After a violent rally last week, Bitcoin closed just under ~$78k. This means that Bitcoin was able to close above both our $68k range mid and $76k range high. We have been talking about relative strength for weeks now and this move finally confirmed it for everyone. All that’s left is a close above the 50W MA at $81k to truly get the party started, but even at these prices the likelihood of our shallow bear market base case playing out has skyrocketed.

Market sentiment is in Extreme Greed. This isn’t surprising given the move we saw last week, but it does likely mean the market needs some consolidation. There is a lot of FOMO in the market right now and that’s usually when the market corrects and resets investor sentiment. We have to remain calm and keep our Greed in check the same way we kept our Fear in check over the past few months. Most investors trying to chase this move are likely in for a bumpy ride.

The GLI continues to make new highs. We have spent the past few months acknowledging the clear difference between the liquidity dynamics here in 2026 compared to 2022 and other previous midterm years. It was one of the variables I took into consideration when making the shallow bear market thesis my base case. It’s nice to see Bitcoin providing more and more evidence that liquidity does matter and that this liquidity backdrop is creating very different price action to 2022.

We will be receiving an update to the FED’s preferred measure of inflation, Core PCE, on Wednesday, August 26th. The market is expecting the YoY reading to remain flat at 3.3%. Inflation has been heading in the right direction recently so we want to see that trend continue with another YoY drop or a print in-line with expectations. Reacting to new data continues to be a better strategy than trying to predict it.

Bitcoin is back near the center of our Cheap 🟢 region. It feels great knowing we did plenty of accumulating in the Very Cheap 🔵 region while we had the opportunity to do so. That makes sitting through rallies like this way easier and more enjoyable because we don’t have to chase the move higher. Most investors are stuck with a difficult choice whether to FOMO in or wait and hope for lower prices. We get to sit back and see what the Bitcoin decides to do and react accordingly.

No changes were made to my portfolio this week. The percentage of Bitcoin relative to cash has grown thanks to this recent rally, but I am not interested in taking any profits in the Cheap region. I’ll consider locking in some gains if Bitcoin makes it back to the Fair Value region. The remaining dry powder will be deployed if the market gives us a better buying opportunity later this year, but I am not interested in deploying it at these prices.

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I hope you have an amazing week and the future looks bright. 🤝