The S&P 500 is in bounce mode today. Bitcoin is struggling. What’s up?
Bitcoin is now down 32 percent from the October high. Technically speaking, the chart is disastrous.
In E-wave terms the pattern looks like a negative impulse. Impulse moves are 5 waves with wave 3 the strongest. There are 5 clean segements in what looks like a wave 3 impulse.
In E-wave corrective moves are in 3 moves. Wave 2 in my chart has 3 segments.
If wave 4 up is starting, we should now see a 3-segment move up, completing wave 4. Then it would be wave 5 down which could also be very nasty.
Bitcoin Weekly
The weekly chart lends support to the lead chart. It shows 5 mostly clean waves up, to a pattern that could be a long-term high.
Support is at 74,500 and I would expect a bounce there. But Bitcoin has tendencies to bounce at random levels. It’s possible one started today.
The Bitcoin low of the day is 80,562 and it’s now 84,500 as I type. There is no support at 80,000 so this is a rather normal Bitcoin bounce out of the blue.
Is Bitcoin In a Bear Market?
Well, what’s your definition? In stocks, a 20 percent decline is a bear market.
However, Bitcoin is so volatile, I am hesitant to call a 20 percent move much more than a correction. Perhaps doubling the stock market definition to 40 percent is a reasonable thing to do.
Bitcoin Monthly Chart
I don’t see how to put a 5-wave count on that. Perhaps going back prior to 2015 is needed. Perhaps it’s a terminal wave-5 up that subdivided or truncated.
A Bit of a Warning to Bitcoin Bears
When I post on Bitcoin, it is often near the end of a move.
That could easily be the case here.
On the other hand, IF this is the start of a negative move from a terminal wave 5, it is going to get very nasty.
I posted support lines, but in genuine bear markets, support does not hold. That would make the likely targets first at 49,000 then 25,000.
Those would be impressive declines, but not at all unusual for Bitcoin.
Here’s one other factor of note. Bitcoin has a strong tendency to follow moves in technology. Has the Nasdaq peaked?
S&P Bounce off Support
The S&P 500 bounced right on cue today. This is a technical bounce until proven otherwise.
If it’s a genuine bounce, then we are off to new record highs.
However, those open gaps are begging to be filled. And I doubt Bitcoin will buck the trend if a bear market has started in technology or the S&P 500.
How Things Look
Ominous.
But that is how they look. Nothing would surprise me at this point because fundamentals just don’t seem to matter.
Yesterday, I noted Huge Stock Market Gap and Crap, Sell the Nvidia Good News Event
It’s a huge warning when good news is smashed.
Today we see a bounce. But it’s expected. Right at support.
Bitcoin is struggling, but Bitcoin is not at support.
Have the S&P 500 and Nasdaq Stock Markets Peaked?
On November 18, I asked Have the S&P 500 and Nasdaq Stock Markets Peaked?
I don’t know and you don’t either. Instead, let’s discuss “What If?”
What I Said Yesterday
The market is insanely priced and has been for a long time. But one should not argue with bull markets.
It’s a very bad sign when good news is sold. What more even better news is coming?
If the top is in, click on the above link to see my sobering targets.
And regarding Nvidia and AI, please see Circular Investment Deals in AI Look Similar to the Dot-Com Bubble
Please buy my product, and I’ll use the money to buy yours.
Recall Lucent’s lending of billions of dollars to upstart telecom companies fueling Lucent’s growth.
When the financing went bust the scheme crashed.
Now, AMD is paying OpenAI to be a customer, albeit in a different way. The same is going on with Nvidia and OpenAI. But at least it’s not debt financed.
That’s the technical picture and a bit of the AI fundamental picture. Both are looking terrible.
But some will note the contrary nature of me posting technical charts.
I am confident of an eventual bitcoin collapse. The sooner the better. With stocks a large collapse will be eventually stopped by a floor based on intrinsic valuation, which for bitcoin is clear, i.e. = 0!
BITCOIN is JUST indeterminate electrons swimming in unknown computers, which have no intrinsic value, neither regulated nor backed by a government or any other official institution such as a bank. In other words, as a currency or money, Bitcoin is LESS credible than ANY fiat currency including the Russian rouble or the North Korean Won or the Turkish Lira.
Anyone who buys Bitcoin is either a shill or a moron.
True but some have made a fortune speculating on Bitcoin (and of course others have lost real money) And just about anyone that owned bitcoin a few weeks ago has “lost” wealth that most humans would considered as having been “earned” (through shrewd investment LOL) – though gains were unfortunately unrealized, and now severely depleted.
The real question here is if the whales that have pushed up the price of nothing through selling and buying from left hand to right hand, suckering in the gullible, can keep the fantasy rolling….
The fantasy is your entire financial, economic and political system. Not just Bitcoin. The problem is, you know it as does everybody else. You may grab one of the seats remaining but the building is burning.
