Weekly Engine #107

W2 Aug 2026

GM/GN.

The Coldcard vulnerability has already led to the theft of 1,367 BTC worth $89 million from 4,585 addresses

Coldcard firmware released since March 2021 mistakenly used a predictable software PRNG instead of a hardware random number generator when creating seed phrases. As a result, the seed phrases appeared random but were generated from a limited set of possible combinations that can be searched offline without access to the device itself.

The risk affects not only the Mk3, but also seed phrases created on the Mk4, Mk5, and Q before patched firmware was released. Importing an old seed phrase into a Ledger, Trezor, or another wallet does not solve the problem because the seed phrase itself is vulnerable.

Users who created a seed phrase on affected firmware should consider it compromised. They need to install patched firmware or use another trusted device, create a completely new seed phrase, send a small test transaction, and transfer the remaining balance after it is confirmed. The old seed phrase should be considered permanently unsafe and never used again.

Rumors of Strategy selling $5B in BTC

As a reminder, the BTC Monetization Program was launched on June 29. It allows the company to sell BTC when necessary to replenish its dollar reserve, pay dividends and interest, and repurchase MSTR shares and preferred securities. The program sets no mandatory sales volume and has no fixed term. The rumors of $5 billion in BTC sales were likely produced by adding together potential reserve requirements, payments, and buybacks, but the officially published documents contain no mention of such a sale.

I consider Michael the captain of the Bitcoin ship, but the company no longer operates under the principle of “never sell.” For Strategy, BTC is a source of liquidity used to service a complex structure of debt, dividends, and buybacks, and the romantic version of the story is over. Strategy has become an unconventional financial machine. We will know whether there are any additional sales as soon as official 8-K filings appear. Everything else is just the circulation of rumors.

⚠️ This week, financial markets were discussing the situation involving Situational Awareness, the hedge fund founded by former OpenAI employee Leopold Aschenbrenner. Over the summer, the fund, whose portfolio had grown to $45 billion, became one of the most criticized in financial circles. In essence, it made a concentrated bet on AI and amplified it with leverage. When stocks began to fall, margin calls forced the fund to sell most of its public portfolio, and its July drawdown reached 67%.

It must be acknowledged that the week was extremely unfavorable: the Fed kept rates unchanged, the Coldcard vulnerability came to light, rumors emerged about possible additional BTC sales by Strategy, the risk of a correction in the AI sector increased, and the continuing escalation in the Middle East kept energy prices elevated. Together, all of this creates an environment in which cash is expensive, confidence is weaker, and markets are more sensitive to any negative trigger.

Yesterday on X, I published an updated Price Performance model with an additional Median Cycle Trajectory calculation. Let us look at what has happened in the market over the past 24 hours. As of August 2, 2026, Bitcoin is trading at $63K, 50% below the October 2025 cycle peak.

The median trajectory of the previous three cycles for the same number of days after the peak now points to $44.5K, compared with $45.3K yesterday. This means the current price is 42% above the historical scenario, so Bitcoin is still holding up considerably better than in previous cycles. The $44.5K level is not a target and does not mean the market will necessarily return to it, but it shows that the current cycle is unfolding much more gently than the historical scenario and retaining relative strength despite the mounting pressures I wrote about today.

🔸

Now to the main point - the weekly market review. What is the market showing, which signals have been triggered, what new catalysts have emerged, and what verdict does the Weekly Engine give on Bitcoin right now?

The full analysis is below. 👇