∞ σ

2026 FORECAST AND THOUGHTS: These are my extremely unorganized thoughts for 2026. In short, good times at first, but mostly bad times this year, and lots of volatility. In January, and possibly extending through Q1, expect a sharp run-up in alts and equities broadly. This rally will be driven by a perfect storm of tax-loss rebuying, gross under-allocation from sidelined players, a boost in retail from larger-than-usual tax refunds, and a favorable monetary impulse. Additionally, expect the administration to lean on the scale to juice their midterm odds. However, the optimism will be short-lived. While alts may outperform Bitcoin in January-Q1, BTC likely fails to hit a new ATH and the "rally" will end in extreme pain, failing to materialize in a sustainable bull market - similar to early 2024. This will keep the 4-year cycle theory in tact, something that no one believes in right now. I think we see a 2022-style down-only crypto market with most alts getting decimated. My guess is that BTC will eventually fall to the $38k–$48k range, which will be an all-time great buying opportunity. For stocks, don’t expect a "down-only" 2022-style slaughter. It will look more like 2018: high volatility with the index finishing +- 5%. We are staring down a period of significant economic weakness. Housing is already in a recession, and will likely continue to be, and as the saying goes, the housing cycle is the business cycle. With labor deteriorating due to the first real wave of AI-related layoffs and the continued K-shaped economy dynamics, we will really start to see real economic weakness mid to late year, though it will not culminate in a recession as investment and government spending will be too high for that. The market is currently pricing in instant rate cuts once Trump appoints a new Fed Chair, but that’s a mistake. The Fed will likely rebel to prove its independence, remaining more hawkish than necessary when Trump appoints a new chair. This will put immense strain on the economy, much more than is necessary, as the economy will continue to weaken, but will not receive the rate cuts that it needs. Furthermore, liquidity will lag behind economic needs. The Fed’s balance sheet expansion won't keep pace with the massive drain caused by the US having to refinance a mountain of debt - i.e., the liquidity base increases but does not keep up with the needs of the economic base. While AI earnings should hold up, the rest of the market, which is tethered to the "real" economy, will struggle. I think that the economic weakness combined with a stubborn Fed will result in a shock to the economy sometime in H2 (whether it be really bad economic data, some bank failures, or funding market blow ups) that will force the administration to juice the fiscal lever and for the Fed to come in MUCH stronger than it otherwise would have had to. This will be the juice that starts the next bull move: a return of liquidity and a return of retail. To understand the last three years, you have to understand the letter K. We have a K-shaped economy (the top 10% thrive while the 90% struggle), a K-shaped stock market (Mag 7 up, everything else flat/down), a K-shaped crypto market (BTC up, alts down), and a K-shaped Fed (pro-institution vs pro-administration). This K-shaped dynamic has infiltrated all parts of the economy, the market, and society. I expect that to continue. The reason alts haven’t moved despite a "good" stock market is that crypto is still a retail-heavy asset class, and retail is at the bottom of the K. Retail simply has no money right now and is in a recession. In 2021, they had stimmys and low rates, but since then, retail has been in a recession, and alts have reflected that. Bitcoin, conversely, has become an institutional asset at the top of the K, thus outperforming alts. Additionally, crypto is still extremely tethered to liquidity, and since 2018, we haven't had a constant "QE push", only sporadic liquidity injections like BTFP or T-bill buying. Alts need that constant liquidity flow to shine. This results in alts getting hit twice as hard - no retail flow, and no institutional liquidity, thus the depressed prices. The popular sentiment that "alts are dead" is particularly wrong. As the Fed eventually becomes a political, pro-liquidity institution, as alts finally start to embrace buybacks and all value accruing to tokenholders (i.e. Uniswap), and as the bottom K recovers, the very forces that suppressed alts this cycle will propel them in the next. Wall Street is calling for a fourth straight year of +20% gains, and crypto-native circles think the four-year cycle is dead. I’m fading both. I don’t believe AI is a bubble in the traditional sense; the market is richly valued, but the earnings are real, and the earnings are coming from other businesses, so they are somewhat immune to real economy weakness. There are two real bubbles: the AI bubble bubble (i.e., the bubble about AI being a bubble), and the US AI supremacy bubble. The first is simple, in the dot com bubble and 2021, everyone talked about stocks and few thought there was a bubble. Today, everyone talks about an AI bubble. As a general rule, you always fade public sentiment. Because of this, I do not expect there to be a traditional "pop" in the AI bubble that the public is talking about. The second bubble is more nuanced: the US AI supremacy bubble - i.e., the bubble that the US is the only country where you can get AI exposure. This has forced huge multiples on Mag7 companies because US AI is the only game in town. I suspect that sometime in 2026, China will start to flex its AI strength, similar to the DeepSeek moment but at a larger scale. This will cause US tech multiples to compress as the bubble that US AI is the only game in town pops. Prices will drop while earnings hold mostly steady. The bulls will be wrong because prices fall, but the bears will be wrong because nothing actually goes to zero and earnings don't collapse. It’s a bubble deflation, not a pop. Lastly, I expect there to be some kind of geopolitical issue that has last effects, unlike Iran/Israel that mattered for a few weeks. What that is, I'm not entirely sure. Additionally, I am highly convicted that inflation will be a non-issue, it will matter as it always does, but there is not risk that inflation reaccelarates. That said, we will likely not see a super weak dollar, in fact we could even see a stronger dollar due to the Fed lagging on rate cuts.

