Capitulation Below, Strength Above: Bitcoin Washes Out as Equities Run Hot
This week’s tape sets up a rare divergence. Equities are running on one of the strongest 2-month rallies in modern history, breadth is broad (equal-weight indexes at new highs), and the macro plumbing — Copper/Gold, Citi earnings revisions, global M2 — all points to continued risk-on through at least mid-summer. Meanwhile, Bitcoin is printing capitulation readings that historically only show up at major cycle lows: 2nd-lowest monthly RSI ever, the largest short-term holder capitulation on record, and Sell-Side Risk Ratio extremes that previously marked the July 2020 and September 2023 bottoms. The core question: does BTC mean-revert toward the macro tape, or decouple from every risk asset simultaneously for the first time in its history?
1. Equities: Strength Begets Strength
Historically rare momentum thrusts pointing to higher prices
S&P 500 (19% 9-Week Gain — 16th Biggest Since 1950)
The S&P 500’s 19% advance over 9 weeks ranks as the 16th biggest 9-week gain since 1950. Charlie Biello notes that the biggest short-term advances have historically been followed by more upside and above-average returns — the classic strength-begets-strength pattern. No explicit hit rate provided in the post.
S&P 500 (16.1% April–May Gain — Second Best Ever)
April and May combined produced a 16.1% gain, the second-best 2-month gain ever (only 2020 surpassed it). After prior >10% 2-month gains, June has never been lower, and the rest of the year added +18.6% on average.
S&P 500 (16.1% 2-Month Gain — Historical Analogs)
Mike Zaccardi flags the analog dates for a 16.1% 2-month S&P 500 gain: February 1975, February 1987, April 2009, May 2020, and May 2026. No forward stats provided, but the prior four were all near the front end of multi-year bull legs.
S&P 500 (Day 100 — Up 9.9% YTD)
At day 100 of the year, the S&P is up 9.9% YTD. In the 22 prior cases where the index was up >9% by day 100, the rest of the year was higher 86.4% of the time (19/22) with an average additional gain of +8.1%.
S&P 500 (7-Week Win Streak >10%)
The last three times the S&P had a 7-week win streak with cumulative gains greater than 10%, stocks were up more than 20% a year later in every instance. Average 12-month return: +15%, 100% positive.
Equal-Weight Indexes (New Highs Across S&P 500, Nasdaq-100, Dow)
Equal-weight versions of the S&P 500, Nasdaq-100, and Dow are all making new highs simultaneously — a breadth confirmation that pushes back on the “narrow leadership” critique. Qualitative framing, no forward stats provided.
Section 1 Summary
Equities are sending an unambiguously bullish higher-timeframe message. Three of these signals come with explicit, high-conviction 12-month stats (the 7-week win streak at 100% positive, day-100 strength at 86.4% positive, and the 2-month gain showing June never lower). Breadth confirmation through equal-weight new highs reduces the “it’s just a few stocks” risk.
2. Bitcoin: Capitulation Cluster at Cycle-Low Extremes
Multiple independent washout readings stacking simultaneously
Bitcoin (Monthly RSI — 2nd Lowest in History)
Bitcoin’s monthly RSI is at its second-lowest reading in history, at levels comparable to the bear-market bottoms of 2015, 2019, and 2022. Analog framing, no quantified hit rate provided, but each prior occurrence marked a multi-year cycle low.
Bitcoin (Largest Short-Term Holder Capitulation in History)
Frank flags the biggest short-term holder capitulation in Bitcoin’s history. STH capitulation events have historically preceded recoveries because forced sellers have already exited. No explicit forward stats provided.
Bitcoin (Distance Below 200-Week MA — Bottom 10% of History)
Only 10% of days in Bitcoin’s history have seen price this far below the 200-week moving average. The 200W MA has historically acted as a structural valuation floor; readings this stretched have been rare and concentrated near major lows.
Bitcoin (Sell-Side Risk Ratio at July 2020 / September 2023 Levels)
The Bitcoin Sell-Side Risk Ratio is at levels last seen in July 2020 and September 2023 — both of which marked major lows that preceded substantial multi-quarter rallies. Analog framing, no explicit hit rate.
