The 50% Bitcoin Drawdown and the 50-Week Silver Hammer: How We Are Trading the Divergence to Protect Your Capital in 2026
Weekly Update - Week 25
“Bull markets are born on pessimism, grow on skepticism, mature on
optimism, and die on euphoria.”
John Templeton
In June’s issue of VMF’s Strategic Asset Allocation, we devoted significant attention to one of the most important divergences in markets today. AI-related assets have gone parabolic.
Cryptoassets have gone in the opposite direction.
That contrast is striking. It is also exactly why the opportunity may be so interesting. As we explained in the monthly issue, we do not see crypto as separate from the AI story. Over time, we believe it may prove to be one of its most important extensions, especially as autonomous agents, digital payments, tokenized assets, programmable money, and machine-to-machine transactions become increasingly relevant.
For now, however, the market does not see it that way.
Bitcoin remains under pressure and sentiment across the crypto complex is deeply depressed. But price is now testing a major long-term support zone. And this is not just any support zone. It brings together several important technical references: key moving averages, Fibonacci retracement levels, and the prior multi-year breakout area.
Take your pick...
There is a lot of support here, which is precisely what makes this level so important. Our view remains that it will hold. That does not mean the process will be comfortable. Important lows rarely are.
But the combination of extreme pessimism, a 50% drawdown, a major support test, and an emerging bullish momentum divergence is exactly the kind of setup we want to study closely, not abandon emotionally.
The same message is beginning to appear elsewhere in our Alternatives book. Take silver. As you can observe in the chart, PSLV just printed a large weekly hammer almost exactly where it needed to: right above the support provided by the 50-week moving average.
This is happening after a sharp correction, with momentum washed out and retail sentiment toward precious metals sitting at deeply pessimistic levels.
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That matters. When an asset refuses to break down at a widely watched support level, precisely when investors are least interested in owning it, the message deserves attention. Silver is not yet out of the woods, but the risk-reward profile is improving.
Meanwhile, in our Equities book, Altius Minerals continues to shine. This remains one of our highest-conviction positions across Alpha Tier’s Model Portfolio, and the price action continues to validate that conviction.
While many cyclical stocks have struggled through the recent risk-off environment, Altius has continued to move higher and now sits close to new highs.
That is not normal.
But Altius is not a normal natural resources company. It is a royalty and streaming business with exposure to long-duration resource optionality, inflation-linked assets, and structural demand themes across the commodity complex. The market is finally beginning to understand that distinction...
We recognized it early. Now, price is doing the talking.
So yes, Alternatives have been under pressure. Crypto has tested investor’s patience. Precious metals have corrected. And leadership has remained concentrated elsewhere.
But the setup is changing.
Bitcoin is testing major support. Silver is refusing to break lower. Altius continues to defy the broader cyclical weakness. And across the Alternatives bucket, the gap between sentiment and potential opportunity is becoming increasingly interesting.
That is exactly why we are paying attention.
Good investing!
Vasco Marques de Freitas, CFA, CMT
A quick note on accountability.
We don’t publish these theses to be right on paper. We publish them to express edge in the real economy. Our Leaderboard shows the exact scorecard since inception, tracking every position, our compounding outperformance against the market, and the triple-digit winners we’ve captured along the way.
You can view the exact numbers on our Leaderboard.
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Disclaimer
The information provided herein is for general informational purposes only and does not constitute financial advice or a recommendation to buy, sell, or hold any investment. It is not tailored to any specific individual or investor profile. All investments involve risks, and past performance is not indicative of future results. Before making any investment decisions, it is important to consider your own financial situation and risk tolerance. We do not guarantee the accuracy, completeness, or reliability of any information provided, and we disclaim any liability for any loss or damage arising from reliance on the information herein. Readers are advised to consult with an authorized financial intermediary before making any investment decisions.