@Fallibilist I think it’s more bc he said “I hope they think it’s some wild as shit Arab who knows the deal is gonna fall through” 😂

Maybe Paul Tudor Jones figured it all out, maybe the best analysis is just overlaying price charts of two time periods and shorting the new top, maybe why he tries to get that documentary video deleted everytime someone uploads

Forgot to add an important negative cascade: You will see increased pushback on data centers and AI in general on both sides as the price of energy increases. We might even see trump strike a negative tone. This will put further pressure on AI names and further reinforce the “pop” (though it won’t be an actual bubble pop as I’ve stated many times, AI is real and will be the dominant narrative again after this year).

In bull markets, successive positive news catalysts typically cascade and reinforce the bull market. In bear markets, it’s the opposite - successive negative news cascades and compounds, reinforcing the bear market. This dynamic also makes the market more sensitive to bad news than it otherwise would be. In the most recent bull market the positive cascade was [short version]: rate hikes stop > treasury QE / QRA dynamics > AI > Russia war is no big deal > inflation falls > rate cuts and stealth QE > AI capex boosts GDP > Trump + deregulation > rate cuts. In this bear market I believe we will get the following negative cascade [not necessarily in this order]: Iran war leads to higher inflation > 2022 stagflation narrative re-emerges > Fed refuses to cut (considers hike) > Tillis blocks Warsh nomination > neutered fed that’s too hawkish > consumer spending + labor market take a hit due to high rates and inflation > elevated rates crush housing > low residential investment means lower GDP > stagflation narrative reinforced > elevated inflation and prolonged war forces neutered fed to not respond to labor and housing weakness > recession fears activate > stagflationary recession is now the dominant narrative > long end blows out due to spending, inflation, and trust in US > lower growth and higher rates causes some of the bad AI investments and private credit skeletons to spook the market > new narrative is that the AI and private credit bubbles have popped > market thinks much of AI was a waste > Russia and China start modest making moves geopolitically to take advantage of US being distracted > sensitive market mistakes this for the start of WW3 and imminent Taiwan invasion > tariff drama reemerges in response to SCOTUS and as a distraction technique​​​​​​​​​​​​​​​​ > market convinced world is ending. End result: market convinced of WW3 stagflationary recession and that AI was just a bubble. We will likely see that peak between August - November 2026. Around then, the Fed will shift to more accommodative as the labor and housing markets significantly deteriorate. At the same time, dominos will start to fall that lead to an end to the war (though most won’t realize this until months later). We will then see inflation fall, growth pick up, and rates fall in 2027, which will reinvigorate the AI economy and all financial assets. Your job is to buy (all in) in late 2026 when everyone is convinced of a WW3 stagflationary recession.

