While European equities have significantly outperformed US stocks in recent months, this divergence may be nearing its limits. A weaker dollar could flip the narrative by boosting US equity attractiveness and multinational earnings, setting the stage for capital to rotate back into American markets.

Inside today’s report, we break down the key macro, crypto, and relative strength signals shaping market structure right now. You’ll find 12 charts including Bitcoin long and short trading setups, plus a special coin of the week with actionable trades and risk guidance.

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The dollar tumbled over the past 48 hours as investors recalibrated Fed expectations following weak retail sales data that showed consumer spending stalled in December. While the Fed's own projections show minimal easing ahead, markets are growing increasingly concerned about slowing growth, particularly after reports that Chinese regulators advised financial institutions to reduce US Treasury holdings. This currency weakness suggests investors should expect sustained dollar depreciation throughout the year.

US stocks are at their weakest relative performance in two years, with the S&P 500 down 1.4% in February while Europe's Stoxx 600 surged 3.3%. However, this divergence may be reaching its limits as the dollar's recent weakness could actually set the stage for renewed US equity outperformance, as a weaker currency makes American stocks more attractive to international investors and boosts the earnings of US multinationals.

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European markets have enjoyed a strong run, outperforming US stocks thanks to improving fundamentals in financials and industrials, but the trade is getting crowded after months of relative strength. With valuations no longer at the steep discounts that made Europe compelling earlier, and the dollar now declining sharply, the conditions that drove capital out of US tech may be reversing. Investors should watch for rotation back into American equities as currency headwinds turn into tailwinds and stretched European valuations could limit further upside.

Beneath the surface, US market breadth is actually improving, with the equal-weight S&P 500 hitting record highs around 8,000 even as the traditional index trades sideways. Investors are rotating out of concentrated mega-cap tech positions into small and mid-caps that have lagged for years. This broadening reduces dangerous concentration risk..

The key takeaway: while Europe has enjoyed a strong run, the dollar's weakness and improving US market breadth suggest conditions may be aligning for money to rotate back into American equities. Speculative assets like crypto remain under pressure, but the broadening rally beneath the surface of US markets points to healthier foundations for the next leg higher.

Bitcoin appears to be heading lower again despite its relief bounce on Friday, as price was unable to reclaim the $72,000 technical level and faced rejection on Monday. From there, BTC moved lower again, currently trading around $66,800 and closing in on the next lower technical level at $65,500.