Veteran analyst Gareth Soloway, chief market strategist at Verified Investing, warned that Bitcoin is forming a bear flag pattern near the $85,000 resistance level, which could lead to a 38% decline to $50,000 if confirmed. In an interview on The David Lin Report, Soloway also shared his bearish outlook on equities, a neutral stance on gold, and a bullish call on natural gas.
Bitcoin Bear Flag: Key Zone Between $80,000 and $85,000
Soloway highlighted that Bitcoin has been consolidating in the $80,000–$85,000 range, creating a pattern he identifies as a bear flag. “If Bitcoin cannot break above $85,000, the next target on the downside is $50,000—a drop of roughly 38%,” he stated. He noted structural headwinds for crypto, including the U.S. government’s approach to token launches (described as “rug pull” activity), the CLARITY Act languishing in Congress, and investor capital rotating into AI semiconductors and infrastructure instead of Bitcoin.
S&P 500 Echoes 2000 Dot-Com Bubble Signals
Soloway pointed out that the current equity market resembles the late-stage bull market of 2000, with the Nasdaq breaking above 25,000 while the software ETF (IGF) has lost 20% year-to-date. He maintains a short position in the S&P 500, adding gradually. The first downside target is the former resistance at the all-time high turned support; a deeper pullback could bring the index back to the middle of its parallel channel from COVID lows.
AI Spending Delays Recession, Debt and Inflation Loom
Soloway shifted his recession forecast to 2027, attributing the delay to roughly $700 billion in annual AI capital expenditures from Big Tech (Meta, Amazon, Google, Microsoft). He noted that Fed Chair Jerome Powell acknowledged data center construction as a major economic driver. Once those spending cuts begin, a recession will follow. On inflation, he sees a temporary spike from oil above $100/barrel and a structural rise from 2.7% to 3–4% due to ongoing government deficit spending of about $1 trillion per quarter.
Gold Neutral; Natural Gas the Only Buy
Soloway treats gold as a risk asset now, remaining neutral short-term with first support at $3,900. A 20%+ Nasdaq drop could bring it to $3,500. Long-term, he remains bullish. His sole near-term buy recommendation is natural gas, citing data center energy demand, cheap prices relative to oil, and a breakout above $2.88 as a catalyst for capital rotation.
Bitcoin or Stocks: Which Falls First?
When asked which would decline first, Soloway explained that equity weakness has been anticipated, but if the Nasdaq continues dropping, Bitcoin investors will panic, and the cryptocurrency will rapidly catch up to the losses.