The pessimism around the stock market is back. That didn’t take long.
All it took was software stocks sliding back toward last year’s lows and bitcoin getting cut in half, and suddenly the same crowd is declaring the bull market dead. Again.
Never mind that the NYSE Advance-Decline line just closed at a new all-time high Wednesday.
Never mind that the number of NYSE stocks making new 52-week highs this week was the most we’ve seen in more than a year.
That’s not what market tops look like. That’s not how bull markets end.
In my experience, when real bear markets begin, you don’t see broad participation quietly expanding beneath the surface.
You see it contracting. You see fewer stocks holding up. You see leadership disappear.
That’s not what’s happening right now.
What is happening is much more specific.
The weakness investors are reacting to is coming from a very concentrated part of the market, for now anyway.
Two areas in particular are doing most of the damage to sentiment: software stocks and bitcoin-related assets.
And that’s not an accident.
To understand what’s actually going on here, we need to stop treating these as separate stories. They’re not.
Let’s take a closer look.
Crypto Is Software
For years, we’ve treated bitcoin and the rest of crypto the same way we treat other technology stocks.
No pedestal. No special rules. Just price behavior.
If anything, crypto has always traded less like hardware or semiconductors and much more like software: high-beta, narrative-driven, momentum-sensitive.
When risk appetite toward this group expands, it rips. When it contracts, it gets hit harder than most.
That was the working thesis based on how these assets had been behaving.
What we’ve seen over the past six months has only reinforced it. The market keeps confirming the same message.
Bitcoin is just another software stock:
Look at the pattern. Both bitcoin and software stocks attempted to break out to new highs last summer. Both failed in the fall. And both rolled over hard to start the new year.
That’s not a coincidence.
When two assets repeatedly peak, fail, and unwind together, the market is telling you they belong in the same bucket. You can call them different things. You can tell different stories about them.
Price does not care.
Crypto investors tend to hate this comparison. Reducing their belief system to just another risk asset inside traditional financial markets is uncomfortable.
But if crypto wants to be treated differently, it needs to start acting differently.
So far, it hasn’t.
Bitcoin Support and Resistance
Bitcoin is back down to its 2024 highs. This is the same area that acted as support last spring during the so-called Tariff Tantrum.
This level matters.
Former resistance tends to become support. Areas that once had more sellers than buyers often flip on future retests.
That’s the supply-and-demand dynamic doing what it usually does.
We already saw that market structure play out once last spring. Price held. Buyers showed up. And bitcoin is back at that same spot again.
This is the line in the sand:
If buyers are ever going to step in, this is where it happens.
A clean break back above 70,000 that actually sticks would go a long way toward repairing the damage and changing the tone for the entire crypto space.
If not, the market is telling us something else.
Software Support and Resistance
The setup in software looks almost identical.
Once again, major resistance from the prior cycle, and again in 2024, finally turned into support last spring.
And, just like bitcoin, prices are now back down testing that same level:
This is not random. This is exactly what you would expect if bitcoin really is just another software stock.
Here’s the key point.
While software and bitcoin are getting hit, the rest of the market is holding up remarkably well. Groups that are historically sensitive to risk, like regional banks and homebuilders, are not breaking down.
In fact, the regional bank ETF yesterday was just five pennies away from a new 52-week high.
That’s not fear. That’s not stress. That’s not how broad market selloffs begin.
That’s risk appetite.
The real question is not whether software and bitcoin look ugly in isolation. They do. The real question is whether that selling pressure stays contained, or whether it spreads.
So far, it’s stayed mostly contained.
That’s why the sudden return of bearishness feels misplaced.
This is not a market falling apart. This is a narrow unwind inside a specific pocket of risk.
If software and bitcoin can stabilize here, the pessimism will vanish as quickly as it appeared.
And if they can’t, the market will still tell us the truth.
Either way, price wins.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs