Summary Bitcoin's future is uncertain, but historical data shows extreme fear often signals solid entry points for long-term investors. Technical analysis using the 14-period RSI could indicate that recent pullbacks are more likely than bear markets, despite current market fears. Fundamental analysis could suggest that Bitcoin's market cap vs. realized cap indicates no imminent sell zone, with a low probability of sellers dominating. Of course, these are statistical patterns—and there's always the exception to the rule. That's why risk should always come first. "Bitcoin will go to zero."A great way to kick off my BTC update. But no, that's not my statement, it's a recent quote from Eugene Fama on the Capitalisn't podcast, which has been generating a lot of buzz lately. I'm not surprised to see new apocalyptic opinions emerge, this tends to happen when the Fear & Greed Index drops back into extreme fear territory. Will Bitcoin go to zero? I don't know, that's a question you can answer yourselves, since the crypto market's value, until proven otherwise, is set by investors, not by commentators. Luckily, investors (like myself) are quite predictable. That's why, for me, Bitcoin statistics have been a better teacher than some of the most respected voices in finance. So instead of asking "Will Bitcoin go to zero?" I think a better question is: "What phase of the cycle are we in?" Some Predictions to Be Revised... I work in traditional finance, and I can assure you, there has always been strong skepticism toward Bitcoin. I still remember back in 2017, when BTC-USD hit $20,000, a wave of emotionally crushing predictions followed one after another, alongside a truly brutal bear market. It all started with Ray Dalio , who stated that Bitcoin was nothing more than a bubble. Soon after, other big names from traditional markets joined in, Jamie Dimon called it a fraud , and Larry Fink criticized it just as harshly. Now imagine the confidence level of an investor witnessing the Bitcoin collapse while being flooded with bearish takes from some of the world's most respected investors, all pointing fingers and saying, "I told you so." Would you have imagined that less than 6 years later, BTC would be trading at 5x that value? And not only that, the very people who criticized it back then are now among the biggest participants in the market. Just think about BlackRock . Why am I bringing this up? Simply because I believe these facts should make readers rethink the weight of opinions, and instead, shift their attention to evidence. Opinions shift, as we've seen in recent years, but patterns in data tend to repeat, excluding statistical outliers. So let me return to the opening question:"What phase of the cycle are we in?" Personally, I answer by analyzing 3 categories: Sentiment Weakness I only look at the Fear & Greed Index , simple, but highly effective. I'm sure most of you are familiar with it: it's based on a combination of price momentum, volatility (BVIV index), the put/call ratio on the derivatives market, and market cap (with the SSR ratio). In short, it pools together a set of highly relevant data and delivers an incredibly simple output: the lower the score, the weaker the sentiment. When you overlay the Fear & Greed Index with BTC's price chart, it becomes clear that this would have been a great contrarian indicator for long-term BTC investors in the past. In other words, zones of extreme fear have historically represented solid entry points.(Not necessarily the absolute bottom, but very decent entries nonetheless.) So, the fact that pessimistic statements about the "death of Bitcoin" are going viral again doesn't surprise me at all. Fear & Greed index focus areas (TradingView) Technical Weakness Another narrative I often like to use is the technical one, also very simple to monitor, yet statistically powerful for patient investors. Patient because the most reliable statistical signals occur on a weekly timeframe (exclusively). And even here, using nothing more than what a typical technical analyst would use every day, I believe the 14-period RSI is a very telling indicator of Bitcoin's price narrative. As of now, BTC recently touched the 50-point RSI threshold, before bouncing back, coinciding with the symbolic $80,000 level, a major psychological barrier. Looking at recent history, out of 7 similar RSI setups, only 2 turned out to be the start of a bear market, while 5 were simple pullbacks, continuation zones, in other words. Every correction always feels like the start of a bear market, when in reality, bear markets are harder to identify on Bitcoin's price chart than pullback zones. RSI index focus areas (TradingView) Fundamental Weakness This is, without a doubt, the section that most analysts tend to focus on, and it's often what leads pessimists to say things like "Bitcoin will go to zero." I get it, it's not easy to quantify Bitcoin's fair value. I mean, what is Bitcoin, really? A technology? A sort of digital gold? Whatever it is, it doesn't generate earnings, it has no industrial use, but it does have a market. So what am I supposed to do to get some sort of footing to understand where we are at from a fundamental's basis? And here, I generally use hint indicators such as MVRV or Z-Score. I don't know what Bitcoin's true value is, but I know there's a market that believes in it. This is why I think comparing market cap to the realized cap can give us a rough grace note on where the market thinks Bitcoin's fair value might be. Right now, we're sitting at 2 on the Z-Score, so we're not in a "buy zone" (which historically is below 1). Are we in a sell zone? Historically, in all previous cycles, the "sell zone" has triggered at 7 points or higher. So, with an MVRV at 2, there's very little statistical probability that sellers will win over buyers at this stage. MVRV index focus areas (TradingView) Risk The past is not indicative of future results, it's written in every disclaimer, and I fully agree with it. While statistical evidence can help guide informed decision-making, there's always that "exception that proves the rule." For example, even a 90% probability still means 10 out of 100 cases where the expected outcome doesn't occur, and when we're talking about money, that's not something to take lightly. And that's exactly the kind of "risk" that comes with data-driven decisions. My Opinion I'm not a rigid Bitcoin holder, I simply appreciate its decentralized nature and analyze it like any other asset, following its narrative across three key dimensions: sentiment, technicals, and fundamentals. Analyzing these 3 dimensions from a statistical point of view, I don't see any valid reason to be bearish on Bitcoin. Nor does the current context appear nearly as dramatic as the doomsday scenarios predicted by some. Even today, Bitcoin still seems like it's here to stay.
