Deep Value Bitcoin, Strong Equity Seasonals, and a Risk-On Regime Flip
This week’s tape is lopsided in an interesting way. On the equity side, midyear seasonals are firmly constructive, with several high-hit-rate patterns pointing to a strong back half of the year. On the crypto side, the signal isn’t scattered but stacked: roughly eight independent valuation lenses all say the same thing, that Bitcoin is sitting in deep-value, cycle-bottom territory by long-run models. Meanwhile a quarterly macro regime signal just flipped risk-on. The core question is whether this cluster marks a genuine bottoming process or a value trap where cheap grinds cheaper, and it’s worth noting the tension baked into the data itself: the one signal that reports both equity and Bitcoin stats shows crypto has been the weaker horse lately, with its only two misses both landing in the current cycle.
1. Equities: Midyear Seasonals Line Up
Strong historical setups with high hit rates into the back half
S&P 500 (5–10% YTD at the Midpoint)
When the S&P 500 is up between 5% and 10% year-to-date at the halfway mark, the rest of the year has historically been strong: 87% positive for the remainder of the year with an average return of +6%. The worst full-year outcome from this setup was exactly flat in 2011, which means a large decline from here would be a genuine outlier.
S&P 500 (Q2 Up 10% or More)
When Q2 finishes up 10% or more, the forward seasonals get even stronger. Q3 has been lower only once and Q4 has never been lower in the sample. The final six months average +11.7% versus a typical +4.9% for the back half of any year, so the historical edge roughly doubles.
S&P 500 (July Seasonality)
July has historically been one of the strongest months of the year for the S&P 500. This is a calendar tailwind rather than a conditional signal, so treat it as supportive context (no forward hit rate or average return provided).
S&P 500 / Bitcoin (6-Week Pattern: Up 2, Down 4)
Altcoin Screener’s 6-week pattern (the S&P up its first two weeks, then down four straight) fired July 2. Since 2011 (n=8), one year later the S&P 500 was 100% positive with +23% average / +18% median, and Bitcoin was 75% positive with +253% average / +153% median. The two Bitcoin misses (April ’22, March ’25) were both recent, a reminder that crypto’s underperformance versus equities lately is real and worth respecting.
Section 1 Summary
The equity backdrop is cleanly constructive. Three of the four entries carry hard forward stats with high hit rates, and the conditional setups (5–10% YTD, Q2 up 10%+) are stronger than the base-rate seasonals. The one caveat sits inside the 6-week pattern: the same signal flags Bitcoin as the more fragile side of the trade, with both of its historical failures occurring in the current cycle.
2. Bitcoin: A Cycle-Bottom Cluster
Multiple independent valuation reads at deep-value extremes
Bitcoin (Deep Value, 4th Time in History)
Per Bitcoin Archive, Bitcoin is in deep-value territory for just the 4th time in history by the Power Law. The prior three instances were the 2015 bear market, the 2020 COVID crash, and the 2022 bear market. This is analog framing rather than a quantified forward return, but the company it keeps is notable.
Bitcoin (Percent Supply in Profit)
Frank notes that Bitcoin’s percent of supply in profit has fallen to cycle-bottom levels, comparable to the Nov 2018–Mar 2019 and Jun 2022–Feb 2023 windows, and now Feb 2026 to today. No forward stats provided; the value is in the analog to prior accumulation bottoms.
Bitcoin (Mean Reversion Model)
Frank also shares a Bitcoin mean-reversion model sitting at cycle-bottom levels. This is a chart-based read with no quantified forward probabilities attached.
Bitcoin (Porkopolis Power Law Quantile)
Frank’s Porkopolis Power Law reads at its lowest quantile since 2015, when Bitcoin traded near $230. The 2–5% quantile band has previously shown up at the bear-market lows of 2016, March 2020, and Q4 2022, and now today. This entry merges two of Frank’s posts covering the same indicator. No forward stats provided.
Bitcoin (Power-Law Standard Deviation)
Giovanni provides the most quantified read here. The long-run fit (price proportional to days^5.67, R² 0.96 on 2010–2026 daily data) puts trend near $135K, making $58K roughly −1.22σ below trend (a factor of ~2.3) and −54% off the $124.8K ATH. Every major bottom has landed between −0.7σ and −1.4σ (mean −1.05σ): 2012 at −1.25σ, 2015 at −1.38σ, 2019 at −0.75σ, 2020 at −0.72σ, 2022 at −1.17σ. The current reading sits right in that band, closest to the 2022 and 2012 lows.
