The weekly chart shows the rising wedge and a symmetrical triangle. The symmetrical triangle is a continuation pattern of the existing trend. That would imply lower.
The E-Wave weekly chart is also clean. Wave 5 down would be expected.
And if a big top is in, this could just be wave 1 down. By that, I mean waves 1-5 form a bigger wave 1. With Wave 2 up expected then wave 3 down, etc.
Wave 3’s or sometimes 5’s are the biggest waves. So if we are in a huge top setup, Bitcoin could easily crash all the way to 10,000 or even 1,000.
I won’t make any such calls. But my technical expectation is for 5 waves down now, then a rally. Five waves down would be to 50,000 which is also strong weekly support.
I have been accused of writing about Bitcoin after big moves. But this is the second time I have written in advance expecting a move lower.
Wave 4 in the new chart gave a head fake higher. By that I mean the symmetrical triangle broke up, not down. But the head fake did not last long and wave 4 violated no E-Wave rules.
The Great Repricing
Michael Green AKA Professor Plum on X, has a fascinating post on the future of Bitcoin.
The bitcoin “Store of Value” trade has fundamentally broken in two. Unlike gold, which is mined with energy, but then remains “gold” regardless of how much mining energy is expended, bitcoin requires continual energy expenditure to maintain the bitcoin network. The mining stops and bitcoin stops; the mining slows, and the bitcoin network’s “safety” and performance degrade.
The “Jaws of Death” (bitcoin’s insolvency)
In the “Post-Capitalist” era of zero interest rates and surplus energy, we believed we could solve financial problems with code. We ignored the Second Law of Thermodynamics: entropy. Maintaining a digital ledger requires a constant injection of ordered energy.
This chart is the receipt for that entropy [Lead Chart]
The Divergence: Since October 2025, bitcoin’s price has crashed ~27%.
The Stickiness: The network Hashrate (the cost to maintain the bitcoin network) has only dropped ~5-8%.
The miners are currently doing the same amount of work for 27% less revenue. They have billions in sunk capex, and as long as bitcoin remains above the marginal cash cost of mining (~$85K), they will keep mining. This, in itself, is nothing new. It has always been the case that mining has periods of unprofitability. With an “all in” (including depreciation cost) of roughly $130K, the average public miner is now deeply unprofitable and selling everything they mine to generate cash. All else equal, the hashrate must fall, and miners must move to lower cost regions as equipment depreciates and existing power purchase agreements (PPAs) roll off into new, higher pricing.
The “Passive Bid” Has Diminished
At the same time that network risks are rising, the demand side is diminishing. Bitcoin is not temporarily flow-driven. It is necessarily flow-driven.
For two years, the ETF complex provided a mindless, price-agnostic bid for bitcoin. That tap has slowed radically, and now bitcoin must find a new untapped bid. My hunch is that 2026 will start with “value” buyers, rebalancers, and tax-loss harvesting from 2025 returning to bitcoin ETFs and driving prices higher for a time.
Bitcoin: Requires a massive, continuous calorie burn (electricity) just to prevent the network from collapsing. As energy prices rise (thanks to AI and the exhaustion of the 2010s surplus), the cost to maintain your “digital gold” rises.
Gold: Is chemically inert. It sits in a vault. Its maintenance cost is effectively zero and largely unaffected by existing value.
Bitcoin was the “marginal buyer” of energy in an era of surplus. That energy has finally found a “structural buyer” in AI. As the “Pig” (demographic demand) enters the “Python” (limited infrastructure), bitcoin is a luxury being squeezed out of the grid. The market has begun to realize that you cannot store generational wealth in an asset that competes with AI for power. You store it in the asset that exists outside the energy grid.
Did Bitcoin “Digital Gold” Just Become Fool’s Gold?
Bitcoin miners have better things to do than mine Bitcoin.
[Linking to Professor Plum’s post I commented] That’s a well thought out post and one of the best I have ever seen on Bitcoin.
That does not mean he is right, but so far the thesis fits.