Bitcoin (Macro Divergence Argument)
Sykodelic argues that for Bitcoin to break to new lows from here, it would have to decouple from a macro backdrop that is uniformly risk-on: business cycle expansion, expanding liquidity, parabolic equities, parabolic small caps, IGV pushing, small-cap financials pushing, Copper/Gold breakout, BTC.D dropping, and BTC/GOLD macro bottoming. The post frames this as a logical argument rather than a quantified signal — Bitcoin has never decoupled this completely from risk assets before.
Bitcoin (Late Bearish Positioning at $60K)
Checkonchain notes that speculators only flipped aggressively bearish after Bitcoin fell to $60k: funding rates went deeply negative, put/call ratios surged, and short positioning exploded. The crowd shorted after the move was already 50% complete — historically a contrarian setup.
Bitcoin ($78K Reclaim — True Market Mean / STH Cost Basis)
Bitcoin has reclaimed $78k, a level aligned with both the True Market Mean and the Short-Term Holder cost basis. Historically, sustained moves above this band have coincided with meaningful improvement in sentiment and market structure. Qualitative framing.
Section 2 Summary
This is the deepest cluster of washout signals Bitcoin has shown in this cycle. Four independent on-chain and technical lenses (monthly RSI, STH capitulation, 200W MA distance, Sell-Side Risk Ratio) all land at extremes typically associated with cycle lows. The primary gap: most of these are analog/positional reads without explicit forward-return statistics. The structural argument from Sykodelic — that BTC would have to break correlation with every risk asset simultaneously — is the strongest qualitative pushback against further downside.
3. Altcoins: Lone Capitulation Signal
One isolated extreme reading
Dogecoin (2-Week RSI Under 40)
Dogecoin’s 2-week RSI has crossed under 40. The only prior occurrences in this regime were March 2020, June 2022, and February 2026 — each of which marked a major local or cycle low.
Section 3 Summary
Altcoins are underrepresented in this week’s signal set, but the one available reading — DOGE’s 2-week RSI extreme — is consistent with the broader Bitcoin capitulation theme. Worth watching for confirmation from OTHERS or broader altcoin breadth readings in coming weeks.
4. Macro & Leading Indicators
Risk-on conditions across the macro plumbing
Copper/Gold Ratio (2W Supertrend Bullish Flip)
The Copper/Gold ratio has flipped bullish on the 2-week Supertrend, with confirmation from a MACD bullish cross and the business cycle reading at 54.0. Sykodelic frames this as a high-beta macro signal where the listed conditions historically align.
US PMI (Citi Earnings Revisions Index — 2-Month Lead)
The US Citi Earnings Revisions Index is at new 52-week highs. It leads PMI by approximately 2 months and shows no signs of rolling over, supporting continued risk-asset strength in the near term.
US PMI (Global M2 YoY — 5-Month Lead)
Global M2 year-over-year growth, which leads PMI by approximately 5 months, remains elevated but shows a slight dip past July 2026. The current reading supports continued risk-on through mid-year, with the first potential headwind appearing later in summer.
S&P 500 / Crude Oil (Oil % Deviation From Trend)
Oil remains below the 50% “danger zone” deviation from trend and has cooled to roughly 25% above trend (down from ~40% the prior month). The data continues to suggest oil is rolling over, which historically supports continued upside in risk assets.
Section 4 Summary
The macro backdrop is uniformly constructive across leading indicators with different lead times: Citi Revisions (2-month lead) and Global M2 (5-month lead) both point to a supportive PMI trajectory through mid-summer. Copper/Gold and cooling crude reinforce the cyclical / risk-on read. The first cautionary inflection is the M2 dip past July, which is worth flagging as the earliest plausible headwind.
