From Bubbles to Bitcoin: The Search for Undervalued Assets
Retail often make the mistake of chasing overvalued assets while smart money chases the undervalued ones.
Nothing goes up in a straight line forever. Those who have been in markets for some time have most likely lived through some bubbles and major crashes. These events often occur when markets become too overheated and overvalued.
We have seen major bubbles and crashes since the turn of the century, notably the dotcom bubble in 2000 and the global financial crisis in 2008. Even those who were not invested during those periods have heard stories about the extreme overvaluation that caused those bubbles to pop.
One of the best ways to gauge this is through the Buffett Indicator, which measures the total value of all publicly traded stocks against GDP. Currently, this ratio sits above 200% for the first time in history, which is significantly higher than levels seen before the major crashes in 2000 and 2008. While retail interest has returned to equities as they hit all-time highs, many experts are warning that the AI-driven rally has made the index extremely overvalued.
However, smart money is not looking at overvalued investments.
Instead, they are looking at an asset that is up approximately 35% since February but still close to 40% down from its all-time high of $126k. Bitcoin is that undervalued asset. It remains in a drawdown yet has performed resiliently since the start of the Middle East conflict.
While stock markets are being inflated by AI and tech narratives, Bitcoin has begun to climb for a different reason. It is no longer moving purely in lockstep with risk-on markets. Instead, we are seeing a larger structural shift where Bitcoin is being used as a neutral settlement currency. As governments and institutions look for alternatives to fiat systems, smart money has been entering consistently over the last few months.
Are you positioned for the shift, or are you still chasing the peak of the equity bubble?
Stormrake Spotlight: Pax Gold (PAXG) ($4,584)
PAXG has bounced once again from the moving average situated in the middle of the demand zone. Up nearly 1.5% over the last session, the asset is looking to move back out of this range as bulls attempt to mount a final stand.
BTC/USD Key Levels and Price Action:
Bitcoin has successfully flipped the resistance at $80k into support, which represents a massive achievement for the bulls. This level was previously a major target, and holding above it confirms a significant shift in market structure. The bulls now have full control of both structure and momentum, and they will be looking to push deeper into the $80k region as the weeks progress.
*All prices are denominated in USD unless stated otherwise*
Written by Alexandar Artis
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