Netizen Premium | Bitcoin Deep Dive #22

Bitcoin Above $120K: What's Next?

Dollar Breaks, Bitcoin Soars

The Everything Rally we've been calling for since Trump's One Big Beautiful Bill Act passed just shifted into another gear. Bitcoin printed a fresh all-time high at $120,000 this week as the structural drivers we've been highlighting continue to play out exactly as expected. More importantly, the USD finally flipped to BEARISH momentum as EUR, JPY, and GBP all turned BULLISH, confirming our secular dollar-bear thesis that underpins the entire real assets trade. The volatility picture tells the same story: bond volatility (MOVE), equity volatility (VIX), and currency volatility (CVIX) all show BEARISH momentum while S&P 500, gold, and Bitcoin maintain BULLISH momentum. This divergence between falling volatilities and rising asset prices epitomizes the current GOLDILOCKS environment where the economy remains strong and supported by fiscal dominance.

TLDR: Bitcoin's breakout above $120K benefits from a weakening dollar and calm markets, exactly the conditions we need for continued upside.

Equity Markets Flash Warning

While the current market remains RISK-ON, we're seeing clear signs that the easy part of this rally may be nearing exhaustion. Our Goldilocks regime signal strength just hit the 95th percentile of daily observations since 1998, a level that historically marks interim tops rather than continuation signals. Adding to the warning signs, the high beta/low beta and cyclicals/defensives ratios breaking out to fresh highs signal that markets may be ready for a counter-trend reversal. This suggests institutional investors have aggressively crowded into the riskiest factors to chase performance, exposing many late market entrants to reversal risk. All told, we expect broad risk assets to experience temporary exhaustion over the next few weeks as this positioning unwinds, though we're not calling for Bitcoin weakness specifically given its unique role as a macroeconomic asset.

TLDR: Crowded positioning in high-beta stocks suggests a pullback is coming, but Bitcoin's unique value proposition may help it buck the trend.

Why You Should Buy Every Dip

Looking beyond any near-term choppiness, the fundamental drivers behind our Everything Rally thesis are only getting stronger. Trump-era fiscal, regulatory, and trade policies represent an under-appreciated positive growth shock that Wall Street consensus is still catching up to. Adding fuel to the fire, we see rising probability of a dovish Fed pivot through new chair and governor turnover, creating the perfect storm of expansionary fiscal policy meeting accommodative monetary policy. This combination creates ideal conditions for real assets like Bitcoin (and stocks, real estate, etc.) to continue outperforming cash, which loses purchasing power in this financial repression environment. Any near-term pullback in global risk assets should prove temporary and shallow given asymmetrically skewed upside risk from policy tailwinds. As we've been saying: focus on the forest, not the trees. These secular tailwinds remain firmly intact and any dips are buying opportunities.

TLDR: Policy tailwinds and potential Fed dovishness make any dips prime buying opportunities for Bitcoin and real assets.

With Bitcoin riding the Everything Rally to fresh highs, let's examine what our Dynamic Dollar Cost Averaging model and on-chain data reveal about sustainability at these levels: