Right time, right place, right people: Key financial signals suggest crypto is about to enter a major bull run

Last week we discussed why Bitcoin and the rest of the cryptocurrency market are about to embark on a historic bull run. This week I want to highlight some other key signals that are flashing and giving us the green light to start a bull run.

First, a few financial news items appeared in my feed this morning and caught my attention.

Goldman Sachs announced that profits doubled in the second quarter, largely due to Wall Street getting back into trading. We know that this is the headline we expect to see at this stage, as the real estate cycle is 18.6 years long. The big banks making huge profits is key, but more important is how they do it…trading. Trading means risk appetite is increasing, and better yet, it means they need debt to underwrite these deals.

Speaking of deals, another piece of news that caught my attention was that Google is negotiating a record-breaking acquisition of $23 billion. You don't see things like this happening during a market downturn.

So we have the big banks and big tech companies getting out their checkbooks and doing deals at the time we expect.

This behavioral risk and debt creation is directly reflected in the stock market. Last week, we saw a divergence between IWM (Russel 2000 Small Cap) and SMH (Semiconductors) that we haven't seen in a while. IWM surged nearly 5%, while SMH struggled to maintain its status quo and closed lower. The Dow also broke out to new highs after struggling in the face of the SPY and QQQ rebounds in the past few weeks. The Dow may not be a risk signal, but it shows that market breadth is recovering because it is not composed of large technology companies.

These are all signs of a shift to a riskier environment as stocks that have been lagging will start to catch up. You can see this in the stock price breadth indicator. Throughout 2024, this rally had very little breadth. But with last week's big moves and extreme fear in this indicator, it looks like that is about to change and will start to move higher.

Historically, this all lines up perfectly with our current BTC price action.

The green arrows on the weekly BTC chart are the exact points at which the IWM broke out during these cycles. In each cycle, this was a key indicator of a massive risk-on rotation.

However, this won’t happen overnight. As we highlighted in last week’s outlook, BTC ended a 4-week losing streak, but I wouldn’t be surprised if it continues to slowly rise over the next few weeks. Historically, we are entering a very bullish period, but in past cycles, momentum really started in the second half of the third quarter. That’s late August or September. We are still in the first few weeks of this quarter, so be patient.

BTC is doing great on the weekly chart, but keep an eye on the early August window we keep highlighting. This phase of the cycle is known for flash dips that can be very bad, so watch out for that in the coming weeks. As shown by the red arrows in the chart below, each of the flash dips in August during the election cycle could be bad, but at the same time were very short-lived, never lasting more than a week.

Continue to accumulate the strongest projects here, and be prepared if there is a "bottom again". If not, no problem. Just hold and wait patiently. I firmly believe that the best moment is coming, and every day of patience will be worth it.