Position 2026-10-26: short (-0.30, confidence 0.56)

We lean modestly bearish on Bitcoin for Monday, October 26, with moderate rather than high conviction. BTC closed Sunday near $80,050 after slipping below $80,000 intraday (low around $79,750). That leaves it down about 0.9% on the day, 2.4% on the week and 4.8% over 30 days, and roughly 37% below its all-time high near $126,200. Price keeps setting lower lows and bounces keep getting sold. The weekend break below $80,000 came on headlines about U.S. evacuations in the Middle East, a reminder that bitcoin is trading as a risk asset right now, not a haven. Demand has softened at the margin. U.S. spot bitcoin ETFs took in more than $500 million on each of two days early last week. They then flipped to roughly $636 million of net redemptions on Thursday and about $138 million on Friday, with IBIT the largest contributor both days. The week still finished net positive, snapping a two-week losing streak, but flows turned negative heading into the weekend. The Coinbase premium gauge has stayed negative and has been deeper over the past week than its 30-day average. USDC supply has shrunk by about $3.9 billion in a month, so there is less fresh dollar liquidity on the sidelines. On-chain, MVRV has drifted down to about 1.49 and roughly 38% of supply now sits below its cost basis. Long-term holders' share of supply has slipped about 0.7 percentage points in 30 days, and coin-days destroyed are running about 40% above the prior month. Both point to older coins being sold into weakness. Derivatives and macro point the same way. Front-month 25-delta put skew on Deribit has widened to about 4.6 vol points from a 7-day average near 2.9, and the DVOL implied-volatility index has ticked up to about 38.8, so traders are paying more for downside protection. Longs have taken most of the forced liquidations for four straight days, and much of the past day's long liquidations hit between $79,000 and $80,000. Even so, the share of Binance accounts positioned long has risen, not fallen, and perpetual funding remains positive, so the long side still looks crowded. Across markets, U.S. high-yield credit spreads have widened about 27% over 30 days and VIX is up about 28% over the same span. The MOVE bond-volatility index is above 100, the Nasdaq is down 3.6% in a month and the dollar is firmer. Over the past 60 sessions bitcoin has risen and fallen with the Nasdaq and moved opposite to the dollar, so this backdrop is a headwind. Why only a modest lean? Sentiment is genuinely neutral: the Fear & Greed index sits at 50 and search interest is flat, so there is neither euphoria to fade nor capitulation to buy. Dated-futures basis of about 5.5% annualized is ordinary contango, not a sign of stress. Open interest has also come down from last week's peak, so some leverage has already left the market. The week is crowded with catalysts. The FOMC meets October 27-28, with prediction markets pricing roughly a 92% chance of a hold. GDP and personal income and outlays come out October 29, alongside 2-, 5- and 7-year Treasury auctions. A large Deribit options expiry on October 30 has its heaviest open interest right at the $80,000 strike. Prediction markets' implied median for Friday's close is around $81,000, slightly above spot. Any of these can trigger a sharp move in either direction. What would change our mind: a sustained move back above the $82,000-$83,000 area, together with renewed ETF creations and the Coinbase premium turning positive, would suggest the late-week selling was a blip. A decisive loss of $79,000 with continued redemptions and widening credit spreads would strengthen the bearish case. This note is market commentary, not investment advice.