Bitcoin’s path out of its current bear-market phase is once again being framed by a familiar set of momentum signals: stochastic RSI “bottoming” behavior that traders say has appeared at major turnarounds in past cycles. This time, the focus is on a two-month stochastic RSI indicator reaching (or revisiting) zero—an event one analyst argues has repeatedly marked the end of drawdowns.

Separately, other market participants are pointing to RSI divergences and extreme oversold readings earlier this year, suggesting the market may already be transitioning. However, as always with oscillator-based forecasts, the key question for traders is whether these signals play out with the same consistency as in earlier bear markets.

Key takeaways

• Trader Max Crypto argues that a two-month stochastic RSI “drop to 0” has historically lined up with BTC bear-market bottoms in 2014, 2018, and 2022.
• The same analyst says the bear market is likely over once two-month stoch RSI reaches zero again.
• TradingView data indicates two-month stochastic RSI has recently fallen into sub-30 “oversold” territory, with the current reading cited as 4.81.
• Other traders have highlighted RSI-related setups, including notes that extreme daily RSI readings have previously failed to break lower before rebounds.
• BTC’s move back above $64,000 this month is being linked—by market commentators—to bullish RSI divergences across time frames.

Why two-month stochastic RSI has become the latest “cycle” checklist

In an X post over the weekend, trader Max Crypto made a specific forecast for the end of the 2026 bear market based on stochastic relative strength index (stoch RSI). The core idea is tied to the behavior of a two-month stochastic RSI reading when it hits a new swing low and later crosses in a bullish direction.

Stoch RSI is built from RSI, but it tends to react more directly to recent momentum shifts. In Max Crypto’s view, that responsiveness is exactly why the indicator has served as an effective timing tool when markets have approached major bottoms.

“Every time the 2M Stoch RSI had a bullish cross and dropped to 0, $BTC bottomed,” Max Crypto wrote, adding that this pattern occurred in 2014, 2018, and 2022—and, in his words, “will happen again.”

What matters for readers is the conditional nature of the signal: the claim is not that stochastic RSI alone automatically predicts a bottom, but that the combination of a bullish cross and a subsequent drop to zero has marked turning points in earlier bear-market periods.

Where the indicator stands now: oversold, but not at zero

TradingView data referenced in the article shows that two-month stoch RSI has been sliding into the sub-30 “oversold” zone during March, with a current value of 4.81. The same reference notes that the levels seen recently were last observed just over three years ago—an observation meant to highlight rarity and potential importance rather than to guarantee an outcome.

In other words, the indicator appears to be near where market participants previously became attentive to “bottoming” behavior, but it has not yet reached the specific trigger point Max Crypto associates with bear-market completion.

As a result, traders watching this setup are likely to interpret any further decline toward zero as progress toward the forecast timeline, while a rebound before reaching zero could either reflect an early bottom or invalidate the clean version of the pattern.

RSI divergences and extreme oversold readings add a second layer of timing

Beyond stochastic RSI, the article also points to other RSI-focused analysis that has circulated among traders. The recurring theme is divergence—when price action and oscillator behavior fail to align in the expected bearish way—alongside signals of unusually weak momentum earlier in the year.

One example cited is a trader and investor account (“BitcoinHyper”) highlighting a bullish divergence setup against the S&P 500. While the exact decision framework is not detailed in the provided text, the implication is that correlation-linked weakness may have been less damaging than it looked on price alone.

Another thread comes from trader Osemka, who discussed an especially low daily RSI reading. According to the article, at the start of June daily RSI dropped to around 15—an extreme oversold level that Osemka later described as one of a small set of “extremely powerful selling events.” Osemka’s key point was that there has been at least one case where an RSI oversold extreme did not break lower; instead, price swept the low and then turned.

Osemka connected this idea to historical behavior, noting that such an outcome occurred at the end of an accumulation range in 2015. He then suggested that the present situation is similar in the sense that the market has “only swept the low” on a comparable powerful move down.

This is a useful nuance for readers: oscillator extremes can sometimes be followed by continuation lower, but there are also documented instances where the market uses the low as a liquidity grab before reversing. The current debate among traders is essentially whether BTC is repeating the latter type of bear-market ending behavior.

From $64,000 to the bigger question: are these signals converging?

