BTC has underperformed US stocks for six consecutive months. In extreme fear, is this the bottom or the abyss?

Waking up to a new day, BTC edged back up to 68k. In remarks by Trump, signals emerged that he may have an intent to end the conflict in a hurry. But which way safe-haven assets go is what truly shows how much the market believes the mess ignited by this incident can, as intended, get out of the trouble smoothly.

Bitcoin’s first-quarter performance report is out—it’s down more than 20%. The number itself isn’t especially surprising, since in the crypto world, a drop of half doesn’t even count as news. What really caught the attention of the chain analysts is another set of data: since October 2025, Bitcoin has been underperforming the U.S. stock market for six straight months.

This seemingly has never happened before.

Risk Dimensions founder Mark Connors used a very straightforward word to describe it: unprecedented. The chain analysts scoured historical data—Bitcoin’s pullbacks before were indeed much more severe, but they had never lasted this long. Previously, it was a hard fall and a quick rise; this time, not so—just lying on the ground and not getting up.

Even more puzzling are the sentiment indicators. Cointelegraph’s data shows that the Crypto Fear and Greed Index has stayed at the 11 mark for 12 consecutive days, lingering in the extreme fear zone all the time. Since January 28, it hasn’t left that zone.

When traditional traders see this kind of reading, their first reaction is usually to buy the dip. After all, the Fear and Greed Index is a contrarian indicator, and extreme fear typically lines up with buying opportunities. But this time, the market doesn’t seem to be buying the story. People are starting to question whether this signal might fail.

The chain analysts think that to answer this question, you first need to look away from price and see what’s actually happening on-chain.

CryptoQuant’s analyst provided an interesting data point: Bitcoin whale address share has already exceeded 60%, hitting a ten-year high. At the same time, the share of retail investors has fallen to the lowest level in the same period.

This data itself isn’t unusual—whales accumulating during bear markets is standard operating procedure. But the figure of 60% is worth focusing on. The analyst’s exact words were: generally, when the whale share reaches its peak, it often implies a bottom.

Another on-chain signal worth watching comes from another analyst. They found that short-term holders—those holding for about one week to one month—have already dropped to 3.98%. In prior cycles, when this number fell below 4%, it often corresponded to the market being close to the bottom phase.

The logic behind it is simple: the speculators have left, and long-term holders remain. With reduced short-term activity, there are fewer quick in-and-out trades, and turnover is shifting from dispersed retail investors into concentrated whale accounts.

It sounds like a bottom signal, but things may not be that simple.

The chain analysts have long emphasized a viewpoint: you can’t look at the market with only one dimension. On-chain data does indeed show signs of accumulation, but the macro environment and sentiment indicators aren’t just decorations either.

A CoinDesk report mentioned that in early March, when the Iran–U.S. conflict escalated, global markets shook as well. Oil prices jumped, the dollar strengthened, and even safe-haven asset gold saw sharp swings—because the reason is straightforward: margin calls forced institutions and sovereign entities to sell gold to replenish liquidity.

What’s interesting is that during this bout of turbulence, Bitcoin performed quite steadily: it actually rose by about 1% in March, while gold fell 11% in the same period. Connors believes this is thanks to the earlier deleveraging process that had already cleared most of the overly leveraged positions. In addition, the cross-border liquidity characteristics of Bitcoin also limit the scale of forced selling [1].

But whether this performance can continue depends on one key variable: geopolitics.

Connors is direct about their view: the timing for a reversal is either two months or two years. The gap in between depends on the direction of the Iran conflict. If the conflict escalates, energy markets, liquidity, and global risk appetite will all be dragged down—and as a risk asset, Bitcoin will find it hard to stay out of the trouble.

So will the signal fail?

The chain analysts have always reminded readers that historical patterns are meant to be referenced, not worshipped.

This time, there are a few special situations worth noting. First, Bitcoin has underperformed U.S. stocks for six straight months, and this imbalance period has been unprecedented in history. Long-term weakness in itself could become a push for a reversal, but it could also mean that the market structure has undergone fundamental change—such as Bitcoin returning from a safe-haven asset to the category of risk assets.

Second, the extreme fear signal has lasted too long. From January 28 until now, the Fear and Greed Index has never left the extreme fear zone. Prolonged pessimism can erode investors’ patience—some people may not be able to hold on and cut losses at the bottom to exit.

Third, while the regulatory environment appears favorable on the surface, there are divisions internally. The U.S. SEC has a new chair, clearing obstacles for more crypto ETFs; the GENIUS bill is also moving forward; and a Trump executive order signed in August last year even includes the 401(k) plan within alternative assets that include cryptocurrencies. But the rules proposed by the U.S. Department of Labor on Monday show potential differences among federal agencies. This uncertainty could suppress large-scale entry by institutional investors.

So what should be done now?

The chain analysts’ usual stance is: investment decisions should be based on your own cycle judgment, and investment actions should be based on your own plan—don’t be reckless.

For long-term holders with a horizon of three to five years, the current market does offer a relatively favorable buying window. The three signals—six months of underperformance vs. U.S. stocks, extreme fear persisting, and on-chain data hinting at accumulation—stack together and point to a market nearing the bottom. Dollar-cost averaging or building positions in batches are safe choices. Don’t think about going all-in at once—psychologically, you also need to be prepared for possible volatility lasting for months.

For short-term traders, the current phase where the correlation between Bitcoin and U.S. stocks has weakened does indeed provide an opportunity to pursue Alpha. But it must be reminded that market volatility is still high; once a key support level breaks—for example, 60,000 U.S. dollars—it could trigger a new round of selling. If stop-loss discipline is not strict, or if someone is an all-in player with too large a position, they will most likely still be shaken out.

As for those still watching from the sidelines, they mainly look at three metrics: on-chain data for changes in whale address share and short-term holder share; sentiment indicators to see whether the Fear and Greed Index continues to fall below the threshold or turns back up; and the macro environment for the Iran–U.S. conflict and Federal Reserve policy.

In the chain analysts’ final view: the current market really does look like a compressed spring—historical experience points toward the bottom. But the longer the compression lasts, the stronger the energy released might be. Whether it’s a rebound or a crash depends, to a large extent, on which direction this geopolitical “black swan” flies. Given the situation so far, it may be unwise not to keep expectations in check.