Weekly Update: The Setup No One Is Talking About
Good evening, and welcome to this week’s edition. Ross is on vacation with his family this week, so I am stepping in to cover the update. And this week, I want to talk about Bitcoin.
Now I know, you may be curious why I want to go over BTCUSD when it’s been dead for months, well let me explain below.
Bitcoin has been left for dead. The coin sits around $78,000 as I write this, roughly 38% below the $126,272 all-time high it printed back on October 6, 2025. “IBIT”, BlackRock’s spot Bitcoin ETF, tells the same story.
Shares closed today at $44.02, a vast 38.71% below the all-time-high that it made on that same October day.
Think about that for a second. The QQQ, SPY, and IWM are all printing new all-time highs while Bitcoin is still down 38%.
This kind of divergence does not last forever and usually ends one of two ways.
So here is where we currently stand, and why I think this may be setting up for a multi month rally.
First, drawdowns of this size are not new territory for Bitcoin. They are the norm. A 50% pullback from the highs would be catastrophic for equities. In BTC, it is just another day.
Think about the history here. The peak-to-trough drawdown from April 2021 to June 2021 was 55%, and that happened in the middle of a bull market. The asset went on to double after.
The 2024 cycle saw multiple peak-to-trough pullbacks averaging around 32%. And if you want to see what real pain looks like, the 2018 cycle witnessed an 82% drop before Bitcoin ultimately went on to run over 1,000%.
I say all this to put the recent price action into perspective. If you zoom out and look at every major Bitcoin rally in history, every single one was preceded by a drawdown that looked exactly like the one we are living through right now.
Bitcoin is used to these steep drops. It tends to recover.
Second, the price action is starting to whisper. Look at a daily chart of BTCUSD. We have a clear series of higher lows stretching back to February 2026. Price has reclaimed every short and medium term moving average on the board and is now pressing toward the 200-day simple moving average around $85,000.
This structure has been in place for over two months, and it is trending higher, not rolling over. As long as BTC holds above the previous swing low at $65,000, the bullish case stays intact.
Third, and this is the part most people miss. Bitcoin has spent essentially three months doing nothing but frustrating everyone who owns it. That is how every multi-month rally in Bitcoin’s history has started. Not with a bang, but with a grinding consolidation that wears out the last of the believers.
Here is how I am thinking about expressing this view.
There are several clean ways to get positioned depending on your risk tolerance. You can buy spot Bitcoin directly through any major exchange if you want the underlying asset.
You can trade the BTCUSD CFD if you want leverage and flexibility without custody. Or you can buy IBIT, or any spot Bitcoin ETF, inside of a brokerage or retirement account.
For the equity expression, IBIT at the current price gives you direct correlated exposure without needing a crypto wallet or a separate exchange account.
A stop below $37 keeps risk aligned with the previous swing low and gives the trade room to breathe if BTC continues to range or whipsaw before the next leg higher.
For a more leveraged play, the IBIT Jan16 2027 $50 call currently trades around $5.10. If Bitcoin runs to $110,000 by year end, which would still be below the prior all-time high, IBIT should trade near $63, and that call should be worth $13, roughly a 100% return on the premium.
If BTC reclaims the highs, the numbers get substantially better.
As always, this is not a sure thing. Bitcoin could break the April lows, flush to $65,000, and invalidate everything I just wrote. Crypto does that. That is why the structure matters. A defined stop below $65,000 on the CFD, or below $37 on IBIT, keeps the loss contained.
But when you have a clean series of higher lows, a 52% peak-to-trough drawdown that has already done the work of flushing weak hands, and a chart now trending higher off the base, you do not wait for the all-clear. You stalk the setup, define your risk, and get positioned before the crowd remembers Bitcoin exists.
The selling feels heavy because it always does at these levels. That is the point.
Bitcoin is used to these steep drops. It tends to recover.
Best wishes for your trading,
Jean