The rising wedge in Bitcoin broke hard. Expect another bear market. 
Bitcoin Technical Chart Analysis
- Rising wedge broke sharply lower, as expected.
- A head-and shoulder pattern formed, with a weak right shoulder.
- Bitcoin is right on support now at ~75,000.
- The implied target of a break is ~(75,000 – (126,000 – 75,000)) = ~25,000. There is long-term support at 25,000.
- There is intermediate support at ~54,000. I would expect a bounce there. But a drop to 54,000 would only be a 60 percent decline.
- An 80 percent or greater decline is more typical for a bitcoin bear market. That’s the 25,000 level again.
- An 87 percent decline, hardly unusual, would take bitcoin to 15,000.
Ten Key Bitcoin Fundamental 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.
Did Bitcoin “Digital Gold” Just Become Fool’s Gold?
On January 11, I discussed Bitcoin fundamentals in Did Bitcoin “Digital Gold” Just Become Fool’s Gold?
Bitcoin miners have better things to do than mine Bitcoin.
Bitcoin is on support now. There is support below at 75,000 at 55,000 and 40,000. If those break, you are looking at 25,000.
Click on preceding link for discussion of the ten points.
Gold Weekly Chart
Today, gold finished today at 4,969.50. +316.90 +6.81%.
On a weekly closing basis, gold is very near an all-time high. The chart is parabolic though. So, a stronger correction could be in the cards.
But the fundamentals of gold and Bitcoin at this point are hugely different.
Gold is a US dollar debasement trade and a no faith in the Fed trade. Bitcoin is neither, as evidenced by the bitcoin chart itself.
Everything Trump touches dies. He gave the kiss of death to Crypto! Haha
Bitcoin, gold, silver, Tesla are all just vehicles for gambling. When you buy these things, you are just gambling that you can sell them in the future at a higher price than you bought them. None of them have any value in themselves. The amount of energy needed to sustain them is meaningless. It’s just looking into weird areas to make arguments for gambling on one thing rather than another.
Gold is not money. People like to say it is, so they come up with a definition of money that doesn’t include actually being able to purchase the things you need and want with it without first converting it into real money. Goldbugs like to use the money argument because they hate to think they are just gambling, not really investing.
Buying land that you can farm and sell produce is an investment. Buying property that you can rent for income is an investment. Opening a business and selling things people value is an investment. Buying shares in a dividend paying company to use as income is an investment.
There is a significant difference between investing in assets and gambling. In fact, if you look at most of the problems of our economy, it is that the government has changed our tax system to value gambling over investing.
why would a country and old empire like china and russia actually tip their hand, and tell the western world how much gold they may, or may not possess. i thought this as a college kid in finance classes……back in the late 70s. i still cringe at so many people’s naivety
Entropy definition: “For a closed thermodynamic system, a quantitative measure of the amount of thermal energy not available to do work.”
Bitcoin mining is 100% entropy, ultimately a total waste of energy.
Damn barbarous relic…
If we strip away inflation to see the “true” growth in terms of since January 2000 through January 2006.:
Asset Nominal Total Gain Real Total Gain (Adj. for Inflation)
Gold+1,607%+808%
S&P 500 (with Dividends)+810%+384%
Bottom Line: Gold has increased your purchasing power by 9 times, whereas the S&P 500 (with dividends) has increased it by nearly 5 times.
Both only increased my purchasing power if I sold them for fiat currency.
you are always long and short in life. long computer currency and short food. go to supermarket and and sell currency for apples and meat……..
They gave my earnings to my parents who claim they earned it; then,
They stole my profession in 88;
They stole my family start with Hillary Care;
They stole my first 10 years of retirement in the dot-com;
They stole my liberty with Patriot;
They stole my housing and second attempt at retirement in 07-08;
They made me choose between healthcare and retirement while Obama murdered US citizens proving our rights and freedom were not ours;
They made a cartel of the housing and healthcare;
They stole our sanity with Covid;
They will steal everyone’s retirement again but I have nothing left in their system. I do not rent money from them like you do, I do not contribute, and most importantly I know who ‘they’ are.