The article ties these RSI narratives together with BTC’s return above $64,000 this month. It states that the move coincided with bullish RSI divergences across multiple time frames—an alignment that, if it continues to hold, can strengthen the argument that downside momentum is fading.

Importantly, the article does not frame the recovery as a guarantee. Oscillator-based “bottom” calls can be directionally correct but timing can slip, especially if broader risk sentiment or macro conditions remain unstable. That said, the convergence of several independent oscillator themes—two-month stochastic RSI approaching key lows, and RSI divergences appearing across time frames—may be why so many traders are treating this period as decision-heavy.

Earlier commentary referenced in the article also shows how widely these comparisons have been circulating this year. In April, another trader (“Quantum Ascend”) reportedly described BTC’s price behavior as “playing out nearly perfectly” relative to the 2022 bear market, reflecting how closely many participants are watching for structural repetition.

What to watch next

For now, the most actionable watch item from Max Crypto’s thesis is whether two-month stochastic RSI actually reaches zero again after entering oversold territory; if it does, the historical parallel implied by the indicator may gain credibility. Traders should also monitor whether RSI divergences continue to persist across higher and lower time frames—because a late breakdown would be the clearest sign that the market is not repeating past bear-market patterns.

The U.S. Treasury has ordered the freezing of more than $130 million in cryptocurrency linked to Iran, as tensions between the two countries have escalated. On Tuesday, Treasury Secretary Scott Bessent confirmed the action is part of a broader effort to disrupt Iran’s access to proceeds from illicit activity, including through digital assets.

The development comes shortly after blockchain investigator Specter highlighted on-chain activity indicating that Tether had frozen four Tron wallets containing $131 million worth of USDt (USDT). Bessent said the wallets are tied to the Central Bank of Iran, naming the targeted addresses in an X post.

Key takeaways

• U.S. Treasury ordered the freezing of over $130 million in crypto held in wallets linked to Iran, according to Scott Bessent.
• On-chain investigator Specter connected the freeze to Tether’s action against four Tron wallets holding $131 million of USDT.
• Bessent linked the move to the wider U.S. push to restrict Iranian access to illicit financial flows during renewed hostilities.
• The freeze follows a prior action in April, when Tether reported freezing more than $344 million in USDT at the request of U.S. authorities.

Treasury confirms a new freeze linked to Iran

Bessent confirmed on Tuesday that the U.S. government directed the freezing of cryptocurrency held in wallets “tied to the Central Bank of Iran.” He framed the measure as part of an ongoing U.S. strategy to “disrupt and degrade Iran’s illicit financial activities” and to prevent the Iranian regime from accessing proceeds tied to illicit revenue streams.

He also emphasized that the Treasury will continue to “aggressively follow the money,” signaling that additional asset-targeting actions could follow if more wallets are identified through investigations.

Earlier coverage referenced on-chain signals from Specter, which pointed to the specific USDT freeze activity. Specter’s analysis indicated that four Tron wallets were frozen after holding roughly $131 million in USDT, aligning with the figure Bessent cited regarding the U.S. order.

Why stablecoin freezes matter during renewed tensions

The Treasury action underscores how stablecoins, despite being designed to track fiat value, can still sit at the center of sanctions enforcement. When authorities identify addresses connected to sanctioned institutions or networks, freezes can limit the ability to move funds quickly—even if the assets are technically “tokenized” rather than held directly in traditional bank accounts.

In this case, the freeze is tied to hostilities and intensifying U.S.-Iran tensions. The U.S. said it renewed its blockade of Iranian ports, while Central Command announced a new wave of strikes on Iran. Iran’s military, in turn, claimed it carried out drone strikes against U.S. military facilities at Jordan’s Al Azraq Air Base.

That geopolitical backdrop helps explain the urgency of targeting digital assets. For sanctions planners, stablecoins can function as high-speed rails in attempts to move value across borders—making them a logical focus during periods when financial pressure is meant to disrupt procurement networks and operational funding.

A pattern in April and beyond

This is not the first time Tether-related freezing activity has been linked to U.S. sanctions against Iran. In April, Tether confirmed it had frozen more than $344 million in USDT at the request of U.S. authorities, described as an earlier wave of actions consistent with the same enforcement theme: using token controls to prevent access by designated entities.

