Is this Bear Market Over?

Chart of the Day — What Bitcoin Did
Trade of the Day — Longing DOGE, Sponsored by Kalshi
Alpha Leaks — Box, HYPE & Intuit
News Roundup — Is the Bear Over & Understanding the US' Bond Buybacks

What Bitcoin Did

Given what just transpired this week, your Chart of the Day is Bitcoin. We’re zoomed out on the weekly here, with just one question on our minds. Is this bear market over?

Here’s the backdrop. Bitcoin has been in a clear four year cycle since its inception. In Bitcoin’s previous two bear markets, the bottom printed roughly one year after each cycle’s respective blow-off tops. And after the low was printed, Bitcoin would then go on to cross above the 200D SMA (shown here in blue) roughly two to four months later, kicking off the next multi-year uptrend.

Up until this past Wednesday, most of the data indicated that we should expect more of the same. Bitcoin had fallen 50% from its ATHs, it was trapped under the 200D SMA, and it was grinding sideways with low volatility — which was all exhibited in the last two bear markets, just before Bitcoin plunged to make its final lower lows for the cycles.

So using history as a guide, our projected bottom for Bitcoin this cycle was early October (less than 60 days away), and our projected cross above the 200D SMA was late Q4 or early Q1 2027.

Most of the market was imminently expecting that final push lower. But then Bitcoin did the exact opposite. It blasted straight through the 200D SMA at $69K, and surged 23% north to $79.5K, as of yesterday. WTF?!?!

So, does this all mean that this bear market is over, and we can reasonably assume that the July 1st print at $57.7K was this cycle’s bottom? Let’s continue the discussion in our first news story below.

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Now fair warning, longing or shorting with leverage is very risky in the current trading environment. No one has a clue as to whether Bitcoin will keep ripping from here, or retrace to the 200D SMA. And whatever Bitcoin does, the alts will surely follow.

Having said that, if you’re going to gamble, then we like the DOGE long here at $0.091. And why? Well, two reasons:

1. When you zoom out, the pump that DOGE got over the last three days is tiny compared to the larger chart. So we think it has more room to run here.

2. DOGE is resting just above its 200D SMA right now at $0.89. So it’s not a bad place here for long.

Ultimately, if Bitcoin can just hold steady here in the upper $70Ks, then that probably gives DOGE a window to make a run here.

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Is this Bear Market Over?

[Make sure you’ve read the Chart of the Day section before reading this.]

Before we get to our answer, let’s first discuss our framework for how we think about such questions.

We view questions like this in terms of probabilities, and not in binary, all or nothing answers. Meaning, it’s technically possible that Bitcoin tomorrow could rip to $200K, or crash to $20K. Both are possible, but how likely (probable) are these events to happen? That’s the better question.

With that framework in mind, how likely is it that this bear market is over, and that Bitcoin’s cycle bottom got printed on July 1st at $57.7K? In our minds, we’re estimating that probability at roughly 65%.

So why the flip (because before Wednesday, we were thinking that there was roughly a 70% chance that Bitcoin would print the final lower low in Q4)? Here’s our reasoning:

● Little Time Left for the Bears: The timing of when Bitcoin made this surge north, in the context of the calendar under the four year cycle theory, gives very little time left for the bears to push for a lower low in Q4. While not impossible, it seems increasingly unlikely that Bitcoin is going to retrace this entire move, and then go on to print a new, lower low this year.

● 200D SMA Cross: The 200D SMA is regarded as the bull / bear moving average. Roughly speaking, when prices are holding above or below it, it’s a bull or bear market, respectively. Historically, when Bitcoin crosses (and holds) above it deep in the bear market, the cycle low has already been printed.

● The Market's Psychological Shift: You can already see it on your timeline. The market’s mood appears to have shifted from anger and depression to disbelief (i.e. “this is a sucker’s rally”). Disbelief is the first stage after the cycle low has already been printed.

If you’re a premium subscriber, then you know that we thought a lower low in Q4 was the mostly likely outcome. But you’ll also know that the 200D SMA was our invalidation point for this theory. Well, Bitcoin invalidated our theory, so now we’re pivoting to thinking that the bear market is probably finished.

Moving forward, if Bitcoin (1) can get a daily close above $82.7K, or (2) it continues to hold above the 200D SMA, then the more likely it is that the bears are finished. Keep your on these two points for further confirmation that the bear market is over.

Understanding the US Bond Buybacks — Bitcoin’s Bear Ender

Let’s take another look at the thing that might have just ended Bitcoin’s bear market, and that’s the US’s bond buyback program, which was announced Wednesday morning. Understanding the what and whys here is important, as we move forward in these markets.

On Tuesday we reported that the 30-year US bond yield had climbed to 5.33%, its highest level in 19 years. High yields are bad for the USA because (1) they put the country even further into debt (i.e. the national debt is now above $40T), and (2) they tighten financial conditions across the economy.

So on Wednesday, in response to this situation, US Treasury Secretary Scott Bessent flipped over the apple cart. Bessent announced that the Treasury Department at minimum would double the size of their bond buybacks on longer-dated bonds (US20Y and US30Ys) from $2B to $4B (at least). The buybacks are set to begin on September 9th.

Simply put, the US announced that they are buying back more of their bonds off the market, in an effort to bring yields down (i.e. remember that increased buying pressure pushes yields down). And as we all know by now, that announcement was the spark that ignited Bitcoin’s rocket fuel (the rocket fuel was the overleveraged shorts and ensuing short squeeze).

So here’s the question: why did Bitcoin tick up from this bond buyback announcement, fundamentally? Here’s the reasoning:

● The buybacks signal looser monetary conditions. The US Treasury forcing yields lower loosens financial conditions across the entire economy (i.e. lower mortgage rates, car loans, etc). That indirectly increases liquidity into the system, which is good for risk assets.

● The buybacks make US bonds less competitive. US bonds paying north of 5% are enticing, and some investors will run to those bonds over non-yielding assets like Bitcoin and hold. But with yields projected to now come down, investors might turn their attention back to our assets.

● The US government blinked. The buybacks signal that not all is well with the US’ monetary and fiscal situation, which is exactly why Bitcoin was created.

Ultimately, US bonds are the base layer of the US’ monetary and fiscal regime, and they have an enormous impact on the US economy and the markets, including Bitcoin. So moving forward, continue to monitor and learn about the US bond market, as it directly implicates our assets.

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