The headlines write themselves during a downturn: liquidations top a billion dollars, Bitcoin's slide deepens, prices appear to be in freefall. Meanwhile the broader stock market keeps printing all-time highs. The natural question follows almost automatically — why would anyone buy crypto right now when equities are doing this? But the more interesting question hides inside that one. If virtually everything is at record highs except Bitcoin, is the crypto market quietly the most undervalued market in the world? Or is the bloodbath just beginning? The answer, I'd argue, depends entirely on whether you understand what a bottom actually looks like while it's forming.
The Anatomy of a Bottom
What we are living through is not a collapse so much as a process. We are in a bear market, and bear markets have a recognizable shape. Price falls hard, bounces, then falls again — often after tracing out a pattern known as a bear flag, a formation that statistically tends to break to the downside. That breakdown is not a guarantee, but probability-wise it is something worth respecting. The recent breakdown was a repeat of an earlier one, and the warning signs were visible months in advance. None of this is exotic. It is simply how bottoms get built.
The single most reliable signal here is the 200-week moving average. In 100% of Bitcoin's major bear markets — four out of four — price has come down to test, touch, or briefly breach that level, and historically that touch has marked the cycle bottom. The bear market following the 2022 FTX collapse breached it. The 2018–2019 bear market touched it and then breached it during the COVID panic. The 2015–2016 bear market touched it briefly and breached it as well. A common rhythm appears: a first touch, a small fake-out, then a breach. So when people scream that this is the end of the world, the honest read is the opposite. Coming down to the 200-week moving average is normal. It has happened in every single bear market. There is nothing new about it.
The current bounce is the second major bounce of this bear market. Price almost touched the 200-week moving average on the initial crash, and it remains highly likely — though never guaranteed — that we retest, sweep past, or even breach it again. To be clear, I am not claiming this exact level is the bottom. I am saying this is the texture of a bottom. Expect months of this: choppy consolidation, boring sideways grind, apathy, and a slow loss of interest. The same thing always happens.
Reading the Volume and the Fear
The volume profile reinforces the story. The heaviest trading activity occurred at the levels we have now returned to — the same zone of boring, apathetic consolidation that ran from right after the Bitcoin ETF approvals up until the presidential election. Within that profile sits the point of control: the precise price where the highest trading volume took place. That level represents fair value, the price where both buyers and sellers were most active, and traders treat it as a magnet that flips between support and resistance. The magnet did its job — price bounced off the exact point of control. Right now that level acts as support. If it breaks beneath, it becomes resistance, and I'd expect price to touch it again and possibly breach it, scaring out buyers and breeding the very apathy that pushes weak hands to sell.
Sentiment tells a parallel and more encouraging story. The first time price dipped just above the 200-week moving average in this bear market, the Fear and Greed Index registered deep, incredible fear. Now, dipping toward those same levels again, the reading sits merely at "fear" rather than terror. The market is acclimating. When price drops to a level and the fear no longer spikes, it means the sellers — the weak hands — have largely already sold. They dump the moment price first hits these levels; their absence on subsequent dips signals exhaustion. The last bear market showed the identical sequence: a hard dip into extreme fear, a stretch of choppy consolidation with fake-outs, a lower dip that failed to reignite extreme fear, and a market that simply bounced between extreme fear and ordinary fear. That oscillation was the tell. Fewer sellers remained, prices grew familiar, and buyers were finally able to step in. That is how bottoms are formed.
It comes down to something simple. Whenever Bitcoin trades at, near, just under, or just above the 200-week moving average, that has been a great buying opportunity, because that is roughly fair value. When price sits high above the 50-week moving average, the market is getting overhyped — and it always reverts to the mean. Right now we are reverting back toward the mean, and that is normal.
A personal caveat belongs here: I am biased and long-term bullish, so weigh that accordingly. But I genuinely do not think it is wise to sell Bitcoin near the lows in order to chase the stock market near its highs. I am a value investor. I look for value, and value lives near the mean — or below it.
Three Mega Trends That Outlast the Dip
Price action explains the present. Three structural forces explain why I am confident crypto's best assets will be meaningfully higher a year or two from now.
Regulation
The first is regulation. The Clarity Act has officially been reported out of the Senate Banking Committee and placed on the Senate legislative calendar. The committee voted to advance the bill on May 14th; as of June 1st that process is complete, and the legislation is now eligible to be scheduled for consideration by the full Senate. The next major hurdle is a floor vote. The sequence so far: introduced, committee hearings, markups — the big milestone a few weeks ago — and a bipartisan passage through the Senate Banking Committee, then placement on the Senate calendar. Roughly four more steps remain before a potential presidential signature, and bipartisan support is still intact. Once the United States finally regulates crypto, it is hard to argue that quality coins won't be higher a year and a half to two years later.
Tokenization
The second mega trend is tokenization. The SEC and the traditional markets are tokenizing everything — across Ethereum, across Solana, across the ecosystem. This is not just stablecoins; it is the broader move to bring traditional business assets on-chain, and major institutions have explicitly identified it as one of the mega trends they want to attach their business to, positioning and investing to benefit from these large market cycles. The progress is measurable: the total market cap of on-chain tokenized stocks has reached a record 1.6 billion dollars, a 240% increase year-to-date, even as equity markets staged a historic rally. The SEC in particular is championing this, with reports that it is preparing a framework for trading tokenized stocks. Prices may be down, but the infrastructure is being built out aggressively — which tells me the asset class will be fine, and likely much bigger, a few years out.
The Year of AI IPOs
The third force is what is actually pulling attention away from crypto right now: this is the year of AI IPOs. SpaceX, OpenAI, and a wave of hot listings — alongside existing stocks going parabolic — are absorbing the capital and excitement that might otherwise flow into crypto. That is precisely why volume in crypto looks thin. But everything reverts to the mean, including hot stocks. Bitcoin commanded enormous attention, then reverted to its mean and ground higher; the same gravity applies to equities.
History offers a template. The Coinbase IPO launched into the hot, NFT-fueled market of 2021, dipped, popped, and then over the following year or so found its fair value. Robinhood did the same — a hot launch, a run-up, and a reversion to fair value a year and a half to two years later. I have no idea what SpaceX or OpenAI will do, and I genuinely hope they pop hard; this is an exciting year for the stock market. But product-market fit plus mean reversion is the pattern that matters. When a strong asset reverts to its mean — or better yet, gets undervalued below it — that is the moment to build a position and hold for two to five years.
The Takeaway
Stitch these threads together and the picture clarifies. The price action is textbook bottoming behavior, not catastrophe. Sentiment shows seller exhaustion rather than fresh panic. And the structural backdrop — regulation advancing through Congress, tokenization being institutionalized, and a temporary diversion of attention into AI listings that will themselves revert to the mean — all point in one direction. The mega trend is not going away.
The crowd reaction is predictable: dip down, breed apathy, and convince people to sell their crypto and pile into AI. But selling fair value to chase record highs has rarely been a winning trade. The hardest discipline in any bear market is recognizing that the boredom, the chop, and the fear are not signs of failure — they are the raw material out of which bottoms are made.