Separately, Bessent previously said in May that the U.S. has seized around $1 billion in Iranian crypto assets as part of a broader pressure campaign against Iran known as Operation Economic Fury, which launched in March 2025. In a statement in June, Bessent described the operation as targeting foreign procurement networks that support the Iranian military’s efforts to acquire weapons.

Taken together, Tuesday’s reported freeze fits an established trajectory: U.S. authorities identify wallets, impose restrictions through sanctions processes, and then coordinate with market participants capable of freezing stablecoins tied to those addresses.

What to watch next: identification, enforcement, and transparency

For investors, traders, and builders, the practical question is less about whether USDT will “hold its value” and more about how sanctions compliance and wallet targeting continue to affect where stablecoins can flow. These freezes can quickly reduce the ability of certain wallets to access funds, and they can also influence how analysts and market participants assess wallet-level risks associated with regulated enforcement.

Going forward, readers should watch for whether additional Iranian-linked wallets are identified through on-chain investigations and whether further freezes are publicly confirmed by U.S. officials and stablecoin issuers. The key uncertainty remains how widely the freeze net expands—both in terms of the number of wallets and the total value affected—as U.S.-Iran tensions continue to evolve.

Zcash (ZEC) gained much popularity as it moved toward the $505 region but faced significant selling pressure. The move was met with a retreat as traders decided to take profits in one of the most critical psychological resistance regions on the charts.

The development caused controversy among traders regarding the cryptocurrency’s future. Some suggest that the rejection indicates reduced momentum after the fast-moving advance, while others say the retracement is natural after the gains.

However, despite the negative move, ZEC remains above the support levels and the overall recovery setup remains intact. In any case, the following trading sessions will define which side wins.

Zec Retreats Amid Major Resistance Rejection

After reaching around $505, ZEC moved down toward the $466 level due to an increase in profit taking. The high number of leveraged longs at the resistance level provided additional selling pressure when prices reversed course.

This drop in price triggered numerous liquidations and helped market makers take advantage and push prices down temporarily. Soon after, buyers emerged at the $440 support level to prevent the fall in prices beyond that.

This support level is crucial for the existing market structure, as a sustained breach would give an impetus to the bears to move further downward. On the other hand, a successful defense of this level means buying interest still exists.

Social Sentiment Falls While Confidence Rises

The market’s mood has changed significantly over the past few weeks as well. As per Santiment, there was an uptick in social activity around Zcash after it dipped below $362 amid the revelation of the vulnerability of the Orchard shielded pool. Daily social mentions exceeded 1,100 in those days as traders responded to the risk.

On the other hand, social sentiment fell dramatically as the price recovered by almost 29%. Low social activity does not necessarily indicate a bearish sentiment. In most scenarios, less chatter indicates a relatively calm market and fewer panic sales.

Ironwood Network Upgrade Improves Future Prospects

Among the major reasons to be optimistic about Zcash’s future is the scheduled Ironwood network upgrade.

According to developers, the Ironwood network upgrade will be implemented in several days, bringing enhanced mathematics-based proof of concept designed to protect against unnoticeable forgery in Zcash’s privacy pools.

The scheduled network upgrade comes after its emergency fix for the issue related to the vulnerability of the Orchard shielded pool.

Investors find the network upgrade important for Zcash’s future prospects, regardless of current price dynamics.

Technical Indicators Highlight The Most Critical Resistance Level

Technical analysis indicates that ZEC is set to face another crucial challenge.

The first resistance level lies in the range of $480 to $490. It incorporates past horizontal resistance, the upper Bollinger Band, and the 0.786 Fibonacci retracement level.

According to analyst Ardi, the potential to break past $480 on the daily chart can give bulls hope of reaching $500. A further breakdown below this level may provide an opportunity to target the next resistance level at $540.

CryptDollar, another analyst, has also pointed to this resistance level as the most critical one to watch before confirming the continuation of the latest recovery trend.

Momentum Indicators Still Favor Bulls

While there are no definitive signs yet, several signals support the current trend.

Chaikin Money Flow is still positive at 0.13, indicating capital inflows into the asset. In addition, the Aroon Up indicator remains above 92%, meaning the uptrend is still alive.

TradingView’s Moving Average still shows a Strong Buy signal despite several neutral momentum oscillators.

Liquidation charts can also be helpful for gauging future volatility. Large short positions are formed in the range of $480 to $500. As a result, a breakout of the range will likely bring more momentum to the next leg higher due to short liquidations.

