Welcome to this week’s market recap. The central question for investors remains whether Bitcoin has already established its final macro bottom or whether one more corrective move is still ahead. We will address that question first before reviewing Bitcoin’s technical structure, the U.S. dollar, USD/JPY, the S&P 500, Ethereum, and the major macroeconomic events awaiting markets next week.

The most important question currently facing the market is whether Bitcoin’s decline toward approximately $57,000 to $58,000 represented the final macro bottom.

The possibility must be taken seriously. Bitcoin has recovered from those lows, defended an important long-term moving average, the 200 week moving average, and produced a profitable tactical long opportunity at Sonderberg Research. However, I do not yet believe there is sufficient evidence to confirm that the broader bottoming process has been completed.

Our AI models have detected a significant shift in retail expectations. Over the past several weeks, a growing number of investors began anticipating a Bitcoin bottom in September or October, commonly between approximately $40,000 and $50,000. At one point, roughly 55% of the retail commentary analyzed by the models reflected some variation of this view.

For one year, my own base case has centered on a potential bottoming region near or below $45,000, with September or October representing the most likely timing window. Roughly one year after the cycle top. However, I have never presented that forecast with absolute certainty. I have also repeatedly warned that the market could front-run both the price target and the timing, as with time, retail traders start to adopt this same idea.

If the majority expects a bottom in September or October, capital may begin entering the market in August or even earlier.

This is why we cannot become anchored to one price or one date. The correct decision must come from the combined message of macroeconomic conditions, sentiment, liquidity, and technical structure. A price target is a framework, not a rule that should override the evidence developing in real time.

We saw the same mistake at the previous cycle top. Many investors continued waiting for Bitcoin to reach $130,000, $140,000, or even $180,000 despite clear deterioration across macro, sentiment, and technical indicators. They remained committed to a price target rather than reacting to the market in front of them.

My current view remains that Bitcoin is still in Stage 5 and that one final corrective move is likely before the broader bottoming process is complete. However, the probability that the original target will be front-run has increased.

I consider prices below $60,000 to be an increasingly attractive long-term accumulation region. That does not mean I am buying aggressively or deploying all available capital immediately. I am approaching the market carefully because sentiment has not yet reached the type of maximum fear that has historically accompanied definitive macro bottoms.

A meaningful portion of the market remains moderately bullish, partly because of expectations surrounding regulatory developments such as the Crypto Clarity Act. That optimism may prevent the market from reaching the emotional capitulation normally associated with the final low.

The objective is not to identify the exact bottom. The objective is to accumulate exposure when the long-term risk-to-reward profile becomes increasingly favorable while preserving enough capital to take advantage of a deeper decline.

Recent optimism has been heavily influenced by expectations surrounding the Crypto Clarity Act. However, prediction-market probabilities illustrate how quickly these narratives can change. The estimated probability of passage rose to approximately 53% before falling back toward the 30% range.

This reinforces an important principle: an investment thesis should never depend entirely on one political or regulatory event. Legislation can be delayed, amended, weakened, or rejected, while markets often price in the most optimistic interpretation before the final outcome becomes clear.

The Crypto Clarity Act may be an important factor for the digital-asset industry, but it cannot be evaluated in isolation. Our framework remains based on three primary pillars: macroeconomic conditions, sentiment, and technical structure. No single headline should outweigh the combined message of those three areas.

The U.S. Dollar Index is once again becoming an important headwind for risk assets. DXY is trading above 101 and has shown renewed bullish momentum. The dollar’s ability to remain in the mid-101 region is currently supportive for the currency and restrictive for equities and cryptocurrencies.

Higher oil prices are one of the forces supporting the dollar. Persistent inflation increases the probability of tighter Federal Reserve policy, which can strengthen U.S. yields and attract capital toward dollar-denominated assets.

A stronger dollar generally tightens global financial conditions. It can reduce liquidity, weaken demand for leveraged positions, and create a more difficult environment for equities, cryptocurrencies, and other higher-beta assets.

The dollar’s recent strength is also connected to a significant technical development in USD/JPY.

The weekly USD/JPY chart has broken above the major horizontal resistance zone that had capped the pair since mid-2024. USD/JPY is now trading in the high-163 region, placing it above the previous rejection area between approximately 158 and 160.

That resistance zone had repeatedly prevented USD/JPY from extending higher. Those earlier rejections also helped prevent the U.S. Dollar Index from sustaining a decisive move above the important 100-101 region.