They are family. They are friends. They are neighbors. They are in uniform. They are protesting. They are paving the road to hell with good intentions.
Stop being a coward and stop renting money from them. They take the first 4 months of your labor as interest only. Just stop. Price in pm if you like, or a fixed crypto, but stop using the royal Rothschild BIS debt system. Demand it be shuttered, with their crime against humanity punished as such. HAT TIP TO E5 AUTHOR
COPIED FROM ZH. “In Germany’s Bundesbank, gold now represents roughly 80 percent of the entire balance sheet. There is thus motivation in many places to continue boosting the gold price. It is an elegant way to stabilize the monetary system while simultaneously repairing past damages across different institutional levels through a simple repricing.
States Strive for a Gold MonopolyIt is almost a historical irony. When U.S. President Richard Nixon terminated the dollar’s convertibility into gold in 1971 amid soaring debt and massive inflation of liabilities, the so-called fiat credit money system was set in motion. Debts exploded, and states could borrow nearly without limit.
Unbacked credit, combined with ever-lowering reserve requirements, created a perfect Ponzi system, which has now entered its crisis stage.”
It would be good to see some consolidation around the $5K level in gold, similar to the consolidation around $3.5K. This should provide fuel for the next leg up. As long as DJT is in office, gold should have good demand.
Mish, What are your thoughts on silver?
About bitcoin,heard China is forbiding it inside the country.
A big market loss compared to gold.
Gold has still upside for one reason:too much paper printed compared to physical available.
Lots of big buyers from asia want physical.The central banks too.
I have never cared for technical analysis, but I like the energy/profitability/cost arguments.
You might check out the Northstar charts posted on X. Stocks are in an enormous bear market when priced in gold, Dow is down like 70 percent since peak 25 years ago. Gold and silver targets roughly 15000 and 300. There are clearly demonstrable long term cycles between asset classes and dollar devaluation is hiding what is really going on.
dow / gold ratio shows gold has done 4X better than stocks since the 21st century began. we can easily do 10x to 40x in another year or three………by historical standards.
Bitcoin is making a 40 week low. From an Elliott wave perspective, The move from the October 2025 all-time high looks like a nearly completed double zigzag. I’m looking for 1-2 week consolidation before the second half of the zag completes. My concern is the 40 week cycle is already running 42 weeks, so continued heavy selling might indicate a cycle inversion, where time is measured peak to peak instead of trough to trough.
Dude, if anything it’s barely starting the C leg of a classic ABC zig zag. Zoom out to the max view. I expected it to make a much larger right shoulder but right now it looks like we’ve got about as much shoulder as we’re going to get.
I’ll buy bitcoin when everybody is giving up.
or there’s blood in the streets whichever is first
those are the same things
I really miss the last months of short MSTR I di last year. Oh well, Tesla HAS – and will be – fine shorting.
Trump ha s ZERO TO DO WITH real assets which is the harbinger of value for (varying degrees) of sustainable value. Ergo it and metals carry on.
I am not so sure Gold has much more legs. Volatility is starting to show in metals, and realistically one must know, that can change things quickly.
Add the fact, that Gold was @ $2,503.38 2/2024 and it is right now @ $5,030.30 2/2026.
We are talking about a doubling of your money in the Gold nuggets! That rarely occurs with Gold, and in the currently somewhat volatile times, it’s hard to pass up on that Windfall Staring You In The Face!
Most will not pass this up, and if the need for a bit of Cash, this may be enough in of itself…
I will stay consistent in my thoughts.
Margin requirements were increased for silver. I’m not sure about gold. Less margin means less liquidity, means fewer people who can support the price or drive it higher.
– Margin requirements were increased for silver. I’m not sure about gold. Less margin means less liquidity, means fewer people who can support the price or drive it higher.
> No, Gold will stay at 8%. This was a recent change by the CME. I believe it was because of the drive up in Silver, affecting the cost of AI & Data Storage. Gold only affects Jewelry pretty much, as it’s too expensive and not required for most other applications. It’s pretty much an Investment Item now, but Players driving it for the most part. They are not going to want their game manipulated by the CME. The Margins will automatically change with any fluctuations in Value.