Exactly as far as circular vendor financing (ie., circular finance deals) being a part of the current boom with AI.
Mister Mish, excellent reference to Lucent’s circular finance deals, which eventually led to a 90% drop in its stock price.
Lucent’s lending of billions to telecom startups artificially boosted sales and fueled its late‑1990s growth, but when those borrowers collapsed, Lucent’s own empire unraveled.
So someone tried to convince that the value in BC is in its blockchain. So what does that mean? Can you buy and sell blockchains? Is it a copyrighted software? Current estimates say 96% is simply “investment”. I suppose gold can be considered similar but it does have industrial uses and people like to make jewelry out of it. It can’t be as easily destroyed though.
From the info I’ve seen, on average it takes $113k to mine a Bitcoin. This is substantially higher than the price of the coin on the open market. The higher priced miners should close up shop. As the price goes down, Bitcoin should hit an event horizon where it simply goes to Zero because of the lack of miners.
This adds an extra complication to technical analysis.
It is based on economies of scale and efficiencies with mining and also earning money from transaction fees.
That is what Eric Trump’s American Bitcoin Corporation is pursuing as far as industrial-scale gains in productivity to reduce the costs with mining and processing transactions.
Great use of term “event horizon”.
I will now apply that term to other such situatiions like the Ratio of GDP to National Debt and see if that type of invisible danger signal can be put to good use.
Thanks.
Ah, Bitcoin. Several things jump off the charts when discussing technical analysis. There are very strong 4-year cycles in using both tops and bottoms. October 2025 was the 5th four-year cycle peak. There are 4 four year cycle lows. The only thing more impressive than this is the consistency of peaks in the 60 year cycle in 10yr US bond yields going back to President George Washington.
The price swings in the 4 year cycles are HUGE starting from the 2012 peak, bear then bull markets were:
92% loss 1st bear, end Wave 2
543x gain, 2nd bull, Wave 3’s wave 1
84% loss, 2nd bear, Wave 3’s wave 2
107x gain, 3rd bull, Wave 3’s wave 3
83% loss, 3rd bear, Wave 3’s wave 4
20x gain, 4th bull, Wave 3’s wave 5
75.6% loss, 4th bear, Wave 4
8.2x gain, 5th bull, Wave 5
These swings don’t lend themselves to linear extrapolations, and no geometric pattern is obvious. Given bear markets have been crashes, I would expect at least a 50 to 66% loss, placing the bottom in the range of $41.25K to $62.5K.
E-waves show a complete motive pattern out of the introduction of Bitcoin in 2010
Wave 1 ended in July 2011
Wave 2 ended in November 2011
Wave 3 ended in November 2021, extended, which is typical
Wave 4 ended in November 2022
Wave 5 ended in October 2025, overlapped Wave 3’s smaller wave 4, which is typical
The personality of all previous motive wave segments have been exponential even on a log scale; however, Wave 5 looks linear to slightly wilting over.
Corrections following Wave 5 can be anywhere in the range of the previous Wave 4 correction, which is between $15.6K and $67.9K. Sometimes a correction will find support in the range of Wave 3’s wave 4 ($3.2K to $18.0K)
Corrections have also shown to retrace Fibonacci amounts of the motive wave being corrected. Fibonacci downside targets are $41.7K, $47.6K $62.5 $78.5K, and $82.5K. We can eliminate $82.5K, and $78.5K is so close in such a short time it most likely will not be the bottom.
A 15+ year motive wave takes time to correct. I doubt 1 year, as indicated by previous 4 year cycles, will be enough. Taking TWO 4-year cycles would be getting close (57%) to a cluster of Fibonacci time ratios (60%, 62%, and 66%), and given cycles vary, a 3 to 20% variation is within cycle behavior.
While not an exact science Hurst and E-waves indicate a major Bitcoin bear market.
Terrific as usual Mish!
I love the way people talk about bitcoin as though it has fundementals. It is backed by nothing and has value only because some believe a greater fool will pay more for it in the future. Because that belief is entirely human “Technical analysis” which owes any of its usefulness to human psychology as it pertains to gambling may have some application but in the end it is simply speculation and mostly irrational.
I totally agree.
If the asset-debt macroeconomic system is self-ordering and follows a 1929-like 27 October 2025 to 31 December 2025 7/17-18/14/10 day :: y/2-2.5y/2xy/1.5y 4-phase (2xy is a lower lower high where x = y) fractal decay series model, the SPX should reach the 6000-6150 level by Wed to Friday (day 17-18 of the 2nd fractal) of next week (Thursday being a trading holiday. ) Both crypto and gold in USD will follow declining global equity valuations in US and global currencies.
Has anyone tried to do technical analysis on dice rolls? Trading BC is no different than rolling dice.
just make sure you don’t get snake eyes and keep rolling.
expecting rate reduction
Digital gold? NOT!