Ten Key Points
The bitcoin “Store of Value” trade has fundamentally broken in two. Unlike gold, which is mined with energy, but then remains “gold” regardless of how much mining energy is expended, bitcoin requires continual energy expenditure to maintain the bitcoin network.
Maintaining a digital ledger requires a constant injection of ordered energy.
The miners are currently doing the same amount of work for 27% less revenue. They have billions in sunk capex, and as long as bitcoin remains above the marginal cash cost of mining (~$85K), they will keep mining. This, in itself, is nothing new. It has always been the case that mining has periods of unprofitability.
The difference this time is that bitcoin miners are no longer using “surplus” energy.
AI datacenters pay 3-4x the revenue per kilowatt as bitcoin mining — and the miners are switching.
Another “halving” in 2028 will reduce revenue per hash by 50% unless the bitcoin price increases by 100%.
The “Passive Bid” Has Diminished. For two years, the ETF complex provided a mindless, price-agnostic bid for bitcoin. That tap has slowed radically, and now bitcoin must find a new untapped bid.
Absent endogenous cash flows (e.g. earnings, transaction fee share, dividends), bitcoin has no stabilizing feedback loop—only reflexive ones. Further declines do not summon value buyers; they merely test the resilience of belief.
Bitcoin requires a massive, continuous calorie burn (electricity) just to prevent the network from collapsing. As energy prices rise (thanks to AI and the exhaustion of the 2010s surplus), the cost to maintain your “digital gold” rises.
Gold is chemically inert. It sits in a vault. Its maintenance cost is effectively zero and largely unaffected by existing value.
Halving – Point Number 6
The last Bitcoin halving occurred on April 19, 2024, reducing the block reward for miners from 6.25 BTC to 3.125 BTC, marking the fourth halving event in Bitcoin’s history and decreasing the supply of new bitcoins
The next Bitcoin halving is projected for mid-2028, around April 17-29, when the block reward for miners will be cut from 3.125 BTC to 1.5625 BTC.
The next halving will reduce revenue per hash by 50% unless the bitcoin price increases by 100 percent.
The Bitcoin belief is twofold (price follows the hash rate, and the hash rate always goes up).
That’s not always true. But over the long haul, it’s generally been true. Regardless, in an energy sensitive environment with demand coming from AI, halving isn’t what it used to be.
“Meanwhile, if miners have better things to do with their energy than mine Bitcoin, the hash rate only has one way to go.“
In the face of a profitability crisis, industrial-scale bitcoin miners are transforming their data centers into AI factories.
The recent decline in the price of bitcoin to around $85,000—a 30 percent drop from its 2025 peak—has created a perfect storm that threatens the profitability of all but the most cost-efficient mines.
“The economics are terrible today,” says Charles Chong, VP of strategy at the crypto advisory firm BlockSpaceForce and former director of strategy at the bitcoin mining company Foundry. “If I buy a bitcoin mining machine today, I don’t know if I can make the money back.”
A dramatic drop in bitcoin mining activity could increase the feasibility of what’s known as a 51 percent attack, whereby somebody hijacks bitcoin transactions by controlling the majority of the computing power directed at the network. For now, such an attack remains prohibitively expensive. But as the reward for bitcoin mining continues to fall every four years, the fear is that mining will no longer be economical. “It’s definitely a threat—and a serious one,” claims Chong, the BlockSpaceForce executive. “But how soon is an open question.”
Others are betting that bitcoin mining will become the sole preserve of sovereign states—like Bhutan, El Salvador, and the US—that cannot abide any threat to the value of the national bitcoin stockpiles they have accumulated. “Maybe people will mine at a loss,” says Demirors, “because it’s a matter of national security.”
Mother of All Crypto Winters
Repeating my March warning, If a big top is in, this could just be wave 1 down. By that, I mean waves 1-5 form a bigger wave 1.
Note the large 1 next to the 5 on my lead chart.
If that pattern plays out, a larger wave 2 would start in the 40,000 to 50,000 range (or lower because wave 5s can extend).
A larger wave 3 down would then start. That would be the mother of all crypto winters.