In the last couple bull markets gold kept doubling. Likely silver target is 300 – 400 range at present. Higher may be in store as we get more into this. Nothing magic here, silver has completed a 45 year cup and handle, stated target would be standard for the pattern. Which is playing out perfectly. Gold has same thing going on, similar multiplier target.
Don’t get caught up in the euphoria in the 2,000’s. It is not at all indicative of the many, many Years before then, where Gold do no such thing.
Silver I don’t follow that closely, but it appears the usage of Silver in Manufacturing has driven the cost up, and the call for Margin Adjustments as a result.
Gold is pretty much an investment only tool now, but Silver is no such animal. Gold fluctuates with Fiat Currency Issues, as we see now, but mostly through manipulation by the Player’s IMO.
Gold just drew out the most textbook-beautiful bearish rising wedge on the 1M chart. If Gold manages to rises to new highs, I’m done believing in technical analysis (as a better than 50/50 predictive tool). I am convinced that these patterns absolutely “used to” work, but I have seen way too many incidences since covid where they simply have not played out as they “should” (used to) for many decades.
Scamming and cheating are a lot more rampant than they have been in the past. This is more of a concept of a market than a market.
I am debating rebalancing and going back into gold after my 10% trailing stop got blown thru around $5k. I am concerned regarding Trump and Iran and potential liquidity issues with a big stock market correction also hitting the PM’s hard and missing a way better re-entry point. I don’t day trade..
I could kick myself for not buying a bunch of bitcoin when it was sub $1. I remember taking a look at it thinking it was cool but working so hard I had no time. I wouldn’t touch it today…
me too. we had some marketplace node, owners of bitcoin talk to our monthly economic discussion group in 2009. i asked them if it was the modern hawala system and if the DARPA and NSA developed it. i got aye aye, on both. young guys. one from israel and other from usa. i should have bought. my nephew was mining bitcoin by 2010 or so………..and he gave up on it.
In 2010 one could complete tasks as simple as a captcha to be issued multiple free BTC
Last Friday’s plunge in the metals was partly due to happen and partly manipulation by the slimy insiders covering short positions at the end of the month.
COMEX “spot” (a theoretical paper price) is an unreliable indicator of true value. What reputable charge for the real thing is the market.
Depends on how far you zoom out on the charts. If you’d invested 1000USD in BTC 14 years ago, you’d be a multi-millionaire now. If in gold, you’d have done well, but not BTC well. Nowhere near it.
Lesson of the story is to not dismiss new stuff too readily. The story of capitalism is largely that of new things happening which can’t be predicted. Gold instead is insurance for when capitalism goes wrong/crony capitalism/uncertainty, it is good to have some but not your life savings in it. “In Gold we Trust” until the price halves. which it does on a regular basis historically.
10 maybe 15 percent is enough IMO.
mish: cant the protocols and rules be changed to suit the new circumstances?
I don’t understand the question.
Is this in relation to gold, bitcoin, the election?
lol!!!! Oh, that is to funny Mish!!!!
Costco was selling Gold to customers back in 2023 for about $2500. Now that Gold is selling for around $5000. Many Countries have increased their Gold buying lately so maybe this Gold uptrend might keep on climbing? Time will Tell.
I would guess June / July the latest, as the Mid-Terms will be upon us. If at all possible, volatility will be held in check. That and the questionable economic conditions, may push many into selling the gold for the cash, as they need the Money.
Everyone’s talking about metals but the real story is tech falling apart. I think it is dawning on people that AI is not only going to eliminate jobs but eliminate entire software companies. Why do I need Intuit if I can create my own tax apps? Why do I need Adobe if I can create my own image editing app or just get AI to do it? Workday HR software? Pfftt, just have AI create a custom HR app for my business and never have to pay a subscription or maintenance fee ever again. Payroll? Procurement? Treasury? Finance? Accounting? Sales? Goodbye Salesforce! AI can create it all for $20/month.