The U.S. commodities regulator has moved to prevent Kalshi, a registered prediction market platform, from reversing Michigan trades—sparking fresh legal friction between federal oversight and a state court order. The dispute centers on whether Kalshi must unwind already executed sports betting contracts for Michigan users while litigation over Michigan’s sports betting laws continues.

On Tuesday, the Commodity Futures Trading Commission (CFTC) ordered Kalshi not to comply with the Michigan order and instead continue operating. The clash follows an earlier ruling on June 29 by Ingham County Circuit Court Judge Rosemarie Aquilina, who directed Kalshi to stop offering sports betting contracts to Michigan users during the ongoing case.

Key takeaways

• The CFTC says canceling already executed prediction market trades would disrupt market certainty and create a cascading effect across derivatives markets.
• Kalshi argues the situation forces it to choose between conflicting obligations: comply with a state court directive or follow federal regulatory requirements.
• The controversy underscores an ongoing jurisdictional tension between the CFTC and multiple state regulators regarding prediction markets.
• CFTC Chair Michael Selig warned that the agency will continue legal action against states that attempt to impose penalties on CFTC-registered exchanges.

Michigan judge’s order vs. federal directive

Michigan’s court case began with a directive that targeted Kalshi’s ability to provide sports betting contracts to residents of the state. According to Cointelegraph reporting, Judge Aquilina ordered Kalshi to cease offering those contracts to Michigan users while the lawsuit proceeds over whether Kalshi’s offerings violate state sports betting laws. Earlier coverage from Cointelegraph described the scope of that order and the legal context surrounding it.

But on Tuesday, the CFTC intervened. In a press statement, the regulator ordered Kalshi not to comply with the Michigan directive and to continue operating despite the state order. The CFTC press release frames the issue as one of maintaining federal authority over registered entities and executed derivatives contracts.

Kalshi says it unwound trades—and now faces contradictions

Kalshi’s response highlights the practical dilemma regulators rarely address directly: companies caught between courts can end up violating one authority while trying to obey another.

In a statement posted on X, Robert DeNault, Kalshi’s head of enforcement and legal counsel, said the company is “disappointed” and described the federal action as placing Kalshi in an “impossible position.” DeNault’s statement on X argues that Kalshi already followed the Michigan court order by unwinding the trades, but the new CFTC directive appears to contradict that requirement.

DeNault’s wording underscores the core problem: Kalshi believes it is being pushed into a compliance conflict, where it may be required to reverse actions taken under state instructions while also meeting federal regulatory expectations.

Reuters reported that Kalshi is reviewing the CFTC’s order and considering its next steps. According to Reuters, the company is weighing how to respond given the opposing directives.

Why the regulator says “canceling” is a market-breaking precedent

The CFTC’s position is grounded in the mechanics of derivatives contracting. The regulator argues that canceling trades already executed is not just a procedural change—it threatens contract certainty across the marketplace.

In the same dispute framing, the CFTC characterized cancelation of executed trades as unprecedented and potentially destabilizing. The regulator’s message is that prediction markets operate through contractual certainty, and that undermining that certainty would ripple outward beyond any single platform.

The CFTC also emphasized that it will not allow states or state courts to pressure registered entities into violating the Commodity Exchange Act and CFTC regulations. That argument is aimed directly at the core tension at the center of the Michigan case: whether states can effectively override federal rules through injunctions and court orders applied to an exchange that is already registered with the CFTC.

Broader conflict: federal authority vs. state-by-state attempts

This is not presented by the CFTC as an isolated disagreement. The regulator has repeatedly argued that prediction markets fall within the federal scope when they are run through CFTC-registered structures.

As the dispute is framed, Michigan is described by the CFTC as the first state to attempt interference with executed derivatives transactions through a court order. That characterization matters because it suggests the CFTC views the issue as moving from “licensing and legality” arguments—traditionally handled at the state level—into the domain of how executed federal derivatives contracts must be honored.

During an appearance on Fox Business, CFTC Chair Michael Selig said it is “critical” that the regulator maintains its authority over prediction markets. Selig also stated that the agency has sued nine states and indicated it would continue to challenge states that attempt to impose criminal or civil fines against CFTC-registered exchanges. According to Selig’s remarks, the CFTC’s stance is that state actions cannot be allowed to erode the federal regulatory framework for these markets.

