Oversold Signals Are Getting Loud, But Hard to Frame Today as Immediately Constructive

Discussed in today’s video:

• Oversold Indicators Are Extremely Stretched: Bitcoin’s rolling 30-day return is in the 6th percentile since 2020, the 7-day return is in the 3rd percentile, and its deviation from the 50-day moving average has reached a z-score of roughly -2.8. These readings have only appeared during major stress events and historically tend to coincide with exhaustion in selloffs and the setup for multi-week bounces.
• ETF Holders Capitulate: Spot Bitcoin ETFs have seen >$4 billion dollars of net outflows over the prior 30 trading days, rivalling prior capitulatory periods.
• Perps Market Still Looks Complacent: Funding remains positive, and coin-denominated open interest has returned to pre 10/10 levels. Ideally, these would clear before a durable bottom.
• Today’s Weakness Was Macro Driven: I speculated that crypto initially reacted to DAT headlines, but ultimately we were just front-running an equity selloff triggered by skepticism around AI CapEx sustainability, and potentially a “Fed Mistake.”
• Equity Breakdown Could Present Further Headwinds: Weak equity price action would limit crypto’s ability to bounce in the immediate term.
• Crypto Usually Bottoms First: If equities grind lower but BTC begins to outperform on a relative basis, that would likely signal a durable low forming.

Tickers in this video: BTC -7.44%