Chartered Market Technician AG Thorson said Bitcoin may have already put in a short-term top even after a sharp rally tied to a U.S. Treasury bond buyback announcement and a bullish White House crypto event. In his view, the market could still face one last washout in September or October, with price potentially falling toward $40,000.
Dollar weakness lifts metals and mining shares
Thorson said the U.S. Treasury announced a bond buyback plan on Wednesday aimed at suppressing long-end yields. After that, the U.S. dollar index fell below its 200-day moving average, reinforcing his view that the dollar may have topped in June. He said brief rebounds are still possible, but the broader downtrend should resume, with the dollar potentially falling below 90 next year.
He also said the Gold Cycle Indicator rose to 119, a reading he described as evidence that gold has already emerged from its cycle low.
In energy markets, Thorson said WTI crude is testing an upper boundary. A series of closes above $88 would support a breakout, he said. That kind of move could push inflation higher and put upward pressure on long-term Treasury yields.
Gold, silver and platinum seen as having formed major mid-year lows
Thorson said gold formed an important low around mid-year, in line with his earlier call, and that the uptrend has resumed. He added that the metal may need time before it can reclaim $5,000 on a sustained basis, but he expects gold to eventually move above $7,000 next year before reaching its next major top.
On silver, he made a similar argument. Thorson said silver also formed a major mid-year bottom and has restarted its advance. He expects the metal to consolidate between $90 and $100 before setting a new all-time high next year, most likely in the second half.
For platinum, he said price has broken above its cyclical downtrend line, which he sees as confirmation of an important bottom. He expects resistance between $2,200 and $2,400, followed by a fresh all-time high next year.
Mining shares remain a key part of his thesis. Thorson said GDX bottomed around mid-year as expected and has rallied more than 40% from that low. He said that performance supports his view that mining shares are taking leadership from gold itself. In his estimate, the group could reach a record high well before gold does, possibly before the end of this year.
He added that GDXJ has held its 200-day moving average and does not currently appear headed for a meaningful pullback. SILJ, he said, rebounded immediately after retesting its trendline, and July may already have marked an important bottom. He still expects SILJ to hit a new high before silver does.
Bitcoin rally forces a reassessment, but not a full reversal
On Bitcoin, Thorson said the asset initially surged on the Treasury buyback announcement and then accelerated during a bullish White House crypto event. The move triggered heavy short covering and a record $3 billion in liquidations.
Despite the strength, he said short-term cycle indicators still support the possibility of a top forming around Aug. 25-26. At the same time, Bitcoin’s return above the 200-day moving average has weakened his previous bearish timing call. He said one of his earlier conclusions, and possibly both, may be wrong: either Bitcoin will not fall to $40,000, or the bottom will not arrive in October.
Even so, he still thinks September could mark the start of a final round of market clearing. From a sentiment perspective, he said Bitcoin would need to break below $50,000 to fully eliminate the remaining bulls. If price does not drop sharply in September, he said plainly that his call would be wrong and that the market may bottom roughly three months earlier than he expected.
Equilibrium price remains near $39,880
Thorson said Bitcoin tends to bottom on a four-year cycle and that in each cycle, price has at least tested or fallen below its equilibrium price. He put that level at $39,880. That framework is why he has spent the last six months expecting a test of $40,000.
He said he still sees a strong chance of one more decline before October. For now, he described the latest rally as potentially the final rise before the final drop. Time, he added, will decide whether that scenario holds.
Jackson Hole in focus next week
Thorson ended by saying traders should watch price action around Warsh’s speech at Jackson Hole next week.
He also said pullbacks in metals and mining shares would not be surprising. Even so, he believes the broader structure now looks consistent with the important lows he expected in June and July. Gold may need time to reclaim $5,000 on a sustained basis, and silver may need time to move back above $100, but he expects both metals to reach new all-time highs next year, with mining shares likely to lead the move.