Short term (within the next 2 to 3 weeks)

Bitcoin has broken above the key descending trend line that has capped price action ever since the $126,000 top in October 2025. We are now seeing a retest of this breakout zone, with Bitcoin hovering around $65,000.

For now we remain tactically bullish. The chart continues to resemble a cup-and-handle formation, with the past few weeks of price action forming the handle. Momentum and volume are also broadly supportive of the breakout narrative.

The key levels to watch over the next 2 to 3 weeks are as follows:

• A daily close above $65,000 (confirmation trigger)

• Resistance around $67,000 (intermediate resistance zone)

• Take-profit target at $74,000 (the measured move for this rally)

• Make-or-break level at $63,000 (ideal stop-loss zone)

• Local capitulation bottom around $58,000-$59,000

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Short term (within the next 2-3 weeks)

Bitcoin has stalled after a period of coiling price action. The near term structure remains bullish and is best described as a cup and handle pattern (or perhaps an awkward right shoulder forming within a larger base).

Here are some key levels that define the current range:

• There is an ascending trend line of higher lows (which sit around $63,000). This line connects multiple pivot lows and acts as the make or break support line for the bullish short term trading setup.

• Horizontal resistance / breakout trigger (which sits at the recent pivot high of around $67,000). A break above this would see us move higher.

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Capitalism is based on one fundamental principle: People can own things, and the ownership is respected. Markets are free to adjust. Prices are the result of people’s preferences and availability of supplies, which indicate scarcity and value. Profits demonstrate that resources are being used in a manner which people enjoy, losses demonstrate the opposite and induce change. The protection of political friends is not provided and new ideas push out old ideas. It is the state’s role to narrow its responsibilities but to fulfil their duties to enforce contracts, protect property and prevent force and fraud. Everything else is left to voluntary cooperation of people. The objective should be to enlarge the entire economy via better ideas and not politics.

Things are different in crony capitalism. Companies prosper for proximity to power. They are rewarded with subsidies, special tax loopholes, laws enacted to their benefit, special licenses, or tacit assurances of success. The key to winning is not necessarily better products or lower prices, it’s lobbying and who you know. Normal mechanism of profit and loss fails: losses are socialised, profits remain private. The state is left with the problem of selecting winners and losers, which is not a problem a true free market of voluntary exchange would have.

This difference is evident when it comes to practice. In an open market, poorly run companies go under and their capital and workers move to better uses. Companies thrive on their customers. Politically connected companies are protected from that pressure in a crony system. Resources remain bound in unproductive locations. Barriers are given in front of new participants. Energy is diverted away from pleasing customers, and towards pleasing officials. Innovation slows. Inequality actually increases the more the value is increased by some people because there are some who get artificial advantages.

There are examples aplenty. For years the American sugar industry enjoyed artificially high prices thanks to quotas and subsidies. Billions more were paid by US consumers annually than the world price, and a small number of producers enjoyed the benefits. For many years, Fannie Mae and Freddie Mac were given a tacit government guarantee which kept them borrowing at lower rates and allowed them to dominate the mortgage market. In 2008, that assurance was put to the test and taxpayers footed the bill. Large financial institutions that were deemed “too big to fail” were supported in ways that shielded their financial institutions from failure, which would have been the fate of any other company.

Recent British experience suggests this too. During the pandemic a special procurement channel was created for medical supplies. There was a significant link between winning contracts and having political connections, with firms having these connections being more likely to secure contracts. Expensive items were bought and not used and a few well-established businesses prospered. The Greensill Capital episode further complicated the picture: it seemed as if access to government-backed finance was linked to former political figures, leading to uncomfortable questions about where the legitimate influence stops and the preferential treatment begins.

All this is not the product of the “capitalist logic. It’s based on the scale and scope of government power. The state that spends the money, bestows the license, issues detailed regulations, or takes a selective action establishes valuable privileges. Rational people will be fighting for those privileges, rather than just for customers. The more the government gets involved in the economy, the more energy is diverted from product and process improvement to politics. That’s not a market failure. It’s the logical outcome of selling political power.

The damage compounds. If people are seeing win-wins that appear to be “rigged”, they lose faith in the markets. Losing that trust leads to greater demands for more intervention, leading to even more opportunity for favouritism. Sometimes “capitalism” is used to denote systems that are not capitalistic. Normal businesses without political patronage have to pay more and be given less opportunities. The economy gradually turns into a “who knows” business.