Closing Summary
The weight of evidence this week leans heavily bullish on the macro and equity side: three independent S&P 500 stats carry 100% or near-100% positive forward 12-month hit rates, breadth is confirming through equal-weight new highs, and every macro lead indicator is risk-on through at least July. Bitcoin presents the cleanest washout cluster of this cycle — monthly RSI at second-lowest ever, the largest STH capitulation in history, and Sell-Side Risk Ratio at prior cycle-low analog levels. The primary risk is timing and the BTC decoupling thesis: if Bitcoin breaks lower from here despite a uniformly bullish macro tape, it would mark the first time in its history that it has fully detached from risk-on conditions. The base case from the data: mean reversion higher, with the structural and macro signals carrying more statistical weight than the BTC bearish narrative.
Indicator Summary Table
| Instrument | Indicator Name | Insight | Source |
|---|---|---|---|
| Bitcoin | Monthly RSI 2nd lowest in history | Levels comparable to 2015, 2019, 2022 bear lows | Source Link |
| Bitcoin | Largest STH capitulation in history | Biggest short-term holder capitulation on record | Source Link |
| Bitcoin | Distance below 200W MA | Only 10% of days in BTC history have been this stretched below the 200W MA | Source Link |
| Bitcoin | Sell-Side Risk Ratio | At July 2020 / September 2023 analog lows | Source Link |
| Bitcoin | Macro divergence argument | BTC would need to decouple from every risk asset simultaneously | Source Link |
| Bitcoin | Late bearish positioning at $60K | Crowd shorted after -50% drawdown; contrarian setup | Source Link |
| Bitcoin | $78K reclaim — True Market Mean / STH cost basis | Sustained moves above this band historically improve structure | Source Link |
| Copper/Gold Ratio | 2W Supertrend bullish flip | Supertrend flip + MACD cross + business cycle at 54.0 | Source Link |
| Dogecoin | 2-week RSI under 40 | Last seen at March 2020, June 2022, February 2026 lows | Altcoin Screener (chart-only) |
| Equal-Weight Indexes | New highs across S&P 500, Nasdaq-100, Dow | Breadth confirmation across equal-weight benchmarks | Source Link |
| S&P 500 | 19% 9-week gain — 16th biggest since 1950 | Historically followed by above-average returns (no explicit hit rate) | Source Link |
| S&P 500 | 16.1% April–May gain (2nd best ever) | June never lower after prior >10% gains; rest of year +18.6% avg | Source Link |
| S&P 500 | 16.1% 2-month gain analogs | Analog dates: Feb 1975, Feb 1987, Apr 2009, May 2020, May 2026 | Source Link |
| S&P 500 | Day 100 up 9.9% YTD | 86.4% positive rest of year (19/22); +8.1% average additional gain | Source Link |
| S&P 500 | 7-week win streak >10% | 100% positive 12M later; +15% average; prior 3 cases all >+20% | Source Link |
| S&P 500 / Crude Oil | Oil % deviation from trend | ~25% above trend (down from ~40%); still below 50% danger zone | Altcoin Screener (chart-only) |
| US PMI | Citi Earnings Revisions Index (2-month lead) | New 52-week highs; no signs of rolling over | Altcoin Screener (chart-only) |
| US PMI | Global M2 YoY (5-month lead) | Elevated but slight dip past July 2026 | Altcoin Screener (chart-only) |
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 is making a lower low from February but is still above the April 2025 lows for now. I would like to see it reclaim $2700 to confirm any continued upside.
Solana Update
Solana is in a similar situation but instead is in the middle of the range. I want to see it reclaim $120 on the weekly timeframe to flip bullish.
Sui Update
Sui is forming a new low and if it can’t hold above 0.60 then the next level below is around 0.50. I would like to see it get above $1.40 to flip bullish.
Dogecoin Update
Dogecoin is forming a potential bottom with the February lows. I think there’s a strong chance it continues to hold this and I would like to see it reclaim $0.12 to see any bullish continuation. If 0.08 does not hold then it the next level down is around 0.06.
Pepe Update
Pepe has lost the range but is holding above the May 2023 level. This is the last major support level for Pepe.
Altcoin Screener Pro Update: Bitcoin Lags in Gold Season
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