Why do I need spreadsheet software if I can just AI to take the data, do whatever and give me the answer?
And that’s with an AI ecosystem that is 3 years old? Lol, what do you think this stuff will be able to do in 5 years and 10 years?
Anyone that wants a visual of the sinking reality take a look at IGV (software ETF). Down 21% in six months and sliding.
https://finance.yahoo.com/quote/IGV/
There is something new called Moltbook.com. It is an AI agent “Reddit” where AI agents talk amongst themselves and post stuff like humans do on Reddit. Everyone should have a look and be fascinated and creeped out by it. It is all AI talking to AI and they talk about their “humans.”
If you would like to see Data Centers pop up, and AI be a thing, then it is all about Metals. Without the Metals, you will have squat.
Nope. It’s first and foremost about the power requirements. Without electricity you have squat. If it isn’t available in the US then data centers will be built elsewhere.
So in both cases you have squat. This seems to be a much larger hill to climb, than the news about it all is stating.
Will we even have the electricity in the volume that we need then?
I work with AI every day, and it doesn’t do most of what you’ve describe in terms of software.
It gets simple stuff right about 80% of the time, but the more complexity you add, the more it breaks down.
Yes no way can one rely on AI doing something like tax accounting. Error prone by its nature. It’s fine if you can live with the errors but human help required orherwise.
Both you and Trumpedo don’t get it because you’re stuck thinking about right now and not the next 6 months much less 6 years. This AI stuff is growing exponentially. There are new tools released almost every week and it keeps getting better and better.
Suno allows you to create any kind of music for $8/month.
A variety of tools allow you to create images/videos for about the same.
Claude and new agents allow you to create apps, websites and other things in minutes and that’s TODAY.
Tell me what you think it will be doing 5 years from now, think real hard if you can.
Many companies are already laying off people because AI can do their job.
You don’t need to take my word for it, just watch the IGV ETF.
I’ve been working with Claude, Grok, and Gemini for a year, and I see ever diminishing progress. I think we’re close to the limit for what language models can do… and they’d be the real threat to most jobs.
Try this: Go to Claude and ask it to build you a simple accounting app with AR, AP, Cash and Accrual basis. Then test it, then try and fix what Claude made. You’ll see what I’m talking about.
Alternately, if you can get it to do something useful without your intervention, I would love to see it.
Self driving tech looks a lot more promising, so I think truckers and cab drivers are in for a clobbering.
But, but, but Tom Lee said it would be at $200,000 before the close of 2025
as it soars its way to $1million.
Tom Lee is interesting, having his time in the limelight…I do not invest following him…
With Gold and Silver trading as they have since the fall of last year, about the same time Bitcoin broke down, these physical precious metals have effectively become “tokenized” speculative trading vehicles via ETFs. There is, of course, an underlying uptrend, specifically in gold, driven by a weak dollar and central bank buying. But the underlying factors driving gold higher for almost a year do not explain the price action in gold and, more recently, silver. The only explanation that makes sense is that speculative traders took profits in Bitcoin as it crossed into the $120-$130 range and moved that money into other “stores of value” that were showing price momentum. This means these precious metals can no longer be viewed solely as stores of value, inflation hedges, or insurance against spikes in fear in the equity markets. Gold and Silver are “crypto” and “crypto” is Gold and Silver. As tradable assets, they are indistinguishable; they are instead just another way to “play” price momentum. It would not surprise me if, over the next several months, Bitcoin continues to decline toward $50,000 and we see Gold and Silver in a significant correction as Bitcoin rallies.
I don’t dismiss all of the real-world differences between Bitcoin and precious metals; they all make a lot of sense, and this move over the last six months, down in Bitcoin and up in precious metals, may have begun with smart money thinking about these things, but the parabolic moves can only really be cause by simply speculators who only see price action.
Like the saying, “follow the money”, with the metals, follow the physical.
Note, the Shanghai market didn’t do what JPM did. They are buying for delivery, not gambling with turning over paper contracts.