2026 FORECAST AND THOUGHTS: These are my extremely unorganized thoughts for 2026. In short, good times at first, but mostly bad times this year, and lots of volatility. In January, and possibly extending through Q1, expect a sharp run-up in alts and equities broadly. This rally will be driven by a perfect storm of tax-loss rebuying, gross under-allocation from sidelined players, a boost in retail from larger-than-usual tax refunds, and a favorable monetary impulse. Additionally, expect the administration to lean on the scale to juice their midterm odds. However, the optimism will be short-lived. While alts may outperform Bitcoin in January-Q1, BTC likely fails to hit a new ATH and the "rally" will end in extreme pain, failing to materialize in a sustainable bull market - similar to early 2024. This will keep the 4-year cycle theory in tact, something that no one believes in right now. I think we see a 2022-style down-only crypto market with most alts getting decimated. My guess is that BTC will eventually fall to the $38k–$48k range, which will be an all-time great buying opportunity. For stocks, don’t expect a "down-only" 2022-style slaughter. It will look more like 2018: high volatility with the index finishing +- 5%. We are staring down a period of significant economic weakness. Housing is already in a recession, and will likely continue to be, and as the saying goes, the housing cycle is the business cycle. With labor deteriorating due to the first real wave of AI-related layoffs and the continued K-shaped economy dynamics, we will really start to see real economic weakness mid to late year, though it will not culminate in a recession as investment and government spending will be too high for that. The market is currently pricing in instant rate cuts once Trump appoints a new Fed Chair, but that’s a mistake. The Fed will likely rebel to prove its independence, remaining more hawkish than necessary when Trump appoints a new chair. This will put immense strain on the economy, much more than is necessary, as the economy will continue to weaken, but will not receive the rate cuts that it needs. Furthermore, liquidity will lag behind economic needs. The Fed’s balance sheet expansion won't keep pace with the massive drain caused by the US having to refinance a mountain of debt - i.e., the liquidity base increases but does not keep up with the needs of the economic base. While AI earnings should hold up, the rest of the market, which is tethered to the "real" economy, will struggle. I think that the economic weakness combined with a stubborn Fed will result in a shock to the economy sometime in H2 (whether it be really bad economic data, some bank failures, or funding market blow ups) that will force the administration to juice the fiscal lever and for the Fed to come in MUCH stronger than it otherwise would have had to. This will be the juice that starts the next bull move: a return of liquidity and a return of retail. To understand the last three years, you have to understand the letter K. We have a K-shaped economy (the top 10% thrive while the 90% struggle), a K-shaped stock market (Mag 7 up, everything else flat/down), a K-shaped crypto market (BTC up, alts down), and a K-shaped Fed (pro-institution vs pro-administration). This K-shaped dynamic has infiltrated all parts of the economy, the market, and society. I expect that to continue. The reason alts haven’t moved despite a "good" stock market is that crypto is still a retail-heavy asset class, and retail is at the bottom of the K. Retail simply has no money right now and is in a recession. In 2021, they had stimmys and low rates, but since then, retail has been in a recession, and alts have reflected that. Bitcoin, conversely, has become an institutional asset at the top of the K, thus outperforming alts. Additionally, crypto is still extremely tethered to liquidity, and since 2018, we haven't had a constant "QE push", only sporadic liquidity injections like BTFP or T-bill buying. Alts need that constant liquidity flow to shine. This results in alts getting hit twice as hard - no retail flow, and no institutional liquidity, thus the depressed prices. The popular sentiment that "alts are dead" is particularly wrong. As the Fed eventually becomes a political, pro-liquidity institution, as alts finally start to embrace buybacks and all value accruing to tokenholders (i.e. Uniswap), and as the bottom K recovers, the very forces that suppressed alts this cycle will propel them in the next. Wall Street is calling for a fourth straight year of +20% gains, and crypto-native circles think the four-year cycle is dead. I’m fading both. I don’t believe AI is a bubble in the traditional sense; the market is richly valued, but the earnings are real, and the earnings are coming from other businesses, so they are somewhat immune to real economy weakness. There are two real bubbles: the AI bubble bubble (i.e., the bubble about AI being a bubble), and the US AI supremacy bubble. The first is simple, in the dot com bubble and 2021, everyone talked about stocks and few thought there was a bubble. Today, everyone talks about an AI bubble. As a general rule, you always fade public sentiment. Because of this, I do not expect there to be a traditional "pop" in the AI bubble that the public is talking about. The second bubble is more nuanced: the US AI supremacy bubble - i.e., the bubble that the US is the only country where you can get AI exposure. This has forced huge multiples on Mag7 companies because US AI is the only game in town. I suspect that sometime in 2026, China will start to flex its AI strength, similar to the DeepSeek moment but at a larger scale. This will cause US tech multiples to compress as the bubble that US AI is the only game in town pops. Prices will drop while earnings hold mostly steady. The bulls will be wrong because prices fall, but the bears will be wrong because nothing actually goes to zero and earnings don't collapse. It’s a bubble deflation, not a pop. Lastly, I expect there to be some kind of geopolitical issue that has last effects, unlike Iran/Israel that mattered for a few weeks. What that is, I'm not entirely sure. Additionally, I am highly convicted that inflation will be a non-issue, it will matter as it always does, but there is not risk that inflation reaccelarates. That said, we will likely not see a super weak dollar, in fact we could even see a stronger dollar due to the Fed lagging on rate cuts.