Bitcoin (Production Cost, 2-Week Average)
Per kuntah, Bitcoin’s price has reached the estimated production cost per coin on a 2-week average basis, matching prior cycle lows in late 2018, March 2020, and late 2022. Analog framing without a quantified hit rate.
Bitcoin (Production Cost Tag / Candle Close)
Sykodelic adds important nuance to the production-cost read. Bitcoin has tagged production cost twice in the last five months, and across all history it has tagged production cost in a downtrend 8 times. Two modern-era instances (the 2020 COVID drop) were just wicks. The only time price has ever candle-body closed below production cost in a downtrend was the 2017 bottom, which coincided with Bitcoin’s harshest single-day drop ever and the first weekly RSI oversold reading. This cuts both ways: tagging the level has marked bottoms, but a decisive close below it is historically rare and violent, so it reads as a key level to watch rather than a clean all-clear.
Bitcoin (200WMA Quantile, Checkonchain)
Checkonchain reframes the bottom as a process, not an event. Price-sensitive holders capitulate first, then months of sideways action wear down the remaining conviction. The 200WMA Quantile, which measures where Bitcoin trades relative to its 200-week moving average, sits in the bottom ~10% of all historical observations, a zone only visited in the deepest stages of prior bears. This is a time-pain capitulation read; no forward return stats provided.
Bitcoin (LeveLeledc 3D + 1W Buy Signal)
Altcoin Screener’s LeveLeledc (InSilico) signal fired a “3D + 1W” confluence on BTC (3-day buy July 2, 1-week buy July 5), flagging a first green weekly reversal bar after a flush to fresh multi-week lows. The 3-day version has tagged prior bear lows (Dec ’18, Dec ’19, Jun ’22, Nov ’22, and again Nov ’25 and Feb ’26), but the weekly is the rare one: the last 1-week buy fired in November 2022, the exact bear-market low.
Indicator credit: InSilico (TradingView).
Section 2 Summary
This is the densest part of the newsletter and the readthrough is unambiguous: Bitcoin is statistically cheap by nearly every long-run lens on offer. The cleanest quantified entry is Giovanni’s power-law σ framing, which places the current price squarely in historical bottom territory. The honest caveat is correlation: most of these reads (Power Law, production cost, 200WMA quantile, supply-in-profit) are different windows onto the same underlying “cheap versus trend” observation, so they corroborate each other rather than stack as fully independent signals. Sykodelic’s note is the one that adds genuine tension, marking production cost as a level that has both caught bottoms and, once, broken catastrophically.
3. Macro & Regime: Copper Takes the Lead
A quarterly regime flip toward risk-on
Copper/Gold (Cyclical Rotation Cross)
Altcoin Screener’s Copper/Gold signal tracks whether capital is leaning toward growth (copper, the building metal) or protection (gold, the fear metal), using a Fisher Transform cross on the 3-month chart to flag the exact moment leadership flips. As of the June 30 quarterly close, the indicator flipped to a Cyclical Rotation Cross, the copper-leading, risk-on regime. Historically the higher-beta end of the market, the same neighborhood alts live in, tends to lead in the year that follows. The framework is a rotation rather than a binary buy/sell, and the tell that it inverts on gold is what makes it a reliable read on the actual regime. Full 12-month forward returns across 18 assets are in the Pro breakdown; the shared portion is directional rather than quantified.
Section 3 Summary
One signal, but a meaningful one for context. A fresh flip to the risk-on regime aligns with the constructive equity seasonals and, if the historical pattern holds, favors the higher-beta assets that crypto sits alongside. The quantified 12-month returns live behind the Pro paywall, so the free read is a regime label rather than a hit rate.
Closing Summary
The weight of evidence this week leans constructive, but the two sides of the tape are carrying different burdens of proof. Equities bring hard, high-hit-rate seasonals into a historically strong stretch, backed by a regime flip toward risk-on. Bitcoin brings overwhelming breadth of deep-value signals, though much of that breadth is the same cheap-versus-trend story told through different models. The primary risk is timing and independence: a value cluster tells you the odds favor higher prices over a 6-to-12-month horizon, not that the low is in this week, and Sykodelic’s production-cost note plus the 6-week pattern’s recent Bitcoin misses are the reminders that crypto can still take more time-pain before it resolves.