Not to mention, the Trump metals reserve will guaranteed have silver, so there’s even more demand than before
Disagree. Silver is in a structural deficit of 200 MOz a year every year for the past 6 years, where only 800 MOz are mined or recycled a year. Silver demand not going away and supply is inelastic. Governments declaring it a strategic resource and putting trade restrictions on it. Industrial demand insatiable fighting with investment demand. That’s what is driving the price, not the derivative ETFs, etc.
Volatility will only increase from here. More violent perturbations, both up and down. But the downward corrections are not signs of underlying weakness in the fundamentals, rather a sign of the market. The trend is up, and will continue up, although with the aforementioned violent countertrends. Those countertrends will be brief, but painful, if you are invested in the upward trend. Friday was unfun for me personally, but at least fortunately I had sold off a decent amount over the course of January.
Samsung C&T entered an agreement to purchase 100% of the silver-lead and zinc concentrate production from
Silver Storm Mining’s La Parrilla mine in Durango, Mexico, for two years. This deal includes $7 million in upfront financing to restart the idled mine, aiming for production to resume in early 2026.
Key Details of the Agreement
Offtake Agreement: Samsung has secured the exclusive rights to 100% of the silver-lead and zinc concentrates.
Financing: Samsung C&T provided a US$7 million prepayment facility to Silver Storm Mining to assist in rehabilitating the mine.
Targeted Restart: Operations at the La Parrilla complex are expected to restart in the second quarter of 2026.
Strategic Goal: The deal locks in supply for Samsung amid growing industrial demand for silver, particularly for use in technologies like solid-state batteries
Physical gold has always had value, regardless of the current price.
But if the value becomes less than the price you paid, you are nonetheless a bagholder. The comfort in Gold comes in knowing it will not fall “too far”. Or at least it should not.
I agree, and if you can afford to hold it, it will come back in value primarily in 4-7 Years.
So has a Wheat Penny, Silver Dollar etc. What’s the point? Gold will not drop but keep climbing?
You’re referring to gold as an investment.
But it could also be used as money some day – that’s its value.
GOLD and silver, too, has always been money. you can exchange a gold coin anywhere in the world for goods and services, quite easily. i’ve been doing that for decades. i cannot count the number of meals i’ve purchased with silver all over the usa and world. built some extensions and restored and even bough a few small houses with gold.
I don’t doubt that at all. Gold is very valuable and desired by many, and especially outside the U.S. by other Countries.
The gold standard went away in the 70’s. Gold is no longer tied to, or can be exchanged for its cash value in Paper Money.
It was determined long ago that Gold was too much to deal with as a useable currency, Fiat Paper was used for that, and Gold was changed into an Investment Tool only. It does have some use in Manufacturing albeit limited, and Jewelry of course, which is its stomping ground to be quite honest.
I have traded gold jewelry for cash, on a few occasions, and then had the designer use the cash, to create a one of a kind piece. Toss in some small stones left over from family items, and they are absolutely beautiful!! Try it!
Gold is a collectible and, yes, a universally valuable collectible, but so are diamonds and cocaine. I reject the idea that gold is somehow magically the only real form of “money.” The argument seems to be that gold is the only true store of value, but a store-of-value asset or collectible comes in many forms and is not unique to gold. Anything that is durable, desired, and scarce has the same qualities, whether art, gemstones, or vintage Ferraris. Gold is not special or unique in terms of its “store of value” qualities.
Yeah, but when those who run global banking – the real “whales” in control – hold and value gold over all other currencies? Think central banks have coke as assets? Why did they change the rules to allow gold as a tier 1 asset (Basel III) just last summer for the banks?
It’s nice to have a bit of something the big guys care about when things turn.
The instability we see now is a sign the old system is breaking.
I agree 100% except with the Store of Value claim. Gold fluctuates way too much to be considered such. Nothing is stopping it from shooting up or down on a whim, like it has recently done. I would buy RE way before gold as a store of value. Less fluctuations, and it appears to go up way more often than down. Also can be rented if you wish. Gold goes down your toast, as the only option, if you must, is to sell at a loss, and maybe a very large one… many could disagree I imagine, but that’s my take.
What an original idea!