It’s pretty simple, the oil shock is the first thing to overshadow AI in 4 years. Tariffs did for about a week but then he TACO’d. You cannot TACO this war, too many parties involved, too much damage done already. The longer this persists, the worse and more structural the problem becomes. Lower.

@dampedspring @DannyDayan5 @PharmD_KS From commentary/sentiment alone, you’d think the market is down 20% from ATHs. People have been conditioned to BTFD on leverage and are about to learn the hard way that a TACO can’t solve every problem. Lower.

@DannyDayan5 @PharmD_KS Funny. I did some mild short covering in bonds and stocks but didn't see any panic in any markets at all. All I see is guys like the two of you saying all you guys see is panic.

I haven’t looked at anything other than peeking on my phone (starting in shortly) but regardless of whether that’s “bottom” or even a short term “swing low” that action is precisely what you want to see in order to consider being meaningfully bullish. Completely bidless, emotional selling insensitive to price. A lot more of it would’ve even better

@WatcherGuru Oil is priced on the marginal barrel…

JUST IN: 🇺🇸 President Trump says the US does not use the Strait of Hormuz and does not need it.

Already seeing parts of the cascade happen. The narrative has shifted. Used to be AI, but now, Iran has outshadowed AI. First time in 4 years. When the narrative shifts, the market shifts from bull to bear. Again, short squeezes will happen on the slightest good news, so don’t bet the farm on shorts. Unless you know what you’re doing, cash > shorts.

@spectrader5 Thank you ser

@Infinite__Sigma Great thoughts mate

$CAKE is screaming at me to buy rn. It is the only token with actual deflationary tokenomics. However, I am going to resist the urge until the broader market resolves lower.

@smileycapital @BobEUnlimited They will be at first, which will further crush labor. Then, once labor has sufficiently deteriorated they will turn into uber doves. That’s how it always goes. Central bankers are always behind the curve.

@BobEUnlimited do you think they would be reluctant to hike due to unemployment - or will that only make them delay the inevitable thus obviously hiking too late, as always?