With USD/JPY now clearing that barrier, the technical backdrop for the broader dollar may be changing. The removal of a multi-year resistance level gives the pair greater room to trend higher over longer timeframes. Further upside in USD/JPY could reinforce DXY strength and increase pressure across global risk markets.

This development also creates uncertainty surrounding the yen-funded carry trade. For years, investors have borrowed cheaply in Japanese yen and deployed that capital into higher-yielding or higher-risk assets. Significant volatility in USD/JPY, Japanese interest rates, or currency-hedging costs can force portions of those trades to be reduced or unwound.

An abrupt carry-trade unwind could create liquidity stress across global markets. This does not guarantee an immediate sell-off, but it represents an additional macro risk that must be monitored closely.

Ethereum will be one of the most important assets to monitor during the coming accumulation phase.

We previously accumulated Ethereum near the April 7 low, at approximately $1,400 to $1,500. Ethereum subsequently advanced toward $5,000, allowing us to exit with a return of roughly 3.5x the original entry within only a few months.

During the last bear market, I allocated more aggressively toward Solana, which ultimately generated an even stronger return of more than 10x. However, during the next cycle, Ethereum may offer a particularly attractive risk-to-reward profile.

I am already showing clients the Ethereum entry points I am monitoring, along with the specific percentage of capital we plan to allocate across each portfolio bucket as the accumulation phase develops.

I expect to increase my Ethereum exposure compared with the previous accumulation phase, although Bitcoin will remain the largest core position. The objective will not be to buy every altcoin indiscriminately. Capital should remain concentrated in assets with strong liquidity, institutional relevance, favorable technical structures, and a high probability of surviving the full market cycle.

Next week will be one of the more consequential earnings weeks of the quarter. Several major companies are scheduled to report, including Microsoft, Meta, Amazon, Apple, and Coinbase.

These results will influence the broader equity market, particularly the technology sector. Coinbase’s report may also provide insight into institutional and retail activity within the digital-asset market.

Strong or weak results from these companies can affect market sentiment far beyond their individual share prices. Due to their size and index weightings, earnings from the largest technology companies can materially influence the direction of the S&P 500 and Nasdaq.

The main macroeconomic event will be Wednesday’s FOMC interest-rate decision. Markets are currently assigning approximately a 65% probability that the Federal Reserve will leave rates unchanged.

Those probabilities can still shift before the announcement, but the market has already begun pricing in the anticipated outcome. The weakness and volatility appearing ahead of the meeting are therefore not unusual.

Markets frequently become more cautious as an FOMC decision approaches, especially when uncertainty surrounding inflation, energy prices, and future monetary policy remains elevated. The closer we move toward Wednesday, the greater the likelihood of increased volatility across equities, bonds, currencies, and cryptocurrencies.

Although markets currently expect no change at the upcoming meeting, expectations for the remainder of the year are becoming increasingly hawkish.

The market is pricing in the possibility of a 25-basis-point rate hike in September, followed by another 25-basis-point increase in December. There is also a possibility that an additional hike could be considered in October, although the current base case remains two increases this year.

This development should not come as a major surprise. We have discussed the possibility of renewed rate hikes for some time, particularly if inflationary pressures remain persistent.

The expectation that Kevin Warsh would automatically pursue a strongly dovish policy stance was always questionable. His historical record has generally been more hawkish, meaning he has been more willing to support restrictive monetary policy when inflation presents a meaningful threat.

Oil is adding substantially to the inflationary threat. Crude prices have risen sharply, with certain benchmarks trading near or above $90 per barrel.

Higher energy prices affect far more than the cost of gasoline. They raise transportation, manufacturing, agricultural, fertilizer, pharmaceutical, construction, and distribution expenses throughout the economy.

Gasoline prices in parts of the United States have already returned to approximately $4 per gallon after trading considerably lower not long ago. As oil moves higher, the cost of producing and transporting nearly every major category of goods also rises.

This makes it significantly more difficult for the Federal Reserve to return inflation to its long-term 2% objective. The conflict involving Iran creates another layer of uncertainty, as continued geopolitical disruption could keep oil prices elevated and place renewed pressure on inflation expectations.

Under those conditions, the Federal Reserve may have limited options. If inflation remains structurally above target, additional interest-rate increases may become necessary, even if those increases place further pressure on economic growth and risk assets.

The Bank of Japan will also hold an important policy meeting next week. The current expectation is that the central bank will leave its policy rate unchanged at approximately 1%.

