Gareth Soloway, chief market strategist and chairman of Verified Investing, told David Lin on The David Lin Report that Bitcoin is forming a bear flag pattern that could cause a roughly 38% drop to $50,000, while the S&P 500 mirrors signals seen during the peak of the dot-com boom.
Bear Flag Pattern and Key Levels
Soloway highlighted that Bitcoin is consolidating between $80,000 and $85,000, which he interprets as a bear flag — a continuation pattern that previously resolved lower. Unless Bitcoin breaks above $85,000, the next downside target is $50,000, representing a decline of about 38%. He pointed to structural headwinds for crypto: government handling of token launches (which he described as “rug-pull-like” activities), the CLARITY Act offering little clear benefit, and investors rotating capital from Bitcoin into AI semiconductor and infrastructure projects.
Parallels to the Dot-Com Bubble
Soloway drew direct comparisons between the current equity market and the year 2000. The Nasdaq just broke through 25,000, similar to when it pierced 5,000 before peaking, while the IGF Expanded Tech Software ETF has lost roughly 20% of its value in 2026 — a divergence he says traders should not ignore. He remains short the S&P 500, building the position gradually, with a first downside target at former resistance (now support) and a deeper pullback potentially bringing the index back to the middle of the parallel channel from COVID lows.
Recession Delayed to 2027
Soloway pushed back his recession call to 2027, attributing continued economic growth to the $700 billion in annual AI capital expenditures by mega-caps like Meta, Amazon, Google, and Microsoft. Fed Chair Jerome Powell acknowledged during the latest FOMC meeting that data center expansion has been a key economic driver. When those companies cut spending, Soloway expects a recession. On inflation, he sees a near-term peak from oil above $100/barrel as temporary due to political pressure ahead of midterms, but long-term core inflation could settle in a 3%–4% range, driven by government spending adding roughly $1 trillion in new debt each quarter.
Gold, Natural Gas and Bonds
Regarding gold, Soloway treats it as a risk asset now, neutral on short-term moves with $3,900 as first major support and $3,500 only if the Nasdaq falls 20% or more. Long-term (five years) he remains bullish. Natural gas is his only short-term buy recommendation — a breakout above $2.88 could attract capital flowing out of oil, as data centers need power, nuclear isn’t ready, and gas is cheap relative to oil. The 10-year Treasury yield hovering around 4.5% signals the bond market hasn’t given a green light, yet equities rally on retail flows and index momentum — another reason Soloway is expanding his shorts on the S&P and Nasdaq.
Technical Focus Area
As of Sunday, May 3, 2026, Bitcoin is consolidating around the $80,000 resistance with mixed signals and strong support from moving averages. Soloway warned that if the Nasdaq continues to decline, Bitcoin holders will panic, and the cryptocurrency will quickly catch down to equities.