Summary Bitcoin remains 45% below its all-time high despite broad asset rallies, presenting a contrarian opportunity. Liquidity has rotated between assets, with AI and commodities outperforming, but BTC may be next as the cycle shifts. Technical analysis suggests BTC could reach $40,000, with a scaling-in strategy justified at current and lower levels. I expect a significant shift in crypto sentiment within six months, making now an attractive entry point for accumulation. Thesis Summary There’s been bubble talk for quite some time, but there’s one asset that’s been missing the rally: Bitcoin ( BTC-USD ) While AI has been making the most headlines, we’ve also seen new highs in commodities, and now even quantum stocks are catching a bid. Arguably, most assets are benefitting from favorable monetary and fiscal conditions. And yet the one asset explicitly designed for this environment, Bitcoin, remains roughly 45% below its all-time high. Perhaps it’s because Bitcoin peaked too early, back in 2025. Or perhaps it’s simply because investors have lost interest. In any case, the question now is whether Bitcoin is a buy at these levels, and the answer is still yes. The Everything Bubble is real. It just isn't Bitcoin's turn yet. The Everything Bubble; Just Not Everything At Once Let's start with the obvious. Asset prices are high across the board The U.S. stock market continues trading at record valuation levels as evidenced by the Shiller PE ratio. Shiller PE (Multpl) The truth is that over the last two years we have seen very strong performance in different assets at different times. Capital has rotated and shifted very fast between different pockets of the market, not just AI. BTC, SLV, QQQ and SOX ( TradingView ) Bitcoin, in fact, was one of the earlier assets to peak back in 2025, during the height of Crypto Treasury companies and the narrative around Bitcoin legislation. Then while Bitcoin dropped below $100,000, Silver began to catch a huge bid, with the price more than tripling in a month. Then we got an explosion in semiconductors ( SOX ), as the AI narrative has gained momentum once again. Why AI Is Winning The Liquidity War Ultimately, liquidity has cycled from one spot of the market to another, though AI has certainly been the biggest winner. Earnings expectations (LSEG) We can see that right now, AI is also benefiting from strong earnings, yes, and also strong earnings expectations, as analysts keep revising their estimates higher. Even speculative bubbles that reach a fever pitch have some basis in fundamentals. The Silver squeeze started with trade restrictions, and as demand from solar and other areas heated up. And AI is backed by very strong earnings, at least for now. Is It Time To Buy Bitcoin? But, as history shows, every chart that goes parabolic ends up coming back down, without exception. I do think the AI trade is getting frothy and crowded. Does that mean Bitcoin could be taking the spotlight next? From a fundamental perspective, we have some challenging months ahead. As I have laid out in previous macro pieces, inflation could become a problem, and the new Fed Chair may struggle to get a consensus on rate cuts. And while the U.S. is trying to maintain ample liquidity, China’s PBoC is moving i n the opposite direction. The fundamentals for Bitcoin are challenging over the next six months, but a huge opportunity could be in place after that. Bitcoin: Technical Analysis From a technical perspective, we are ready to make even lower lows. BTC TA ( TrendSpider ) The way I see it, we are now completing an ABC corrective move from the highs, which could land us as low as $40,000. We have strong volume support at that price, and it’s also a key fib retracement level. We also have a MACD flipping bearish in the weekly and an RSI that has room to run into oversold. However, these aren't bad levels to accumulate. The triangle drawn above lays out my scaling-in strategy, highlighting levels at which to deploy 20%, 30%, and then 50% of my target Bitcoin allocation. At these levels, I’d say a 50% allocation to Bitcoin is justified. If and when we move into the $50K range, I’d consider deploying the remaining 50%, which I’d likely spread out over the coming three months. Final Thoughts The bottom line is that Bitcoin is far from dead, and it will eventually see new highs, in my opinion. We’ve seen this story play out so many times before. People get euphoric at the highs, be it with Bitcoin or AI, and then lose all interest near the lows. But ultimately, the last two years have shown that the real money was made selling the hype and finding the unloved that the market will rotate to next. I’m quite confident we will see a shift in crypto prices and sentiment over the next six months, if not sooner. And this means you want to position for this shift now.
