Trading the Markets: February 4, 2026 | Kris Bullock and Bijan Maleki

Key Concepts

• Geopolitical Tension: A primary driver of current market downturn, specifically related to Iran nuclear talks breakdown.
• Liquidity: Decreasing M2 supply indicates a tightening of liquidity, negatively impacting risk assets.
• Technical Analysis: Utilizing moving averages (20-week, 200-day), RSI (Relative Strength Index), and CME gaps to assess market trends and potential reversals.
• CME Gap: A price discrepancy on the CME futures market that often acts as a magnet for price action.
• Bare Market/Oversold Territory: Conditions indicating potential for a reflexive bounce, but not necessarily a sustained uptrend.
• Reflexive Bounce: A temporary price increase following a significant downturn.
• AI & Pharmaceuticals: A sector showing resilience and potential growth due to AI integration in drug development.
• M2 (Money Supply): A measure of the total money supply, its contraction signals tightening financial conditions.
• PMI (Purchasing Managers' Index): An economic indicator, while positive, considered lagging and not a sole catalyst for market reversal.

Market Overview & Geopolitical Impact

The markets are currently experiencing a downturn driven primarily by escalating geopolitical tensions, specifically the breakdown of Iran nuclear talks. This news event exacerbated existing downward pressure, causing widespread declines across major stock indices and crypto assets. Chris Bullock notes that this pattern of market drops coinciding with show broadcasts has returned.

Stock Index Analysis

A review of major stock indices reveals concerning trends:

• Dow Jones: Relatively holding its ground compared to other indices.
• S&P 500: Has broken key daily moving averages, signaling a weakening trend.
• NASDAQ: Has broken below its 20-week moving average, a particularly bearish signal (bull market support band broken).
• Russell 2000: Also showing signs of losing key technical levels.

These declines are impacting other asset classes, including crypto.

Macroeconomic Factors & Liquidity

Beyond geopolitical factors, macroeconomic conditions are contributing to the market weakness:

• M2 Contraction: A decrease in the M2 money supply indicates a tightening of liquidity, which is hindering risk asset performance.
• Dollar Rebound: The US dollar has rebounded from a previous crash, adding to market uncertainty.
• PMI Print: While the recent PMI print was positive, it’s considered lagging data and insufficient to trigger a significant market turnaround.

The overall assessment is that risk assets are in a “holding pattern” until liquidity stabilizes and begins to flow again.

Bitcoin Analysis & Potential Reversal

Bitcoin is experiencing significant downside pressure, but indicators suggest a potential for a short-term bounce:

• Weekly RSI: Bitcoin’s weekly RSI is at levels typically seen during bear market lows, indicating oversold conditions.
• Monthly Red Candles: Bitcoin has experienced five consecutive red monthly candles, a rare occurrence in its history, further reinforcing oversold status.
• CME Gap: A CME gap exists to the upside around $84,000, which could act as a bullish catalyst.
• Support Levels: Chris identifies a support range for Bitcoin between $50,000 - $70,000, based on previous cycle highs and trading activity. He anticipates a potential bottom in Q2, coinciding with anticipated improvements in liquidity and macroeconomic conditions.
• Base Case: Despite the potential for a bounce, the base case remains a further leg down after a reflexive bounce, with a likely reversal in Q2.

Crypto Bright Spots: Hype & PER

Despite the broader crypto downturn, Hype and its associated token PER are demonstrating strong performance:

• Hype’s Uptrend: Hype is currently in an uptrend on its daily time frame and attempting to flip its weekly trend.
• New Protocol: The introduction of a new protocol allowing trading of commodities (gold and silver) on the Hype platform is driving increased trading volume and token buybacks.
• PER as a Beta Play: PER (Hyperliquid Strategies) is a digital asset treasury company benefiting from Hype’s success. It provides exposure to Hype for investors in jurisdictions where direct access to the Hype token is limited.
• PER Buyback Program: A $30 million stock buyback program is adding further buying pressure to PER.
• Performance: Sean on the platform saw a 15% gain on Hype, and the speaker saw a 30% gain on PER.

Metals as a Safe Haven

Gold and Silver are emerging as relatively strong assets amidst market volatility:

• Healthy Correction: Both gold and silver experienced healthy corrections, reaching key moving averages (10-week and 20-week) before rebounding.
• Weekly RSI: The weekly RSI for both metals remains strong, even after the correction.
• Green Dots: The presence of “green dots” on a specific indicator suggests continued strength in the underlying trend.
• Preference over Bitcoin: Chris expresses a preference for gold over Bitcoin in the current market environment.

Emerging Sector: AI & Pharmaceuticals

A pharmaceutical sector leveraging AI is showing promise:

• AI Integration: Companies like Eli Lilly, Novartis, Merck & Company, and McKesson are investing heavily in AI research to accelerate drug development and reduce costs.
• Strong Earnings: Eli Lilly recently reported strong earnings, bucking the broader market trend.
• Potential for Outperformance: This sector is expected to outperform in the coming year due to the benefits of AI integration.

Iron (IREN) – A Mixed Outlook

Iron, a company involved in Bitcoin mining and AI compute power, presents a mixed outlook:

• Past Vulnerability: Iron faced potential delisting concerns due to its high percentage of digital assets, but the situation resolved itself.
• AI Pivot: Iron is diversifying into providing AI compute power, which is driving its business.
• Bitcoin Dependence: Iron’s performance remains linked to Bitcoin’s price, creating a potential headwind.

Looking Ahead & Key Takeaways

The outlook remains cautious, with a focus on monitoring key indicators:

• M2 Reversal: A reversal in the decline of M2 money supply is crucial for improving market sentiment.
• NASDAQ Stability: The NASDAQ needs to regain key moving averages to signal a potential stabilization.
• Bitcoin CME Gap: Monitoring whether Bitcoin can fill the CME gap around $84,000.
• Q2 Reversal: Anticipating a potential market bottom in Q2, driven by improved liquidity and macroeconomic conditions.

Final Advice: Avoid FOMO (Fear Of Missing Out) and emotional trading. The market can be volatile, and a disciplined approach is essential. Andreas Campbell’s interview on commodity cycles is recommended for further insight.