The first step to the remedy is clear thinking. Real capitalism doesn’t mean no government. It implies limited, predictable and equal government. Rules must be general and known to be in advance, not “made up” for the favourites. Any public contracts should be subject to open competition. Any implicit guarantees should be removed to ensure proper pricing of risk. All a policy has to do is to increase the range of freedom of voluntary decision, or to award benefits based on political affiliation.

Some critics, who attach importance only to the size of large companies, or the wealth of successful entrepreneurs, lose sight of this difference. Serving customers is a size and wealth measure that is consistent with capitalism. Subsidy, rule of thumb, or government bailout are not size nor wealth. Similarly, people who say that all the rich people are born of pure capitalism, fail to understand the nature of the system and its nature.

In most of the rich countries today we live with a combination of the two. The first step in the direction of clear diagnosis is to no longer consider them as the same. Many of the things that are now being touted as “capitalism failing” are precisely what’s happening when the actual system is continually substituted by its political counterpart. Until this difference is maintained in the public eye, the public debate will continue to focus on symptoms and not on causes.

It is not fine.

The process that we are in the midst of in the summer of 2026 is the final stage of the most ill-considered monetary and fiscal experiment that human history has ever known. The scientists have not stopped looking at the results, but rather, the lab is still open.

The Valuation Illusion

Begin with stocks, where the fantasy is most apparent. The S&P 500 is trading at the extreme cyclically adjusted price-to-earnings (CAPE) level of more than 35, and price-to-sales multiples are expanding to exceed the dot-com era, thus entering the top percentile of historical valuations.

The bull case has three legs: Artificial Intelligence, a central bank “soft landing” and American exceptionalism. Together, they represent the most costly grain of truth ever bought by investors.

Yes, AI is driving productivity, but in 18 months it hasn’t been responsible for the $15 trillion surge of market capitalisation of a few tech companies. Macroeconomic benefits of transformative technologies take decades to materialise, and they are available to be bought now at a discount by the markets. Meanwhile, the “soft landing” theory has not accounted for the persistence of service inflation, the squeeze on real wages and the delayed impact on credit market stress from the most aggressive rate-tightening cycle in 40 years. If there is a clash between narrative and reality, repricing will not be orderly.

The Debt Supernova

See beyond stocks and bonds to sovereign balance sheets. Mathematically, global debt has become too high, too much to sustain until the next world war.

The United States has a federal debt of more than $39 trillion with an addition of $2 trillion per year during an economic expansion. Most important, interest payments on U.S. debt are now greater than defence spending. This will add to the existing debt re-up at current interest rates and will only add to the budget pressure.

The rest of the developed world is in a similar bind:

• The UK is a Great Power with modest post-industrial tax revenues.

• Japan uses extreme debt mechanics which are not sustainable by conventional sustainability analysis.

• Systemic deficits are occurring in Europe: France is under EU deficit procedures and Italy is relying on a sort of implicit backing by the European Central Bank.

The official line of chief governments is that this debt can be inflated to extinction without any downside. It cannot.

Geopolitical Fragmentation

At the same time, the Great Power conflict has brought an end to the global economic system. However, defence spending is being pushed up in the midst of war in Europe, escalation in the Middle East, and the cold war over Taiwan, leaving less money for productive investments and making wage inflation a factor in tight labour markets.

Most important of all, the global trade fragmentation is breaking the structural deflationary engine that drove the past 30 years:

• Cheap Asian manufacturing

• Cheap Russian energy

• A cheaper work force from Eastern Europe.

Withdrawal of all three forces. Reshoring supply chains costs a lot in terms of friction and structural cost, these will be borne by consumers directly, and put under pressure on corporate margins.

The Fourth Turning

We are now in the throes of what’s being called “a Fourth Turning”, an 80-year generational crisis that can fundamentally reshape the social, political and economic landscape. Trust in institutions is lost, centrism is lost, and public confidence in the system has been lost.

There are no easy answers to historical crisis turnings. They push for change at a systemic level, and either renew or collapse the system. However, no one is discounted the risk in the present markets. Equity risk premiums are still at very low levels and credit spreads are tight, whereas complex systems do not break linearly when stressed by multiple vectors, they break at unexpected moments.

