The Illusion of Quiet
Macro Turbulence, Stock Market Fractures, and Bitcoin Reality Check
Aloha friends,
Two weeks ago, I wrote about us being in the boring phase. However, looking at the global markets today, one could say we are anywhere but in a boring stage. We are seeing major indices like the S&P 500 and NASDAQ printing lower lows and losing traction week after week.
Last week, in particular, saw a significant sell-off fueled by the Iran conflict and growing insecurity regarding its duration. Markets are struggling to price in the long-term economic impact of this geopolitical instability. While the USA might be hit the least, Europe, the Middle East, and Asia face massive challenges. Recession probabilities have surged, and we face a paradoxical setup: central banks are considering interest rate hikes to combat rising inflation even as economies weaken. With 10-year bond yields rising, the pressure on housing markets and government debt refinancing is becoming immense. This sounds like many things, but boring isn't one of them.
Disclaimer: Views expressed are the author’s personal views and should not be relied upon as investment advice.
Understanding the Drivers
First of all, I am not a geopolitical expert or a war strategist. You will hear many people right now who suddenly know everything: from military objectives to macroeconomics, sailing, and cooking. I don’t pretend to be any of those. My approach remains the same: I look at the data. I analyze the facts we see, compare them to how similar setups played out in the past, and identify where the highest probabilities lie. Having this said, let’s dive in.
Raising Volatility
I mentioned a while ago that we were likely to see rising volatility, and the charts are confirming this.
The VIX reflecting values over 20 typically signals a shift into risk-off mode; we are currently at 26. This reflects the deep-seated insecurity of the markets. However, we must think strategically: heightened volatility and market movements always bring opportunities for those who stay patient.
Where is the Stock Market Heading?
Based on the current trajectory of the conflict, a quick resolution seems unlikely. While a single tweet can cause short-term rallies or dips, the underlying data and historical trends point downward.
The NASDAQ has lost its 50-week Moving Average (green line), global liquidity is trending lower, and the U.S. real estate market is weakening as mortgage rates average above 6.4%. The Fed currently has very little room to maneuver. Historically, mid-term years are challenging for equities. Despite the narrative that Donald Trump wants a great stock market, no single individual can simply wish away a macro downturn.
I expect the NASDAQ to trend toward its 200-week WMA (orange line). This does not mean we have to go fully down until this point. Remember, I am looking at the bigger picture over the coming months. Short-term counter-movements are part of the process, but the trend remains your friend until it ends.
I am expecting some more volatility coming up this week and all is focussed if there is any progress in the conversations about a war ending. Do not get me wrong: a quick ending could bring the markets surging in April. Nevertheless, I do not foresee a strong push over the summer months and see lower prices. What this means for Bitcoin? A falling stock market is likely the final catalyst needed for one last push toward a lower low in Bitcoin.
Bitcoin On-Chain Data
What does the internal data for Bitcoin show us in this macro chaos?
As shown in the data, long-term holders (LTH) are stepping in as buyers again. Does this mean we’ve hit the bottom? Not necessarily. Back in 2022, LTHs started deploying capital early, yet the bear market continued to play out with further downward movement. We are likely seeing a similar pattern now. However, on a long-term scale, these prices represent solid entry points, and seeing buyers in this area is a structurally positive sign.
Looking at the Unrealized Profit/Loss Ratio, it confirms we aren't quite “there” yet. In every previous cycle, we reached the green capitulation area before the true reversal. We still have some room to move into that zone.
The Dashboard: KPI Check-in
The indicators I follow are not yet flashing a definitive bottom signal. Values are slowly trending in that direction, but given the time factor of this bear market and the current macro environment, there is likely more pain to come before the gain.
Final Thoughts
We saw crypto investors struggle to realize the bear market began in late 2025. We are likely seeing that same delayed realization in traditional markets right now. This is a classic psychological bias: it is difficult to change your original investment thesis and realize the market isn’t going in your favored direction.
A famous quote often attributed to Baron Rothschild (and echoed by Warren Buffett’s philosophy) is to buy when there is blood on the streets. This is fundamentally true. I would add that when everyone finally agrees “it is over” or “it will only go higher”, that is the true sign of an end. I have not seen that level of total capitulation yet; neither in Bitcoin nor the stock market.
Portfolio Management
Given the setup, my base case for new lows below $60k remains unchanged. The shorts I opened previously are still active. My overall allocation remains unchanged.
That’s it for today - I hope I could deliver some valuable insights.
Maloha
Stay Humble. Stay Curious. Enjoy the Journey.
Disclaimer: Views expressed are the author’s personal views and should not be relied upon as investment advice.