After a pretty violent rejection above $82k, Bitcoin closed back below our $80.5k range low. This is a clear sign that the market may not be ready to head higher yet and needs some more consolidation. $76k is the level to watch here because it is both our range high and the 20W moving average. If we hold it as support, we likely get a nice rally higher towards the 100W MA at $87.5k, but if we lose it, we can expect a choppy summer which is pretty standard for Bitcoin.

Market sentiment has re-entered fear. This isn’t surprising given the fact that sentiment really couldn’t get above neutral even while Bitcoin was rallying. The real question now is whether this sell-off will result in a higher low for sentiment and price or new lows for Bitcoin and sentiment back in extreme fear. It’s very hard to answer that question right now, but we should know very soon now that Bitcoin is trying to hold onto that $76k support level.

The GLI continues to consolidate at the highs, but we still haven’t seen it breakout quite yet. Bitcoin is pulling back exactly when The GLI said it would so some sideways here would be in-line with what The GLI is calling for. We really want to see The GLI breakout soon so that we can start to use that information to be more optimistic about Bitcoin’s next move, but until that happens, more chop and sideways consolidation is the base case.

The US Dollar remains quite resilient within its trading range and that is making it quite hard for The GLI to trend higher. We likely need to see a dollar range breakdown to get The GLI price discovery breakout we are hoping for. In the meantime, we just have to be patient and keep an eye on what the US Dollar decides to do.

Bitcoin continues to follow the base case. We got our low in March. We got our rally into May. Now we are entering a window that is usually pretty challenging for Bitcoin so I am going to remain a bit cautious over the next few months. I’d love a surprise to the upside, but it seems like consolidation and chop is the most likely outcome this summer. This consolidation will lay the foundation for Bitcoin’s next rally higher.

I bought some Ethereum this morning. Not because I believe it is an incredible buy here, but because that’s what my system calls for. Price action on Ethereum and Solana have been pretty disappointing, but my position sizing makes it so that their negative performance doesn’t impact my overall portfolio too much while still maintaining the upside potential of them doing better in the future.

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