Gareth Soloway Says Bitcoin Could Drop 38% and Retreat to $50,000

Gareth Soloway, chief market strategist and president of Verified Investing, thinks Bitcoin could drop 38%, pulling back to $50,000, citing a prominent bear flag pattern.

Soloway made the statement during a recent interview with David Lin of the David Lin Report. According to Soloway, while Bitcoin is signaling a potential crash, the S&P 500 is flashing signals that resemble what was seen at the peak of the dot-com boom.

Striking Similarities From Past Eras

During the interview with Lin, Soloway compared current market conditions with the 2000 era. He noted that the Nasdaq has climbed above 25,000 in a pattern similar to it surpassing 5,000 before topping out. The market strategist described the current market trend as a “late-stage bull market.” According to him, it is an environment where a handful of names carry the index while sectors like software are already down 20% year-to-date.

In the meantime, Soloway highlighted a crucial divergence in the IGF expanded software exchange-traded fund (ETF). He observed that the index is sitting on an all-time high, while its ETF has shed roughly 20% of its value in 2026. The analyst believes such a divergence is too critical to be ignored by traders and investors.

Soloway was adamant about the S&P 500’s upcoming decline. Although he favors gradually shorting the index, the analyst maintained that his initial downside target is the asset’s former all-time high resistance, which has automatically become a technical support. However, he maintained that a more significant downward push could bring the index back to the midpoint of its parallel channel from COVID lows.

No Recession Until 2027

Speaking on the broader economy, Soloway said he expects a recession in the US economy to happen in 2027. According to him, the $700 billion in annual AI capital spending from the likes of Meat, Amazon, Google, and Microsoft is keeping growth alive. Soloway believes a recession will set in as soon as those companies pull back their investment.

Why Bitcoin Will Decline

Soloway’s downside Bitcoin prediction comes when the cryptocurrency appears to be testing crucial bullish resistances. For instance, BTC surpassed the $80,000 on Monday morning, marking its highest level since the first week of February. Despite his current neutral outlook, Soloway noted that his 38% pullback prediction stems from a bear flag that marks the consolidation pattern between $80,000 and $85,000.

According to the analyst, other structural headwinds for crypto include the current administration’s handling of coin launches, which he thinks reflects rug-pull style activity and damaged trust. He also noted that the CLARITY Act’s progress through Congress offers little upside, while investors storing capital in Bitcoin are focusing on semiconductors and AI infrastructure plays.

Related: Bitcoin Tests Key Resistance as Analysts Flag Key Breakout Levels