Bitcoin? does Mish have rental property?
https://www.fox13now.com/news/local-news/utah-population-expected-to-explode-by-millions-over-decades-report-shows
Mormons be breedin’
No way it can happen, there’s not enough water to support that many people there unless huge pipelines are built to bring it from somewhere.
Canada! But the price will be heavy due to reciprocal tariffs.
There is no water in Western Canada to send to the Western US States. It’s as dry there as it is in the mid west.
Desalination on a massive scale is the only way water supplies are going to increase.
If the Japanese bond market continues to sell off, we will see more and more leveraged Yen carry trades unwind, and that is bad for global liquidity and thus bad for overpriced financial assets.
No one chartist can see everything on every chart. Allow me to add one observation to your analysis of the chart, price levels, and potential supports. I am not an EW guy but in this scenario your plots look pretty well reasoned and logcial.
There is a trendline support I have had drawn since 2022-2023, it connects lows on the monthly chart from Aug-Oct 2015, Nov ’22 – Jan ’23, and Sep-Oct 2023. This line has been rock solid for ten years. Last week it closed above that TL. This week it took it out hard. It’s not likely BTC closes above the TL (need 91,500-92,000 by Sunday 7pm EST), but it does have that chance. Then next week we could save the monthly close by closing above that level. It’s pretty rocky, and hard to see it happening with the downside momentum that has been in full effect lately, but if you put that line on your chart you’ve got one more important and relevant data point to collect info with to better inform your decisions.
GL and Stay Safe
There are some models for Bitcoin like the Bitcoin rainbow chart, which has some somewhat different versions. But from what I’ve seen of the rainbow chart, Bitcoin has last reached the upper bands (red color) in 2017.
And Bitcoin has been in the lower bands of the rainbow chart for since around February 2022, which is the longest it has ever been. With more adoption of Bitcoin such as through ETFs then that means more of an upside potential for it.
About a year ago, Lyn Alden had a great post on Bitcoin as a barometer of global liquidity. It’s a great piece and I hadn’t thought of that article until I starting reading/watching lots of information on growing defaults in private equity and growing counterparty risk across the board.
This is how the GFC started in 2007 then ballooned into a catastrophe under a republican run circus so history will likely repeat.
https://www.lynalden.com/bitcoin-a-global-liquidity-barometer/
Yeah for sure liquidity constraints are the #1 mention for the downside action between all the financial pods I listen to, and sites I read. At least for the last 10-14 days.
If this leads to the Fed opening the QE spigot then more inflation and stocks to the moon, at least, until it all comes crashing down.
I’ve been wondering about how leveraged the current market is. All of this money pouring into Ai and Bitcoin and stocks, all at once. Is all that “value” real? Interest rates are high so borrowing would seem to be at premium at least.
I think the FOMC is going to remain cautious and keep the Fed Funds rate around 4% (it was 5.5% back in 2023) and provide some liquidity with maintaining the Fed’s balance sheet around $6 trillion when quantitative tightening ends next month. They’ll buy some US Treasuries as far as replacing maturing US Treasuries to keep the balance sheet steady.
I don’t see them returning to quantitative easing unless we are in a recession and/or unemployment increases to 5.75% from currently 4.4%. I’ve read a healthy unemployment rate is around 4 to 5%.
Thanks
I am tied up for much of the day but I believe Lyn Alden is the sharpest mind around on these matters.
Thank goodness Trump wants the public to be able to access private credit in their retirement accounts. . Thats as close to a bell ring as possible. Isn’t private credit already available in the publicly traded BDC’s.
Back in the 1990s I had a conversation with my dad about the Euro taking over the world, this was around the time Saddam said he would take oil trade off USD and go Euro. My dad said to me, “son don’t think for a minute these American bankers don’t have a plan to keep things going the way they want them too keep going, they always come up with something.”
I think about that line often because every time I think they’ve run out of money or ideas they come up with more. Raiding 401k accounts via “private equity” is the latest trick.
The other is extract as much equity out of homes via property taxation. https://www.youtube.com/watch?v=eaDQ3ts9E58
Why would bankers ever run out of money and need to raid 401K accounts when they can get endless liquidity from the Fed whenever the need it? We’ve already proved that with the 2008 bailout.
On the other hand, the government needs money (taxes) so they would love to find a way to dig into that 401K money. I saw an article today about Italy trying to dig into the privately held gold that Italians have in order to generate a bunch of revenue for the government. A 15% tax on privately held gold in order to make it legitimate. That’s the kind of thing I fear happening here.
It was a long conversation that I condensed for sake of brevity but if you haven’t figured out that the bankers run the world regardless of what “government” appears to be running things, you need to wise up.
Politicians and the people they claim to serve are the slaves, the bankers are the masters.