Back to the dip ... and we know those rules.

1. The Bull Market IS NOT OVER ... but

2. Bitcoin outperforms

2. Alts drop considerably (maybe into another bear)

3. Peculiar narratives remain strong, such as Memes or AI

So, let's look at one of the strongest recent narratives: Agentive AI.

$VIRTUAL has massively outperformed over the most recent period. And I've written about this many times (our wallet has taken some considerable profit too), it looks overbought.

Now, I don't like using the RSI or MACD for assessing bubbly items.

Instead, we use versions of the 20/40 rule or 30/60 rule.

I explain how to use this in our Art of the Bubble course, incidentally.

For today, we've got this image.

The current price is still some 80% above its 200-day simple moving average. Yes, it's a volatile stock, but moving from 84% above to merely 80% above doesn't mean it's now less overbought.

In the current environment, I want to point out that it has a long way to go before it potentially drops into a "more reasonable" 30% to 60% above its long-term average.

Concluding Thoughts

It might be time to take some gains from winning projects like $VIRTUAL and cycle that into the majors, especially $BTC.

Incidentally, that's not to say that $BTC isn't still some 23% above its long-term average. It's only to say that of the two, $VIRTUAL is quite hot and we're moving into a more cautionary environment.

Happy Trading!

-Sebastian Purcell, PhD

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