Bitcoin Is Deeply Oversold. Does That Mean the Bottom Is In? - Bits + Bips

Speakers

Steve Erlick — Host, Bits + Bips

Katie Stockton — Founder, Fairlead Strategies

Summary

Bitcoin has broken key long-term support levels (specifically the Ichimoku cloud base at $89k) and confirmed a bearish trend reversal on monthly charts.
Sentiment is at "extreme fear" levels, which typically signals a contrarian buying opportunity, but momentum indicators (MACD) have not yet confirmed a bottom.
A "tactical bounce" is expected due to oversold conditions, but it is likely a counter-trend move rather than a resumption of the bull market.
Gold and Silver are exhibiting signs of "upside exhaustion" and monthly sell signals after a parabolic run-up, suggesting a period of consolidation or correction.
The "AI eating Software" narrative is causing a crash in traditional software stocks, creating potential oversold bounce opportunities to identify new leadership.

Trade Ideas

Ticker	Direction	Speaker	Thesis	Time
ETH	WATCH	Katie Stockton Founder, Fairlead Strategies	Ethereum is underperforming Bitcoin (lower beta in risk-off). The long-term secular trendline connects to ~$1,527, which is significantly below current prices. ETH is currently in "no man's land." It hasn't hit deep long-term support like the 2019 trendline, but it is oversold. It requires Bitcoin to stabilize first. WATCH. Monitor for a bottoming formation, but prioritize Bitcoin for safety or Solana for beta until ETH hits major structural support. A drop to the $1,527 trendline would represent a further ~25% decline from current levels.	15:51
SOL /ALTCOINS	WATCH	Katie Stockton Founder, Fairlead Strategies	Altcoins like Solana are trading in lockstep with Bitcoin but with higher beta. They have no independent price history to form long-term support levels like stocks. When Bitcoin signals a tactical bottom, Altcoins will likely outperform on the percentage gain (the "rubber band" effect). The trade is to use Bitcoin as the signal generator but execute the trade via Alts for alpha. WATCH. Prepare to buy high-quality Alts (SOL) the moment Bitcoin confirms a daily momentum reversal. If Bitcoin fails to hold $66k-$70k, Alts will suffer disproportionate losses due to thinner liquidity.	16:50
SLV /GOLD	NEUTRAL	Katie Stockton Founder, Fairlead Strategies	Gold has triggered a monthly sell signal per DeMark indicators after a parabolic move. It is showing "upside exhaustion." Assets that go parabolic often face a long period of digestion (sideways or gradual correction) rather than an immediate crash. The "safe haven" narrative is currently failing as Gold correlates with risk assets. NEUTRAL. The easy money has been made; expect a trading range rather than a new trend. A deepening liquidity crisis could force the sale of winners (Gold) to cover margin calls in other assets.	20:30
SOFTWARE SECTOR	WATCH	Katie Stockton Founder, Fairlead Strategies	Software stocks are crashing due to the "AI is eating software" narrative. Clients are asking for counter-trend setups. The sector is washing out. The upcoming "oversold bounce" will be an information event: stocks that bounce hardest and hold gains are the new leaders; those that lag are "dead money." WATCH. Use the inevitable relief rally to grade the sector's relative strength, but do not buy blindly yet. The structural displacement by AI may be a secular headwinds that technical bounces cannot overcome long-term.	—
BTC	WATCH	Katie Stockton Founder, Fairlead Strategies	Bitcoin broke the Ichimoku cloud support at $89k and the monthly MACD has flipped to a sell signal. However, the weekly stochastic oscillator is now "deeply oversold." While the primary trend is now bearish (lower highs/lows), the extreme bearish sentiment and oversold conditions usually force a violent "snap-back" rally. The lack of overhead resistance (due to the previous parabolic rise) means the bounce could be sharp (5-6%+). WATCH. Do not "catch the falling knife" yet. Wait for a short-term momentum shift (1-2 weeks away) to trigger a tactical long entry. The "air pocket" below current levels could lead to a flush down to the $50k-$60k range before the bounce occurs.	0:14