After falling to nearly $2.0 trillion last Friday, the total crypto market capitalization has rebounded to above $2.3 trillion. Investors appear to be spotting opportunities, and buy-the-dip sentiment is resurfacing.

The key question is whether this rebound is strong enough to form a classic V-shaped recovery. Several market signals offer insight.

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Signs of Buy-the-Dip Behavior After the Panic Sell-Off

One of the earliest and most notable signals is the renewed inflow of stablecoins into centralized exchanges. This trend reversed after months of decline, even though selling pressure remains elevated.

Rising stablecoin balances on exchanges reflect investors’ readiness to deploy capital. This signal is particularly relevant to retail traders, who primarily trade on exchanges.

Data from CryptoQuant shows that the 7-day average value of ERC-20 stablecoins flowing into exchanges on Ethereum increased from $51 billion in late December 2025 to $102 billion as of now.

The $102 billion figure also exceeds the 90-day average of $89 billion. This suggests that capital deployment has accelerated over the past few weeks.

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Although selling pressure remains significant, the growth in stablecoin inflows indicates renewed investor interest. Some market participants may already be accumulating positions at perceived market bottoms.

Additionally, the Accumulation Trend Score from Glassnode provides further confirmation. Wallets of all sizes, from small holders to large entities, are shifting toward stronger accumulation.

This indicator measures changes in balance across wallet cohorts and assigns a score between 0 and 1. Higher values indicate more aggressive accumulation behavior.

Glassnode’s chart shows the score moving from yellow and red zones (below 0.5) over the past two months to blue zones (above 0.5) across multiple wallet categories. Wallets holding 10–100 BTC stand out as the most aggressive buyers, with the indicator turning dark blue and approaching 1.

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Observations from Lookonchain, an account that tracks notable on-chain activity, further support this data. The account has repeatedly reported whale accumulation in recent periods, not only in Bitcoin but also in Ethereum.

Overall, these signals suggest that buy-the-dip sentiment is returning among both retail investors, as reflected in rising stablecoin inflows, and whales, as reflected in on-chain accumulation. However, a sustainable recovery still depends on the market’s ability to hold key levels in total capitalization.

According to well-known analyst Daan Crypto Trades, TOTAL swept the April 2025 lows, which were associated with tariff-related news, and then closed back above them. He argues that the market must hold above $2.3 trillion in the coming days to justify expectations of a recovery toward $2.8 trillion.

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“I think this is an important area for the market to hold if it wants to sustain a further relief bounce,” Daan Crypto Trades said.

He also noted that after several weeks of heightened volatility, market volatility could begin to decline. Price action may then stabilize within a defined range, allowing investors to reassess conditions and search for new opportunities.

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A recent analysis from BeInCrypto also highlighted the importance of the $71,000 level for Bitcoin. Only if the price stabilizes above this support level can the market reasonably expect a broader, more extended recovery.

XRP edged higher over the past 24 hours, rising roughly 2% in a modest relief move after last week’s sharp sell-off.

But despite the uptick, the Ripple token’s (XRP) chart indicators suggest the bounce offers little cause for celebration, with sellers still firmly in control of the broader trend.

XRP price holds near $1.45, but broader downtrend remains intact

On the daily chart, XRP remains locked in a clear downtrend, marked by a series of lower highs and lower lows since late January. While price has stabilized near the $1.45 level after briefly dipping toward recent lows, the move appears more like short-term consolidation than the start of a meaningful recovery.

Momentum indicators reinforce that cautious view.

The relative strength index (RSI) is hovering in the mid-30s, well below the neutral 50 mark, indicating bearish momentum remains intact even after the latest bounce. Historically, sustained recoveries tend to coincide with RSI reclaiming neutral territory, something XRP has yet to achieve.

Volume-based indicators also point to continued selling pressure. On-balance volume (OBV) has been trending lower, suggesting that distribution is still outweighing accumulation. This implies that recent green candles may be driven by short covering or temporary relief rather than fresh buying interest.

