Soloway Says Bitcoin Could Slide to $50K on Bear Flag

Gareth Soloway, chief market strategist and president of Verified Investing, warned in a recent interview that bitcoin could fall roughly 38% to about $50,000 if the cryptocurrency does not break above $85,000. He described the price action between roughly $80,000 and $85,000 as a bear-flag pattern that points to further losses and said he is increasing short positions on the S&P 500.

Soloway noted the consolidation around $80,000 to $85,000 resembles an earlier pattern that resolved lower. He set a downside target at approximately $50,000 unless bitcoin clears $85,000, and cited regulatory friction, damaged investor trust around token launches and uncertainty tied to proposed legislation as structural headwinds for the market. He also said some investors who might have put money into bitcoin are instead buying semiconductor and AI infrastructure stocks.

On equities, Soloway described the market as a late-stage rally led by a small number of large-cap names while many other sectors lag. He pointed out that the Nasdaq recently passed 25,000 and compared that move to the index passing 5,000 before its 2000 peak. Soloway highlighted an ETF focused on software that is down about 20% year-to-date even as major indices sit near record levels, a divergence he said should concern traders.

Soloway is building short positions on the S&P 500 in stages rather than entering all at once. He identified the market’s former all-time high, now acting as support, as his first downside target and said a larger retracement could bring the index back toward the midpoint of a parallel channel measured from the COVID lows. He pointed to the 10-year Treasury yield near 4.5% as a signal the bond market is not confirming equity highs and said retail inflows and index momentum are masking that divergence.

On the economic outlook, Soloway pushed his recession forecast to 2027 and attributed the extension of growth to about $700 billion a year in AI-related capital spending by companies such as Meta, Amazon, Google and Microsoft. He said sustained data center buildout and infrastructure spending are supporting activity for now and that a pullback in that spending would bring recession risks back into focus.

Soloway described inflation as two-part: an oil-driven spike that may prove temporary and a higher structural baseline he expects to settle in the 3% to 4% range given ongoing large government deficits. He reported government borrowing at roughly $1 trillion in new debt every quarter as a factor in longer-term inflation expectations.

Outside stocks and crypto, Soloway identified natural gas as his primary near-term buy. He said a breakout above $2.88 per million British thermal units could attract capital rotating out of oil, citing data centers’ power needs, limited near-term nuclear capacity and relatively low natural gas prices. On gold, he said he is trading the metal as a risk asset, watching $3,900 as the first meaningful support and $3,500 only if the Nasdaq falls more than 20%, while remaining bullish over a multiyear horizon.

Soloway warned that while stocks appear more overdue for a correction, a substantial drop in the Nasdaq could trigger a rapid unwind in bitcoin as investors sell assets to raise cash.