For investors and market participants, the practical implication is that prediction market compliance may remain a moving target. Even where a state court order appears clear, a federal regulator may step in to enforce a different standard. That dynamic increases uncertainty for platforms operating across state lines and could affect how traders evaluate jurisdictional risk when participating in events-based contracts.

What to watch next is how Kalshi navigates the contradiction between the Michigan directive and the CFTC’s order—and whether additional courts or appeals clarify which obligations control when state and federal requirements diverge for already executed derivatives contracts.

This is Part 4 in the technical article series about Bitcoin covenants by Cointelegraph Research. To read the previous article, click here. 

The following opcodes do not independently implement full covenant functionality. Instead, they are building blocks for constructing covenants when combined with other opcodes or script elements.

OP_CHECKSIGFROMSTACK (OP_CSFS) and OP_CAT

OP_CSFS is a proposed opcode that would allow Bitcoin script to verify signatures over arbitrary messages supplied on the stack. It is different from OP_CHECKSIG, which verifies signatures over the spending transaction according to the active SIGHASH mode. By enabling signature verification for data other than the serialized transaction details, OP_CSFS enables a broader class of constructions, including oracle-based scripts where an external party signs off-chain messages that represent real-world events. For example, a trusted oracle could publish Schnorr signatures over messages that encode external outcomes, and an OP_CSFS-based script could condition payments on the presence of a valid oracle signature. 

On its own, OP_CSFS does not implement covenants. It can authenticate external data, but it does not bind that data to the structure of the spending transaction. That binding requires OP_CAT.

OP_CAT is a proposed opcode that enables the concatenation of two values on the script stack to form a single byte sequence instead of two distinct ones. When combined with OP_CSFS, it allows the script to assemble selected transaction fields into a canonical message and verify that a provided signature commits to that message.

OP_CSFS and OP_CAT taken together can perform introspection by compelling the spender to provide transaction details on the witness stack. If both OP_CSFS and OP_CHECKSIG succeed for the same signature, it proves that the correct transaction details have been passed on to the witness stack and can be further reasoned about. By checking the transaction against a predefined template, a covenant construction, similar to OP_CTV, can be enforced. Two minimal assemblies show how this works:

OP_CAT + Schnorr Tricks

Using OP_CAT, covenant-like constructions can be enforced under Taproot without OP_CSFS by exploiting how Schnorr signatures interact with the Taproot sighash rules defined in BIP 341. The construction repurposes OP_CHECKSIG which is ordinarily used to authenticate ownership of a private key, to a transaction introspection tool.

A schnorr signature is a pair ⟨R, s⟩. Under normal circumstances, this schnorr signature is generated by selecting a secret nonce k, deriving the point R = kG, and computing the signature value s as a function of the message hash and the private key. The verifier then checks the signature pair ⟨R, s⟩ against a public key P and the message being signed. The randomness of k ensures that s is unpredictable and non-reproducible without knowledge of the private key.

The introspection trick works by eliminating randomness by fixing some of these variables in advance. Instead of choosing R randomly during signing, the script commits to a predetermined value of R and to a fixed public key P. Because Schnorr verification follows a deterministic equation, it becomes possible to construct these values so that the signature scalar s must equal a hash of specific transaction parameters.

The spender provides R and s on the witness stack. OP_CAT concatenates them into the signature pair ⟨R, s⟩ in the format OP_CHECKSIG expects. The script verifies this against the hardcoded public key P. Because R and P are fixed to the base point G, OP_CHECKSIG will only accept the pair if s equals the SHA256 hash of the actual transaction data computed by the protocol. The spender cannot fabricate an s that passes OP_CHECKSIG unless it genuinely reflects the real transaction data. The spender must grind the transaction data until its SHA256 hash ends in a specific byte, which takes roughly 256 attempts on average and adds negligible cost. 

In this way, OP_CHECKSIG is no longer used to authenticate ownership of a secret private key but instead to enforce that the transaction matches a specific template.  The expressiveness is broadly comparable to OP_CTV.

Because this approach depends on Schnorr signatures and the taproot sighash algorithm, it applies only to SegWit v1 outputs and does not extend to SegWit v0 outputs which uses the BIP-143 digest and ECDSA signatures.

In our next article we will commence our discussion of OP_CCV, which is even more capable than OP_CSFS and OP_CAT combined.