XRP price faces heavy resistance near $2.05–$2.30 fibonacci zone

From a trend perspective, XRP is trading well below its 20-day simple moving average, currently near $1.68. The downward slope of that moving average underscores the lack of bullish follow-through and signals that rallies are likely to face selling pressure at higher levels.

Fibonacci retracement levels drawn from XRP’s recent swing high to its January low further highlight the challenge for buyers. The $2.05–$2.30 zone, which includes the 0.382, 0.5 and 0.618 retracement levels, represents a dense area of overhead resistance. A sustained move above that range would be needed to shift the short-term outlook more constructively.

Until then, analysts say the latest 2% rise should be viewed in context — as a pause within a broader downtrend rather than a decisive change in direction. With momentum and volume indicators still favoring sellers, XRP’s price action suggests caution remains warranted in the near term.

TLDR:

• Search trends show persistent fear around the AI bubble, which historically appears during early expansion phases.
• Nasdaq returns and valuations remain far below dot-com extremes, signaling a cycle that has not reached mania.
• Rising margin debt indicates leverage growth, a pattern seen before peaks rather than during collapses.
• Market gains remain concentrated in mega-cap stocks, not broad participation typical of bubble finales.

The debate over an AI bubble has intensified as technology stocks continue to dominate market performance. New research shared by Bull Theory argues that current conditions do not match historical patterns seen at major market peaks. 

Instead, indicators point to an expansion phase rather than an imminent collapse. The analysis draws on valuation metrics, liquidity trends, and long-term bubble cycles.

AI Bubble Signals Show Fear and Concentration, Not Euphoria

Bull Theory reports that search activity for the phrase “AI bubble” remains elevated on Google Trends. High search interest reflects widespread concern rather than widespread confidence.

Historical market cycles show that bubbles tend to peak when public attention fades and belief becomes absolute. Current search behavior suggests the opposite phase, where fear and skepticism remain dominant.

Nasdaq performance also differs from past mania periods. Over the last five years, the index has risen about 88 percent, far below the twelvefold surge recorded during the dot-com era.

Valuation data supports this comparison. Dot-com Nasdaq price-to-earnings ratios reached roughly 60, while today’s Nasdaq trades near 26, according to market datasets cited by Bull Theory.

Market breadth further weakens the bubble argument. The S&P 500 equal-weight index has gained only about 10 percent over the past year, showing that gains concentrate in a small group of mega-cap firms.

Nvidia, Apple, Microsoft, Google, and Amazon account for most of the rally. Previous bubble peaks required broad participation across sectors and stocks.

Volatility indicators also signal caution. VIX spikes accompany most market pullbacks, and options data shows consistent demand for downside protection.

These patterns reflect defensive positioning rather than the low-volatility environment typical of late-stage speculative peaks.

Liquidity and Leverage Data Point to Ongoing Expansion Phase

Margin debt has climbed to about $1.1 trillion, the highest level on record. Bull Theory notes that past bubbles burst only after leverage began to contract sharply.

At present, leverage continues to rise alongside market funding activity. This trend aligns with earlier phases of historical bubbles rather than final stages.

Macro liquidity conditions also remain supportive. Central bank actions in the United States, Japan, and China have injected capital into global markets, sustaining risk appetite.

U.S. fiscal projections show federal debt rising toward $50 trillion by the end of the decade. Large-scale spending typically increases liquidity across financial systems.

Sentiment indicators show division rather than certainty. Retail traders respond to every correction with increased put option activity, while institutional investors remain cautious.

Bull Theory links this environment to the period between early warnings and the eventual peak seen in prior cycles. During the dot-com era, warnings surfaced in 1997, while the market topped in 2000.

A similar pattern appeared before the housing crash, with alerts years ahead of the final breakdown. The firm places current AI-related warnings in a comparable timeline window.

Corporate earnings also support the present valuation structure. Revenue growth from firms like Nvidia and Microsoft continues to justify capital inflows tied to artificial intelligence infrastructure.

Data from Nasdaq, Google Trends, and margin accounts collectively show a market still building momentum. The research concludes that present conditions reflect acceleration rather than exhaustion.