5/22 - Market Update: The Pullback Happened - What's Next?
I Think The Bears Are Walking Into a Trap. Buckle in, this one is worth it.
Bitcoin - $75,900
Ethereum - $2,070
For the last few weeks, I’ve been saying the move higher felt like temporary relief, not a full reset. Bitcoin bounced hard from the $60k range, Clarity Act headlines gave the market hope, and rumors of the Iran War winding down gave people a reason to get bullish again.
But relief is not resolution. So yes, we were right to not fully trust the rally.
The CLARITY Act still has not passed.
The Iran War is still affecting oil and gas.
The dollar is still strong. (actually going up still - temporarily)
And Main Street (every day people) is still feeling way more pressure than the headlines want to admit.
So let’s break down what I think is happening.
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💠 #1 - The rally was relief not the breakout and the pullback happened.
Bitcoin is now sitting near the lower area of the range we’ve been talking about, around $72k to $75k.
This is the zone I’ve been watching. Not because I think Bitcoin is broken. I don’t. But because the market got ahead of itself.
People saw positive headlines and started acting like the problems were solved. But they weren’t solved. They were just paused, delayed, or maybe slightly improved.
A market can rally on hope, but it eventually has to face the actual facts again.
And the actual facts are simple:
Gas is expensive.
Oil is still a problem.
The Fed is still stuck.
The consumer is getting squeezed.
And the dollar is not giving crypto an easy path higher yet.
So no, I do not think the pain is fully over. But I also do not think this is the start of some giant collapse to $55k per Bitcoin. That is where I think bearish people are making the mistake.
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💠 #2 - Inflation may stay high, but that does not mean the Fed will hike.
This is the part I think a lot of people are missing. If inflation is rising because people are spending too much money, the Fed can raise rates to slow demand.
But if inflation is rising because oil is expensive, shipping is disrupted, gas prices are high, and the Iran War is creating a supply shock, that is different.
The Fed cannot hike more oil into existence.
They just make borrowing harder, credit cards worse, mortgages worse, and businesses more cautious. That is why I do not think a Fed rate hike is the most likely outcome here, even if the market starts pricing that possibility in.
Could inflation stay higher than people want? Yes.
Do I think it stays as high as some reports suggest? Not necessarily.
I take some of the consumer sentiment data with a grain of salt because surveys can be politically skewed, especially depending on who is in office.
But the direction still matters. People are clearly feeling pressure. And you do not need a survey to see that. Just talk to normal people.
People are complaining about gas.
People are complaining about groceries.
People are complaining about flights.
People are skipping trips they usually take every year.
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💠 #3 - Q3 earnings may be where the real pain shows up.
I made this point before, but I want to clean it up.
---- The Big test is Q3 earnings and reports not just the July period. --------
That is when we may start seeing whether higher gas prices, higher travel costs, and higher living expenses are actually changing behavior.
Watch airlines. Watch hotels. Watch restaurants. Watch retail. Watch credit card companies. Watch lower-income consumer brands.
If people start pulling back, companies will feel it. And if companies feel it, guidance starts to cool. And if guidance cools, negative jobs numbers usually follow. That is when the Fed’s problem changes. Right now the Fed is worried about inflation. But if growth weakens, earnings cool, hiring slows, and consumers pull back, the Fed has to start worrying about the economy too. That is where the market can flip fast.
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💠 #4 - This is why I think bears may get trapped.
The easy bearish take right now is:
“Inflation is sticky, the Fed cannot cut, the dollar is strong, gas is high, so Bitcoin must go lower.”
I get the logic. But I think it is too simple.
Because bad economic data is not always bad for Bitcoin. Sometimes bad economic data is the thing that makes the market start pricing in easier money. And Bitcoin usually does not wait for the Fed to actually cut rates. It moves when the market starts believing the next move is easier money, not tighter money.
That is the trap......Bulls got trapped by temporary good news. Now bears may get trapped by temporary bad news.
Here is the sequence I’m watching:
Gas stays expensive → consumers pull back → Q3 earnings guidance weakens → jobs data softens → Fed hike talk fades → rate cut expectations return → dollar cools → Bitcoin rallies before the economy feels better.
That is why I still believe anything under $90k Bitcoin is basically a discount, assuming your time horizon is longer than the next few weeks.
Not because the short term is easy.
It is not.
But because the bigger setup is still there.
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FINAL TAKE:
I do not think this is where you panic. This is where you pay attention. If oil cools, Bitcoin can move fast. If jobs weaken, Bitcoin can move fast. If the Fed hike narrative fades, Bitcoin can move fast. If the dollar starts falling, Bitcoin can move fast.
And if the market starts pricing in rate cuts again, Bitcoin does not need perfect conditions to rally. It just needs liquidity expectations to turn.
Short term, I’m cautious. Medium term, I think bears are too confident. Long term, I still think Bitcoin under $90k is a discount.
DCA. Stay patient. Don’t confuse temporary pain with permanent damage. The next 60-90 days are not about whether crypto is dead or alive. They are about whether the market realizes this oil-driven inflation shock is temporary before everyone else does.
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5/22 - Market Update: The Pullback Happened - What's Next?
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