Markets Running Hot: When to Hold and When to Fold
Bitcoin Roadmap
Hello everyone, Timothy Assi here. Thank you for being part of the Panic Drop community. We’ve got a lot to cover today across stocks, gold, and Bitcoin, so let’s get right into it.
S&P 500: Letting Strength Run Its Course
We saw a pullback in the S&P 500 last week with a big red candle, but I actually view this as healthy behavior. This isn’t weakness; it’s the market maintaining its uptrend by not stretching too far too fast. We pulled back toward the 10-week moving average, which is exactly what you want to see in a sustained runaway market.
When you see this kind of action, you just let it run.
This market is heading higher, and you don’t want to get in its way. Ride the momentum, stay fully allocated, and watch how this unfolds toward what I believe will be a bullish Q4.
There are always concerns out there, of course..
Tariff concerns, shutdown concerns, questions about whether the Supreme Court might limit Trump’s tariff ability, which is a big focal point of his macro policy. That could weigh on the market if it happens, but that decision isn’t due for some time. The shutdown obviously isn’t impacting this chart, whereas a positive resolution could, in a bull market, give it fuel to continue higher.
There are also concerns that the market is too dependent on a smaller number of stocks, which is true. But we’ve seen quite a few AI stocks take a pounding this last week, and we’ve held up broadly okay. It could just be a matter of more rotation into other sectors that drives this market higher overall.
Gold: Holding Up After the Blow-Off Move
I think gold probably peaked in the short term because this was a bit of a mini blow-off move. Sentiment really pushed to extremes. We had news of people lining up to buy gold bullion and sell their jewelry. Those were real signs of retail excitement that match what we see on this chart.
That said, gold is holding up pretty well after that blow-off move. I want to remain in my positions because this is a powerful bull market. The market can always surprise us and continue pushing higher, and I don’t want to be caught out of position if that happens.
Silver is in the same orbit, as you know. It’s highly influenced by what happens to gold as the proxy of precious metals. Similar look here: it peaked around $54, has now pulled back to that 10-week moving average and tagged it a couple times.
Bitcoin: At a Critical Level
Bitcoin on the weekly timeframe is really at a key inflection point right now. Looking at the prior weekly cycles, the last two did the same kind of thing. They rolled over one more time into a deeper low to tag that rising 50-week moving average around that 30-week mark.
This low right now is at the 30-week mark as well. So is it mirroring the last two weekly cycles? We hope it is, and if that’s the case, we should see a big move up shortly.
My game plan is very simple now. I’m fully allocated in crypto, but this can change quickly depending on what happens next.
On the weekly timeframe, I’m watching if Bitcoin can remain above the 50-week moving average. This entire four-year cycle, Bitcoin has never closed a weekly candle below it, so that would be a bearish sign. Real confirmation would be two weekly closes below the 50-week moving average. If that happens, I’ll cut my Bitcoin allocation for the most part.
I’m also watching the monthly chart for a bearish setup. Bitcoin took out the swing high from January and hasn’t closed below it since. That high sits at $109,300, so I don’t want to see a monthly close below it. If it does, I’ll adjust accordingly.
Just know, Bitcoin can cover a lot of upside territory in a short period of time. Look at what happened in 2024: from a low of $38K to a high of $74K in only 7 weeks.
So in just 7 to 10 short weeks, Bitcoin sentiment can flip from “it’s all over” to “super cycle, let’s go.”
Thanks for reading!
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Written by Timothy Assi, an Elite Popular Investor on eToro.
Not investment advice. eToro is a multi-asset investment platform. Your capital is at risk. For information and educational purposes only.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
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