The Unwinnable Bet

The implicit assumption of every investor who is long on stocks, of every government that is on a structural deficit, and of every central banker on a shaky credibility is that the system is stronger than it appears to be.

History tells us there is no record of any bet that has been won.

The current trend has come to an end because unpayable debt is piling up, hyper valuations are causing supply chain concern, and geopolitical war seems to be in full swing. So, the only thing left to be determined is the form in which the resolution will come.

Prepare accordingly.

Bretton Woods was established at the United Nations Monetary and Financial Conference in 1944, and it forced the United States to exchange official foreign dollars at a fixed rate for gold. Other currencies were also fixed to the dollar within a rather narrow range with the IMF providing short term support to temporary imbalances. The setup was fairly successful in the early post-war period. Three-quarters of the world’s monetary gold was in the United States, and Europe and Japan were in need of dollars for imports of reconstruction goods. The system gave liquidity to the growing trade and the gold tie gave the stability to the expectations.

The situation had changed by the 1960s. The share of world output of the United States was diminished by the recoveries of Europe and Japan. Constantly large American trade surpluses were created by the cost of the Vietnam war overseas, American capital flight, and domestic fiscal expansion. The pressure was met by the Federal Reserve’s policy, which fuelled higher inflation. The foreign official dollar holdings soon far outstripped the dollar holdings in the U.S. reserves that were available for conversion.

The underlying paradox came to light in 1960: the world required continuous deficits on the U.S. side in order to provide the dollar liquidity needed, but if such continuous deficits were sustained, then confidence in gold convertibility would be eroded. French President Charles de Gaulle exacerbated the imbalance by exchanging dollars for gold and condemning America’s “exorbitant privilege”. In 1968 the London Gold Pool failed and in 1971 when Germany floated the mark and Britain sought conversion of $3 billion, speculative pressure increased.

In the face of rapidly diminishing reserves, Nixon’s advisors convened at Camp David between 13-15 August, without the public knowing. They decided that it would be too costly for them to maintain the current balance. The evening of the 15th saw Nixon announce the suspension of convertibility, wage and price controls, and the import surcharge to make trading partners revalue. The emphasis of the package was on domestic stimulus rather than on the deflationary adjustment that continued convertibility would have imposed.

Markets opened up with a rise and the Smithsonian Agreement of December 1971 devalued the dollar from $38 to $42 an ounce and expanded bands. The realignment did not last long. In 1973, another devaluation took place and by March the major currencies were floating. The dollar was still a reserve currency, thanks to oil pricing, and the strength of the U.S. financial markets, but there was no formal gold link. The 1970s ushered in the era of stagflation and currency volatility, and central banks were granted discretion, leading to financial instability.

The Nixon Shock demonstrated that a gold-exchange standard is an external constraint that is binding. The political authorities have strong motives to break the rule when domestic objectives (employment, defence, social expenditure or electoral requirements) conflict with it. The above are all pressures that would be felt today under the high level of public and private debt, continuing demands for welfare benefits, infrastructure and crisis spending, and complex financial systems. A credible gold standard will help countries to trim their deficits via deflationary policy and force deficit countries to expand via inflationary and imaginative methods. History has proven that such imbalance leads to political resistance and ultimately to political disintegration from the inter-war years up to 1971.

Gold’s relatively inelastic supply would also create a risk of deflationary bias, if it continued to grow, unless there is new gold to be discovered, which is an unsure and expensive process. The discipline imposed by an external anchor and the protection of chronic inflation are rightly emphasised. However, the political economy of contemporary democracies indicates that however much desirable a new gold standard is, it would be put to the test the next time of a major recession, geopolitical event or banking crisis. But, as in 1933 and 1971, the system would probably be suspended or diluted without limits on fiscal discretion and central-bank activism that could be credible and concurrent.

On 15 August 1971, the United States made a decision on domestic policy flexibility vs. Bretton Woods rules by closing the gold window. It was caused by the political decision of incompatible fiscal and monetary policies and gold convertibility, an imbalance of a technical nature. If a gold standard were to be reinstated, it would face the same dynamic. If the incentives that lead sovereign governments to increase spending and maintain monetary autonomy during times of crisis are not altered, then a new gold standard would be open to the dangers that struck the earlier gold standard. The current lesson from 1971 is that rules-based monetary orders have definite practical limits.

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