Summation
Little has changed either technically or fundamentally since my last Bitcoin post on March 14.
Bitcoin is now in wave 5 down. In March, I was discussing wave 4 up, expecting wave 5 we are now clearly in.
The symmetrical wave 4 triangle briefly broke out to much Bitcoin cheering but that collapsed in wave 5.
Fundamentally, I side with Professor Plum. Technically, the pattern is playing out as noted in March.
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Bitcoin is a good barometer of global liquidity and there are a few things impacting liquidity and people’s pocket book.
Oil – The high cost of oil is a drain for everyone, oil is needed and bitcoin is not so if you need one and not the other you exchange it.
Bond yields – Have been rising across the world, the 20 & 30 pay 5% interest which is better than no interest and it’s backed by the US taxpayer.
War – Disruption of supply chains due to war are driving up costs for helium, fertilizer, etc. Again, if you have to sell something, sell bitcoin buy those goods or buy oil.
AI – Lots of money in AI, most of those stocks are up over 100% in the last year, genuine bubble territory but that won’t stop speculators, investors and gamblers from taking their chances.
On that last one, Anthropic just filed for IPO and there is an expectation that $1.5 trillion will be changing hands. Do you know where that $1.5 trillion will come from? It will come from liquidating bitcoin, non-AI tech stocks and every other type of stock and maybe gold and silver or other commodities.
I fully expect the market to go haywire as soon as that IPO hits the market. I won’t touch it for at least 18 months or it starts trading options, whichever comes first.
Caffinated Capital had a great write up on Space X but applies to Anthropic as well.
You don’t understand the point of it and I suspect TA in general.
The key benefit is to buy at support or sell at resistance where cost of getting out is minimized.
But the patterns do play out – and one of the reasons is people follow then so they become self-reinforcing
The long-term gold cup-and-handle was a beauty
But in bull markets, declining patterns mostly fail. And in down markets, bull triggers usually fail.
So in that context, yes, there are a lot of errors.
Six000MileYear
1 hour ago
I completely disagree with the E-wave count. Wave 4 overlaps wave 2, and this does not look like a rare leading diagonal. Wave 4 is disproportional (time and bounce%) with respect to Wave 2. The channel for a motive wave is lacking.
What I think is a better wave count is the start of the second half of a double zigzag, and ABC corrective wave. The first zigzag (Wave A) ran from October 2025 to February 2026. Then a 3.5 month consolidation (Wave B) that burned a lot of premium off put options.
The 200 day moving average repelled 2 weeks of challenges in the 1st half of May, and then the 20 day moving average began guiding Bitcoin lower (wave a of Wave C). I believe there will be another level of support ( wave b of large Wave C) before the final move of the correction (wave c of Wave C) takes place.
I’ve been reading Mish for so long that I remember`when he said he was sure bitcoin would go to zero. Maybe it still will but I don’t put much confidence in his bitcoin forecasts
Here’s the real deal. He doesn’t know, I don’t know, and no one else does either.
However, I do know that it’s extremely unlikely that Bitcoin will ever be money for reasons stated.
Thus, Bitcoin will remain a digital commodity whose primary purpose is speculation.
If you are looking for hype idiocy, here you go: ‘Bitcoin to Hit $1 Million in Days,’ Says Samson Mow
For now, Bitcoin will survive as a speculative vehicle (perhaps at the mercy of Blackrock and option betters) unless and until governments are ever fearful of it.
Satoshi Nakamoto set out to create the GreatestMoneyEverTM. Instead, he created the greatest tool for speculative mania in history. The BitcoinTribeTM does not understand the difference.
Bitcoin is a good barometer of global liquidity and there are a few things impacting liquidity and people’s pocket book.
Oil – The high cost of oil is a drain for everyone, oil is needed and bitcoin is not so if you need one and not the other you exchange it.
Bond yields – Have been rising across the world, the 20 & 30 pay 5% interest which is better than no interest and it’s backed by the US taxpayer.
War – Disruption of supply chains due to war are driving up costs for helium, fertilizer, etc. Again, if you have to sell something, sell bitcoin buy those goods or buy oil.
