annexon Inc. (ANNX), BETA Technologies Inc. (BETA), Caseys General Stores Inc. (CASY), Global Business Travel Group Inc. (GBTG), Hewlett Packard Enterprise Co. (HPE), Korn Ferry (KFY), Vail Resorts Inc. (MTN), Voyager Technologies Inc. (VOYG), ZIM Integrated Shipping Services Ltd. (ZIM)

Economic: Existing Home Sales, NFIB Small Business Optimism
Earnings: AeroVironment Inc. (AVAV), BioNTech SE (BNTX), Franco Nevada Corp. (FNV), JOYY Inc. (JOYY), Kanzhun Ltd. (BZ), Legend Biotech Corp. (LEGN), New Gold Inc. (NGD), NIO Inc. (NIO), Oracle Corp. (ORCL), Uranium Energy Corp. (UEC)

Economic: Consumer Price Index CPI, EIA Crude Oil Inventories, Mortgage Applications Index, Treasury Budget
Earnings: BBB Foods Inc. (TBBB), Campbells Co. (CPB), Descartes Systems Group Inc. (DSGX), Driven Brands Holdings Inc. (DRVN), Guardian Pharmacy Services Inc. (GRDN), OppFi Inc. (OPFI), Netskope Inc. (NTSK), Sprinklr Inc. (CXM), UiPath Inc. (PATH)

Economic: Producer Price Index PPI, Continuing Claims, EIA Natural Gas Inventories, Initial Claims, Factory Orders
Earnings: Adobe Inc. (ADBE), Dicks Sporting Goods Inc. (DKS), Dollar General Corp. (DG), Full Truck Alliance Co. (YMM), Futu Holdings Ltd. (FUTU), Lennar Corp. (LEN), Li Auto Inc. (LI), Ollies Bargain Outlet Holdings Inc. (OLLI), Ulta Beauty Inc. (ULTA), Wheaton Precious Metals Corp. (WPM)

Economic: PCE Prices, GDP Second Estimate, Personal Income, Personal Spending, University of Michigan Consumer Sentiment Preliminary
Earnings: Better Home and Finance Holdings Co. (BETR), Buckle Inc. (BKE), Emerald Holdings Inc. (EEX), RLX Technologies Inc. (RLX), VEON Ltd. (VEON)Dates: h4 bold

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

Kind regards,
Diego Sonderberg

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