Cryptocurrencies were in the depths of despair earlier this year, with Bitcoin and altcoins facing declines of 50% or more from their 2025 highs. Bitcoin peaked at $125k last October but fell as low as $60k in February. However, the last couple of months have offered signs of renewed hope for the crypto space. Bitcoin rallied more than 30% to return above $80k, bringing about notable technical developments. Given some of the improvements we’ve seen, is now the time to hop back aboard the crypto train?

The iShares Bitcoin Trust ETF (IBIT) is one of the most popular ways to gain exposure to Bitcoin. The fund completed its third consecutive buy signal this week and moved back into a positive trend last month. With recent action, it faces no traditional resistance until the $55 levels. Additionally, Bitcoin is back to passing its “bogey check,” reversing back into Xs against cash (MNYMKT) on 6.5% scale. Bitcoin sees the majority of its gains when “passing” and in Xs, so the reversal is a positive development.

That said, not all that glitters is gold. Previous support on IBIT’s chart from $47 to $48 could serve as potential resistance, and the fund has a surprisingly low score of only 2.14. One of the biggest knocks against Bitcoin, and by extension IBIT, has been its underperformance relative to domestic equities. The coin moved to a market RS sell signal against the S&P 500 Equal Weight (SPXEWI) in January. And while Bitcoin reversed back into a column of Xs on its RS chart in April, it remains on an RS sell signal, indicating it’s still unfavored in the long term.

The market RS chart for Bitcoin has historically been one of the best indicators of Bitcoin’s strength. If you had invested $100 in Bitcoin at the beginning of 2012, it would be worth $1.7 million. However, if you had rotated between Bitcoin and SPXEWI based on RS buy signals, you would have made more than triple that, at $6 million. Additionally, the strategy experienced less downside, with a max drawdown of 70% compared to 85% for Bitcoin. For context, a security down 70% from its highs would need to fall by another 50% to be down 85%.

While the improvement in Bitcoin is encouraging, it would need to sustain its rebound for longer before its technical picture gives a full green light. History has shown that extreme downside within crypto can persist for longer than anticipated. Meanwhile, global equities and commodities exhibit high levels of relative strength, rounding out the top three spots in DALI. Investors seeking capital appreciation might be better off targeting those groups until there is further confirmation that crypto has turned a corner.

In Wednesday’s trading, the S&P 500 (SPX) hit a record high for the 16th time this year. As investors, we’re generally happy to see the market hitting new records. However, if you have money sitting on the sideline watching the market push relentlessly higher while you’re not fully invested can be nerve-racking. We’ve been trained “buy the dip”, “buy low, sell high” so putting money into the market when it’s trading at all-time highs can feel like a bit of a sucker’s bet. After all, a better buying opportunity will surely come along before too long, right?

There is a lot of “common wisdom” in this business, some of it good, some of it not so good and until you start doing some analysis, it can be hard to tell, which is which. So, what about the notion that we shouldn’t buy into a market that’s trading at an all-time high? In order to test this idea, we looked at every trading day since the beginning of 1980 and divided them into two categories – days the market hit a new all-time high (based on intraday high) and days that it didn’t. We then calculated the one-, three-, five-, and 10-year forward returns for each day and averaged them. The results are shown below.

As you can see the results of our study show that over the intermediate-to-long-term buying all-time highs isn’t detrimental to overall returns. In fact, buying on days the market hit a new all-time high outperformed the average for all other days over the one-, three-, and five-year periods. Over the 10-year period, buying all-time high days outperformed buying other days, but the difference was relatively modest at 130% vs. 149%  

Of course, some will still wonder, why would you buy the market at all-time highs when the 10-year average return is better for all other days? But what this argument overlooks is that the time in the market that is sacrificed, especially if waiting for a meaningful pullback. The S&P 500 hit its first all-time high after the Q1 slide on 4/15, and since then it’s gained an additional 4.9% through Wednesday’s (5/6) close.  Two weeks ago, we discussed the merits of going all-in versus averaging into positions and found that, generally, it’s better to go all-in instead of hedging your bets by averaging into exposure. There is a common theme between this study and that one – time in the market typically works in your favor, even if you’re entering at a time when the common wisdom says the market is “expensive.”

As discussed in yesterday’s report, one of the major (perceived) pitfalls or criticisms of momentum strategies is that they often buy assets that are trading at or near record highs. The results of this study are also clear counterpoint to that criticism as over the last 45+ years, buying the S&P when it’s trading near all-time highs has produced strong returns over the intermediate- and long-term.

Daily Option Ideas for May 7, 2026