Indicator Summary Table
| Instrument | Indicator Name | Insight | Source Link |
|---|---|---|---|
| Bitcoin | Deep value, 4th time in history (Power Law) | 4th deep-value reading ever; analogs 2015, 2020, 2022, 2025 (no stats provided) | Source Link |
| Bitcoin | Percent supply in profit | Cycle-bottom levels; analogs Nov ’18–Mar ’19, Jun ’22–Feb ’23, Feb ’26–now (no stats provided) | Source Link |
| Bitcoin | Mean reversion model | At cycle-bottom levels (no stats provided) | Source Link |
| Bitcoin | Porkopolis Power Law quantile | Lowest quantile since 2015 ($230); 2–5% band matches 2016, Mar ’20, Q4 ’22 (no stats provided) | Source Link / Source Link |
| Bitcoin | Power-law standard deviation | −1.22σ below ~$135K trend (R² 0.96); −54% off ATH; prior bottoms −0.7σ to −1.4σ (mean −1.05σ) | Source Link |
| Bitcoin | Production cost, 2-week average | Matches late ’18, Mar ’20, late ’22 lows (no stats provided) | Source Link |
| Bitcoin | Production cost tag / candle close | Tagged 2x in 5mo; only downtrend body-close was 2017 bottom; directionally ambiguous (no stats provided) | Source Link |
| Bitcoin | 200WMA Quantile (Checkonchain) | Bottom ~10% of historical observations; time-pain capitulation (no stats provided) | Source Link |
| Bitcoin | LeveLeledc 3D + 1W buy signal | 1W buy last fired Nov 2022 (exact bear low); 3D tagged Dec ’18/’19, Jun/Nov ’22, Nov ’25, Feb ’26 (no stats provided) | Altcoin Screener |
| Bitcoin | 6-week S&P pattern (BTC read) | 75% positive 1Y; +253% avg / +153% median (n=8); 2 misses Apr ’22, Mar ’25 | Altcoin Screener |
| Copper/Gold | Cyclical Rotation Cross (Fisher Transform) | Flipped risk-on June 30; higher-beta tends to lead following year | Altcoin Screener |
| S&P 500 | 5–10% YTD at midyear | 87% positive rest of year; +6% avg; worst full year flat (2011) | Source Link |
| S&P 500 | Q2 up 10% or more | Rest of year +11.7% avg vs +4.9% typical; Q4 never lower | Source Link |
| S&P 500 | July seasonality | Historically one of the strongest months (no stats provided) | Source Link |
| S&P 500 | 6-week pattern (up 2, down 4) | 100% positive 1Y; +23% avg / +18% median (n=8, since 2011) | Altcoin Screener |
Large Caps
Due to a technical issue with access to the altcoin performance data, I won’t be able to publish it with this newsletter. I will try to resolve it as soon as I can but it might have to wait until the next newsletter. Apologies for any inconvenience.
Bitcoin Update
Bitcoin is still ranging and holding within the green box I have shared the past few months. There’s a chance we hold here and form a double bottom or we sweep lower towards the low 50s. This is what I would consider as a deep value zone to accumulate more Bitcoin and strong altcoins.
Ethereum Update
Ethereum made a lower low since February 2026 but is still above the April 2025 low for now. It is showing early signs of a potential reversal as it breaks higher through this trendline. I would like to see it stay above $2,100 and then $2,400 for there to be more evidence of a bottom.
Solana Update
Solana is more similar to Bitcoin as a potential double bottom formation. It has broken higher through this trendline but in order for there to be more evidence of a bottom, I would like to see it reclaim $88 and then eventually $100.
Sui Update
Sui is similar to Ethereum in hitting a new low since February 2026. I would like to see it reclaim $1.00 and eventually $1.40 for there to be more evidence of a bottom.
Dogecoin Update
Similar to Ethereum and Sui, Dogecoin made a new low relative to its February 2026 low. I would like to see it reclaim $0.10 and then and eventually $0.12 for there to be more evidence of a bottom.
Pepe Update
Pepe is managing to hold above its May 2023 close which is the last major support level I see. If it loses this, then it would be time for a full exit. I would like to see it reclaim its MA200 (blue line) and eventually 0.0000045 for there to be more evidence of a bottom.
Altcoin Screener Pro Update: Copper/Gold (Cyclical Rotation)
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