Although no immediate adjustment is expected, the Bank of Japan’s communication will still be important because of the broader developments in the yen, Japanese bond markets, and the USD/JPY exchange rate.

Any unexpected shift in policy language could affect the yen carry trade, global liquidity conditions, and risk assets more broadly.

The central message from this week is that the market remains caught between improving long-term accumulation opportunities and a deteriorating short-term macroeconomic backdrop.

Bitcoin continues to defend its 200-week moving average, and the tactical long from approximately $58,000 has remained profitable. However, resistance between $65,000 and $66,000 produced the expected rejection, while the broader Stage 5 structure has not yet been invalidated.

At the same time, the original September or October bottoming thesis is becoming more widely accepted. That increases the possibility that investors will front-run both the anticipated timing and the original price target. We therefore cannot afford to remain anchored to one exact number.

The framework remains unchanged: follow macroeconomic conditions, sentiment, liquidity, and technical structure together. Accumulate carefully when long-term value becomes increasingly attractive, preserve capital for further volatility, and never allow a fixed prediction to become more important than the evidence.

I wish everyone a relaxing weekend.

Monday (July 27)

Economic: Durable Goods Orders
Earnings: Alliance Resource Partners LP (ARLP), Bank of Hawaii Corp. (BOH), Brown and Brown Inc. (BRO), Cadence Design Systems Inc. (CDNS), Celestica Inc. (CLS), Coca-Cola FEMSA SAB de CV (KOF), Dyne Therapeutics Inc. (DYN), F5 Inc. (FFIV), Nucor Corp. (NUE), Principal Financial Group Inc. (PFG), Welltower Inc. (WELL)

Tuesday (July 28)

Economic: Advanced International Trade in Goods, Advanced Retail Inventories, Advanced Wholesale Inventories, Consumer Confidence, FHFA Housing Price Index, S&P Case-Shiller Home Price Index
Earnings: American Tower Corp. (AMT), Barclays PLC (BCS), Bloom Energy Inc. (BE), Boeing Co. (BA), Coca-Cola Co. (KO), Corning Inc. (GLW), Electronic Arts Inc. (EA), Ford Motor Co. (F), GSK PLC (GSK), Illinois Tool Works Inc. (ITW), KLA Corp. (KLAC), S and P Global Inc. (SPGI), Seagate Technology Holdings PLC (STX), Sherwin-Williams Co. (SHW), Teradyne Inc. (TER), United Parcel Service Inc. (UPS), Visa Inc. (V)

Wednesday (July 29)

Economic: FOMC Decision, EIA Crude Oil Inventories, MBA Mortgage Applications Index
Bank of Japan (BOJ) Monetary Policy Meeting (July 30–31)
Earnings: Amphenol Corp. (APH), Aon PLC (AON), Arm Holdings PLC (ARM), Automatic Data Processing Inc. (ADP), Boston Scientific Corp. (BSX), Deutsche Bank AG (DB), General Dynamics Corp. (GD), Johnson Controls International PLC (JCI), Lam Research Corp. (LRCX), Meta Platforms Inc. (META), Microsoft Corp. (MSFT), Qualcomm Inc. (QCOM), Starbucks Corp. (SBUX), UBS Group AG (UBS), Vertiv Holdings Co. (VRT)

Thursday (July 30)

Economic: Continuing Claims, EIA Natural Gas Inventories, Q2 GDP Advanced Reading, Initial Claims, PCE Prices, Personal Income, Personal Spending
Earnings: Amazon.com Inc. (AMZN), Anheuser-Busch InBev SA (BUD), Apple Inc. (AAPL), Bristol-Myers Squibb Co. (BMY), Coinbase Global Inc. (COIN), Corteva Inc. (CTVA), Live Nation Entertainment Inc. (LYV), Mastercard Inc. (MA), Monolithic Power Systems Inc. (MPWR), Quanta Services Inc. (PWR), Shell PLC (SHEL), Stryker Corp. (SYK), Trane Technologies PLC (TT), Vale SA (VALE)

Friday (July 31)

Economic: Chicago PMI, Employment Cost Index, University of Michigan Consumer Sentiment
Earnings: AbbVie Inc. (ABBV), Chevron Corp. (CVX), Colgate-Palmolive Co. (CL), Dominion Energy Inc. (D), Eaton Corp. (ETN), Enbridge Inc. (ENB), Linde PLC (LIN), NatWest Group PLC (NWG)

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.

→ Apply for your Strategy Call: sonderbergresearch.com

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Kind regards,
Diego Sonderberg

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