AI – Lots of money in AI, most of those stocks are up over 100% in the last year, genuine bubble territory but that won’t stop speculators, investors and gamblers from taking their chances.
On that last one, Anthropic just filed for IPO and there is an expectation that $1.5 trillion will be changing hands. Do you know where that $1.5 trillion will come from? It will come from liquidating bitcoin, non-AI tech stocks and every other type of stock and maybe gold and silver or other commodities.
I fully expect the market to go haywire as soon as that IPO hits the market. I won’t touch it for at least 18 months or it starts trading options, whichever comes first.
Caffinated Capital had a great write up on Space X but applies to Anthropic as well.
https://caffeinatedcaptial.substack.com/p/the-daily-morning-brew-the-letter
Tulip bulbs are a good barometer of global liquidity and there are a few things impacting liquidity and people’s pocket book.
EW has as much chance of being accurate as darts. As far as tech analysis goes,its far down the list, and that’s not because I don’t understand it.
You don’t understand the point of it and I suspect TA in general.
The key benefit is to buy at support or sell at resistance where cost of getting out is minimized.
But the patterns do play out – and one of the reasons is people follow then so they become self-reinforcing
The long-term gold cup-and-handle was a beauty
But in bull markets, declining patterns mostly fail. And in down markets, bull triggers usually fail.
So in that context, yes, there are a lot of errors.
I completely disagree with the E-wave count. Wave 4 overlaps wave 2, and this does not look like a rare leading diagonal. Wave 4 is disproportional (time and bounce%) with respect to Wave 2. The channel for a motive wave is lacking.
What I think is a better wave count is the start of the second half of a double zigzag, and ABC corrective wave. The first zigzag (Wave A) ran from October 2025 to February 2026. Then a 3.5 month consolidation (Wave B) that burned a lot of premium off put options.
The 200 day moving average repelled 2 weeks of challenges in the 1st half of May, and then the 20 day moving average began guiding Bitcoin lower (wave a of Wave C). I believe there will be another level of support ( wave b of large Wave C) before the final move of the correction (wave c of Wave C) takes place.
You do not understand overlap.
Wave 4 is not higher than wave 2.
By definition wave 4 would extend a bit into wave 3.
Apparently Dotard Prime is holed up at the White House yammering to himself.
US says it fired missile at Iran-bound oil tanker
https://www.bbc.com/news/articles/c5yx135yg53o
That’d be Tanker #6 fired upon / disabled.
I’ve been reading Mish for so long that I remember`when he said he was sure bitcoin would go to zero. Maybe it still will but I don’t put much confidence in his bitcoin forecasts
I have not stated Bitcoin was headed to zero since 2018.
And I don’t forecast zero now.
So you are not much of a reader.
Jan 16 2024: A Maxi Debate: What is Bitcoin and What is Money?
https://mishtalk.com/economics/a-maxi-debate-what-is-bitcoin-and-what-is-money/
The Real Deal
Here’s the real deal. He doesn’t know, I don’t know, and no one else does either.
However, I do know that it’s extremely unlikely that Bitcoin will ever be money for reasons stated.
Thus, Bitcoin will remain a digital commodity whose primary purpose is speculation.
If you are looking for hype idiocy, here you go: ‘Bitcoin to Hit $1 Million in Days,’ Says Samson Mow
For now, Bitcoin will survive as a speculative vehicle (perhaps at the mercy of Blackrock and option betters) unless and until governments are ever fearful of it.
Satoshi Nakamoto set out to create the GreatestMoneyEverTM. Instead, he created the greatest tool for speculative mania in history. The BitcoinTribeTM does not understand the difference.
Why Would Someone Publicly Burn $8 Million Worth of Bitcoin? Theories Are Flying
https://gizmodo.com/why-would-someone-publicly-burn-8-million-worth-of-bitcoin-theories-are-flying-2000764705
Bitcoin (or Sh@@coin) is fiat money for geeks and trendies.
what ever Trump touches turns S##t
good observation
It’s called the Fecal Touch.