- What happened & why Bitcoin slid to a fresh 4-month low near $61k, down roughly 13% on the week. The sell-off accelerated after Strategy (MSTR) trimmed part of its BTC holdings, denting investor confidence and triggering broad de-risking across cryptoassets.
- Sentiment Our Cryptoasset Sentiment Index dropped to -1 standard deviation - its most bearish reading since the February 5th capitulation - firing a contrarian buy signal. Historically, sentiment extremes like this tend to mark points of maximum pessimism rather than the start of sustained downtrends, leaving risk-reward skewed asymmetrically to the upside.
- Outlook Valuations look increasingly compelling: the Composite Valuation Index has fallen to its 8th percentile, and Bitcoin's Mayer Multiple versus equities sits at extreme lows. Key support clusters around the 200-week moving average and 50% Fibonacci retracement ($61k–$62k), with the Realised Price (~$54k) as the next major floor. While deeper levels near $47–49k remain a tail risk worth preparing for, current pricing suggests Bitcoin is trading at historically depressed levels. Markets, however, must be assessed as they are, not as investors expect them to be.
It has been a bruising week for bitcoin and cryptoassets. Bitcoin tagged a fresh 4-month low of $61k overnight and is now down around 13% week-to-date. The slide gathered momentum after Michael Saylor's Strategy (MSTR) trimmed part of its BTC holdings - a move that clearly rattled investor confidence and accelerated the de-risking we have seen across cryptoassets.
The question is whether the selling is overdone. Our in-house Cryptoasset Sentiment Index has just triggered a contrarian buy signal, dropping to -1 standard deviation and printing its most bearish reading since the capitulation on 5 February. Historically, sentiment extremes of this kind tend to mark points of maximum pessimism rather than the start of a sustained downtrend, and from our perspective the risk-reward has already turned quite asymmetric to the upside.
This is consistent with the recent Bitwise CIO Memo, which likewise flags valuations as increasingly compelling.
In addition, our Composite Valuation Index, which combines both technical and on-chain measures, has fallen to its 8th percentile. This highlights relative undervaluation when benchmarked against historical price action and on-chain valuation levels. More detail on the construction of the model can be found in the full report here.
Valuations have not fallen as deeply as they did during the February 5th capitulation. This raises two possible interpretations. First, further downside remains possible, as valuations still have room to compress. Second, the market may be forming a higher low across valuation structures, suggesting early signs of investor exhaustion. However, this would require further time and confirmation before being considered a durable trend.
On a relative basis, Bitcoin's Mayer Multiple against the equity complex is now at extreme lows, highlighting the extent to which Bitcoin has already de-rated relative to traditional risk assets and the current divergence underscoring their present relationship.
_thumb_2x.jpg "Mayer Multiple 4YRollingZScore Violin (BTC+Macro)")
To help navigate further uncertainty and downside risk, we can consult several key pricing levels. Bitcoin has found temporary support at the 200-week moving average around $61k, while the Realised Price, which represents the average acquisition price of market participants, sits near $54k.
Both levels have repeatedly provided important support during prior bear-market phases, suggesting that investor behaviour around this zone will offer valuable insight into whether the current drawdown is approaching a more mature stage.
Furthermore, the 50% Fibonacci retracement from the ATH sits at $62k, providing further confluence with the aforementioned pricing levels. In the event of a loss of the Realised Price, the 61.8% golden ratio retracement at $47.6k may come into consideration as a deeper downside reference.
This aligns with the Long-Term Holder Realised Price, which measures the average acquisition price of mature investors who have held their coins for more than 155 days, and currently sits at $48.8k.
While we expect the Realised Price region to provide meaningful support and do not view a move toward these deeper levels as the base case, it remains prudent to assess downside scenarios probabilistically and remain prepared for more extreme outcomes.
Current valuation levels suggest Bitcoin is trading at historically depressed levels, even as further downside risk remains possible.
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