The finale phase before the Bitcoin bottom.

Bitcoin Analysis

Again, nothing has changed in my outlook. I expected Bitcoin to move into the $78,000 to $80,000 area, with the possibility of an extension toward $85,500, where significant liquidity is sitting. Market makers have a clear incentive to target that zone before the next major move.

At Sonderberg Research, we have already started building our short setup. The goal is to get the average entry price as close as possible to the $85,000 region, which I currently view as the likely local top before the next major decline.

Bitcoin remains in Stage 4 of the bear market cycle. This is the choppy, exhausting range phase designed to trap both sides. However, I believe we are getting close to Stage 5, the final capitulation phase, where Bitcoin will eventually form its true cycle bottom.

Economic Data, Rates & the Fed

Last week’s data was driven by the April 29 FOMC meeting, PCE inflation and GDP figures, and overall pointed to a resilient but increasingly difficult macro environment. The Fed kept rates unchanged at 3.50 to 3.75% for the 3rd consecutive meeting, but the message was more important than the decision itself. This was not a neutral pause. It was a pause with a clear inflation warning. 4 Fed members dissented against the decision, the first time since 1992 that 4 members dissented on a Fed rate decision, while 3 members did not support the inclusion of an easing bias in the statement. That shows growing division inside the Fed. The market wants rate cuts, but parts of the Fed are clearly uncomfortable sending that signal while inflation risk is rising again. The most important wording change was that the Fed replaced “somewhat elevated” with “is elevated” when describing inflation. That may look small, but it shows the Fed is becoming more direct about inflation pressure. Powell also stated that higher energy prices will push up near term inflation, while Middle East developments were directly mentioned as a source of uncertainty. Core PCE in the Q1 GDP report accelerated to 4.3%, the highest level in over a year, while headline PCE and monthly inflation data remained broadly in line with expectations. Growth was mixed, with Q1 GDP at 2.0%, but strong consumer spending, personal income, investment and historically low jobless claims showed that the economy is still not weak enough to force the Fed into rescue mode.

Treasury yields moved higher across the curve, supported by rising oil prices, inflation concerns and the more hawkish tone from the Fed. Market expectations shifted away from meaningful rate cuts and even began pricing a small chance of rate hikes further out. For investors, the takeaway is clear. The Fed is not preparing the market for easy liquidity. Policy is still described as appropriate, inflation is elevated, energy prices are rising and geopolitical uncertainty is feeding directly into the inflation outlook. That makes aggressive easing harder to justify, even if growth starts to weaken. Equities and crypto can still rally in the short term if markets price in future cuts, but the macro backdrop is less supportive than many investors want to believe. This looks like a new phase of Fed policy. The market is still looking for cuts, while the Fed is looking at inflation risk. That gap is usually where volatility begins. Powell also confirmed he will remain on the Fed Board as Governor after May 15, meaning his influence may continue even after his time as Chair ends. And he closed with a fitting line. “Thank you very much everyone. I won’t see you next time.”

Economic: Business Inventories
Earnings: Axsome Therapeutics Inc. (AXSM), BWX Technologies Inc. (BWXT), CNA Financial Corp. (CNA), Coterra Energy Inc. (CTRA), Diamondback Energy Inc. (FANG), Norwegian Cruise Line Holdings Ltd. (NCLH), ON Semiconductor Corp. (ON), Palantir Technologies Inc. (PLTR), Pinnacle West Capital Corp. (PNW), Tyson Foods Inc. (TSN)

Economic: ISM Non Manufacturing Index, New Home Sales, Trade Balance
Earnings: Advanced Micro Devices Inc. (AMD), Anheuser Busch Inbev SA (BUD), Arista Networks Inc. (ANET), Cummins Inc. (CMI), Duke Energy Corp. (DUK), Eaton Corporation PLC (ETN), Emerson Electric Co. (EMR), EOG Resources Inc. (EOG), KKR and Co. (KKR), Lumentum Holdings Inc. (LITE), Pfizer Inc. (PFE), Shopify Inc. (SHOP), Strategy Inc. (MSTR), Suncor Energy Inc. (SU)

Economic: ADP Employment Change, EIA Crude Oil Inventories, MBA Mortgage Applications Index
Earnings: Apollo Global Management (APO), Arm Holdings PLC (ARM), Applovin Corp. (APP), CVS Health Corp. (CVS), DoorDash Inc. (DASH), Equinor ASA (EQNR), Fortinet Inc. (FTNT), Marriott International Inc. (MAR), Novo Nordisk A/S (NVO), Uber Technologies Inc. (UBER), Walt Disney Co. (DIS)

Economic: Construction Spending, Consumer Credit, Continuing Claims, EIA Natural Gas Inventories, Initial Claims, Productivity Preliminary, Unit Labor Costs
Earnings: Airbnb Inc. (ABNB), Argenx SE (ARGX), Becton Dickinson and Co. (BDX), Cenovus Energy Inc. (CVE), Cheniere Energy Inc. (LNG), Cloudflare Inc. (NET), Coinbase Global Inc. (COIN), CoreWeave Inc. (CRWV), Datadog Inc. (DDOG), Howmet Aerospace Inc. (HWM), McDonalds Corp. (MCD), McKesson Corp. (MCK), MercadoLibre Inc. (MELI), Shell PLC (SHEL), WW Grainger Inc. (GWW)

Economic: Nonfarm Payrolls, Average Hourly Earnings, Average Workweek, Unemployment Rate, University of Michigan Consumer Sentiment, Wholesale Inventories
Earnings: AngloGold Ashanti PLC (AU), Brookfield Asset Management Inc. (BAM), Enbridge Inc. (ENB), Fidelity National Information Services (FIS), PPL Corp. (PPL), Sony Group Corp. (SONY), Toyota Motor Corp. (TM), Ubiquiti Inc. (UI)

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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