Bitcoin as a Macro Signal
Bitcoin has been stuck in a wide range for months, particularly after the October drop that pulled it back from all-time highs into the 80k–95k zone. What stands out is that after making a low near 80k a few weeks ago, Bitcoin hasn’t broken lower. Instead, it has been forming higher lows and higher highs, which is bullish from a trend perspective.
While there’s no obvious technical reason for Bitcoin to rally right now, especially with equities pulling back from highs, Bitcoin often acts as a forward indicator for risk assets. A break back above the 95k range, particularly after the roughly 3k rally following stabilization in Venezuela, raises the probability that equities could move to new highs as well. Bitcoin doesn’t need to make new highs for stocks to do so, and history has shown that clearly.
Commodities, Seasonality, and Early-Year Signals
From a broader asset perspective, gold, silver, and other metals have seen powerful rallies. As long as those moves stabilize rather than unwind, capital can rotate back into equities and support higher prices.
We also just experienced something rare: no Santa rally, marking the first time in history we’ve had three consecutive years without one. On its own, that doesn’t mean much. But the first five trading days of the year often provide useful insight into momentum. If markets show strength through the first part of the week, it could set the tone for a constructive year.
Looking back to 2025, January weakness led to February highs, followed by a sharp 23% drawdown into April. We don’t expect that exact pattern to repeat. The current administration has eased off policies that pressured markets earlier and appears more focused on rate cuts and potential changes in Fed leadership.
The 2026 Outlook and Staying Invested
Putting it all together, we are optimistic about 2026, but also realistic. A 10–15% correction that gets bought quickly feels very possible, maybe sometime in April or May. That’s a rough estimate, but markets today move fast. Information is absorbed instantly, price adjusts quickly, and algorithms step in aggressively.
We believe the era of 50-70% drawdowns in the S&P 500 is largely behind us. Over the last 100 years, markets have compounded at nearly 10% annually, and that trend should continue as long as technology advances. Technology grows exponentially, not linearly, which supports higher long-term returns alongside faster, sharper pullbacks.
This is simply how the system is built. Too many interests are tied to market stability for prolonged collapses to persist. That’s why we stay fully invested. If you focus on high-quality businesses with real cash flow, shareholder returns, and strong secular tailwinds, long-term outcomes tend to take care of themselves.
There’s still plenty of opportunity in the short term as well, and we plan to stay active where it makes sense. Thanks for reading. For more updates throughout the week, follow @WOLF_Financial
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