Central Bankers Look Up The oil shock has dashed hopes across the developed world that persistent elevated inflation would resolve itself even with easy policy. Now those policymakers are forced to tighter policy ahead. bobeunlimited.substack.com/p/central-bank…

@01010010Y Always does

@Infinite__Sigma interesting thoughts - T will keep us busy for sure 😅

Makes a lot of sense. Gold is geopolitical instability hedge, UNLESS dollar strengthens and creates a flight to safety dynamic. Then, dollar is geopolitical instability hedge. We saw this with Russia in 2022 [huge geopolitical instability but gold fell due to rising rates]. The dollar controls all.

Makes LITERALLY ZERO sense. GOLD the hedge for geopolitical instability is crashing in the face of geopolitical instability. Can’t make this up.

Longing $OIL here. Think we see $150+ this year. Paper and physical markets are disconnected rn [see Dubai oil and Brent to an extent]. Still short $BTC. Still never shorting $HYPE. 401k is still 100% cash, I have zero stock exposure. Patient traders will win in 2026. It’s wise to greatly overweight cash and only tactically go long or short. Be patient, read Soros and GCR with your new found free time. I knew to go into cash when the market stopped reacting positively to good news in February - analyzing how the market reacts to news is by far the most powerful alpha a trader has. I have been a perma bull since early 2023, but now we have the war, the first event that has shadowed the AI narrative in 4 years. This is a sea change in macro. This is the real deal, and people are still underweighting the duration and impact despite Trump repeatedly hinting that it’s gonna be longer and worse than most think. It will get much much worse later this year. Squeezes are always possible, so don’t overlever your shorts. The best trade in 2026 is patience (cash). Bottom is not in. You will have a truly generational buying opportunity later this year. When you are genuinely concerned that it’s over, that’s when you need to go all in. Good luck.

Textbook. GG.

$BTC Overhead resistance from tariff tantrum lows (dashed line) and diagonal resistance from wedge. Very low volume rally. Not a good combo. Funding rate moving to neutral and coinbase premium is slightly positive. Cumulative volume delta also diverging from price. IMO, short squeeze is over or near over and we resume lower from here. $80k is possible, though unlikely. If we reach $80k, I’ll go 75% max risk short.

Clanker calling for down move in $HYPE. Let’s see if this holds by EOD.

$HYPE Price is massively diverging from revenue, TVL, and OI. Not to mention the ongoing problem of unlocks that has yet to be resolved. The repricing of $HYPE in 2026 will be massive and violent. When that happens, I’m not sure, but it will happen this year. I am not short $HYPE, but plan to buy it later this year sub $20. Until then… Hyperliquidated.

@CryptMisc Then I stand corrected, nice buy. If your cost basis is that low then it’s not worth selling. Hoping to join you around that price later this year.

@Infinite__Sigma Not at all. I haven't bought HYPE since $10. its only 10% of my port. wish it was more. its one of the only profitable crypto companies around

I am not betting against HYPE, I clearly said I am not short and plan to accumulate later this year [though I did call the top in $HYPE back in October and shorted it then fwiw. Also called equities top in Feb, but who’s counting]. The $HYPE bear case is undeniable, but It’s pretty obvious by the fact that you found this tweet through a tag and claim HYPE is “the only project doing things correctly” that you are all in and won’t hear a bear case. Fine, that’s your prerogative. You’re in the right coin, but at the wrong time. There’s nothing wrong with overweighting cash, especially in a bear market. I’ve massively outperformed the market this year by holding cash and tactically going L/S w perps. Don’t get married to an asset, that’s how retail gets slaughtered. Good luck to you.

@Infinite__Sigma 1. You don't know that at all. 2. Even if it was, you still missed a easy 100% gain in the meantime. While betting against the one crypto project doing things corrrectly

Did you really think the FOMC wouldn’t be hawkish? Too easy.

You’d be wise to hold 0 risk exposure heading into the week.

@CryptMisc 1. It never went below $20 2. It’s low isn’t in Why would I buy something at $20 if I know it’s going below $20 later this year?

@Infinite__Sigma You literally had a chance to scoop it at $20 less than 2 months ago