Chainlink (CRYPTO: LINK) co-founder Sergey Nazarov argues that the current crypto downturn is not a replay of previous bear markets. Speaking on X on Tuesday, Nazarov noted that there have been no FTX-style collapses this time and pointed to a persistent wave of tokenized real-world assets that continues to grow despite price declines. Crypto market capitalization has fallen about 44% from its October all-time high of $4.4 trillion, with roughly $2 trillion leaving the space in just four months. He frames the cycle as a test of the industry’s progress: cycles reveal how far the ecosystem has advanced, and this downturn is exposing both resilience and a real-world asset narrative that could outlast speculative pricing.

Key takeaways

• The downturn lacks a single systemic event comparable to FTX-era collapses, suggesting improved risk management across institutions.
• Tokenized real-world assets (RWAs) are expanding on-chain, signaling a use case beyond mere price speculation.
• On-chain perpetuals and asset tokenization offer 24/7 markets, on-chain collateral, and real-time data that could drive institutional adoption.
• Chainlink’s credibility as a backbone for on-chain RWAs remains intact even as the broader market experiences weakness.
• Analysts and industry observers see a bifurcation between crypto prices and the growth trajectory of on-chain RWAs, potentially reshaping the industry’s value proposition.

Tickers mentioned: $BTC, $ETH, $LINK

Sentiment: Neutral

Price impact: Negative. A broad sell-off and outflows have pressured prices and market capitalization, even as on-chain RWA activity trends higher.

Market context: The current cycle unfolds amid a shifting risk environment, macro uncertainty, and ongoing debates about liquidity and regulation that influence both crypto assets and tokenized RWAs.

Why it matters

The argument that the bear market is not a monolithic crash but a spectrum of dynamics matters because it reframes what investors should watch. Nazarov emphasizes that the absence of large, systemic failures this cycle points to improved risk controls and more mature market infrastructure. In practical terms, this could translate into steadier liquidity provision, fewer cascading liquidations, and greater confidence in deploying capital through on-chain channels rather than off-ramp exits.

Central to this narrative is the acceleration of RWA tokenization. According to RWA.xyz, tokenized RWAs on-chain have surged by about 300% over the past 12 months, underscoring a use case that can prosper irrespective of crypto price cycles. The implication is clear: real-world assets—ranging from securitized notes to commodity-linked contracts—are becoming meaningful, on-chain stores of value and collateral concepts, not merely speculative bets. This trend could feed into broader institutional demand, as on-chain mechanisms offer transparency, auditability, and cross-border settlement capabilities that traditional markets take days or weeks to deliver.

Yet the market’s performance remains tethered to macro and sector-specific catalysts. LINK, the token associated with pricing data and oracle services, has faced sustained weakness, trading in bear-market territory after peaking earlier in the cycle. The dynamic illustrates a decoupling: while RWAs push forward in practical utility, the crypto market, including major assets like Bitcoin and Ethereum, can diverge for periods where macro sentiment dominates. In this context, on-chain RWAs could gradually displace some narrative weight away from pure price action toward real-world utility and risk-adjusted capital formation.

Institutional involvement is widely anticipated to hinge on the utility of these on-chain structures. Nazarov argues that the combination of perpetual markets, tokenized assets, and robust on-chain collateral is creating a more resilient foundation for institutions to experiment with crypto-enabled finance. The broader ecosystem benefits from infrastructure upgrades that enable risk management, settlement, and governance in a transparent, programmable environment. The takeaway is not that crypto prices must explode to prove value, but that the underlying systems—the oracles, the data streams, and the contractual primitives—are becoming indispensable to professional finance.

As markets digest these developments, some observers emphasize that the current sell-off is driven by factors outside the crypto sector. Analysts have framed the move as a wider market concern about AI equities, liquidity expectations under a potentially tighter policy regime, and shifts in liquidity leadership. While these external pressures complicate the price narrative, the on-chain RWA ecosystem appears to be advancing on its own trajectory, aligned with broader fintech adoption and cross-chain interoperability goals.

“If these trends continue, I believe what I have been saying for years will happen; on-chain RWAs will surpass cryptocurrency in the total value in our industry, and what our industry is about will fundamentally change.”

Not all bear markets are equal

Industry observers have framed this downturn as potentially less damaging to the core ecosystem than prior cycles. Bernstein analyst Gautam Chhugani described the Bitcoin bear case as historically weak, suggesting that the price action reflects a crisis of confidence rather than a structural breakdown. “The current Bitcoin price action is a mere crisis of confidence. Nothing broke, no skeletons will show up,” the note said. The takeaway is that the macro environment, not just isolated crypto incidents, is weighing on sentiment.

Other voices emphasize a more nuanced picture. For instance, market participants note that macro catalysts—ranging from interest-rate expectations to tech-sector dynamics—have a disproportionate influence on crypto pricing versus on-chain activity. The sell-off has been described as being driven more by non-crypto catalysts than by internal systemic failures within the crypto space, a distinction that could support a faster reacceleration should risk appetite improve and liquidity return.

Market context

Against the backdrop of a 44% drawdown in crypto market cap from the October peak and substantial outflows, the story of RWAs on-chain remains a central pillar of longer-term value propositions in crypto. The dynamic underscores a broader trend toward tokenization and on-chain finance as mainstream infrastructure projects mature. If on-chain RWAs continue to gain traction, the sector could reorient investor attention toward scalable, real-world use cases, rather than relying solely on volatility-driven appetite for purely digital assets.

Why it matters

For builders, the message is clear: investing in robust on-chain infrastructure for RWAs—oracle reliability, settlement speed, and secure collateral mechanisms—could yield enduring demand. For investors, RWAs offer a potential hedge against crypto-price cycles by anchoring value in tangible, off-chain assets. For the market, the continued growth of RWAs may redefine what constitutes “crypto value,” expanding the spectrum of investable instruments and potentially attracting traditional finance players to participate in a more regulated, verifiable on-chain ecosystem.

What to watch next

• Updates from RWA.xyz on on-chain RWAs growth metrics and new asset classes tokenized on-chain.
• Institutional pilots adopting on-chain perpetuals and RWA-backed collateral frameworks.
• Regulatory developments affecting tokenized real-world assets and oracle data provisioning.
• Cross-chain integrations that improve liquidity, settling quickly, and governance for RWAs.

Sources & verification

• Sergey Nazarov’s X post discussing bear-market dynamics and RWAs growth.
• RWA.xyz data showing on-chain RWA value growth (about 300% YoY).
• LINK price/index coverage referenced in market commentary.
• Bernstein note on Bitcoin bear-case context.
• Wemade KRW stablecoin alliance with Chainlink coverage.

RWA momentum and a reshaping crypto market

Chainlink’s foundational role in powering on-chain RWAs remains a consistent thread as the sector charts its next phase. The on-chain RWA narrative is supported by observable growth metrics and a steady flow of products that enable real-world assets to exist, trade, and collateralize on-chain. While price action can swing with global liquidity and risk sentiment, the underlying technology stack—secure oracles, robust data feeds, and programmable contracts—continues to attract the interest of developers, institutions, and asset issuers alike. The broader question is whether on-chain RWAs will eventually carry a larger share of industry value than speculative crypto assets, a shift Nazarov has been vocal about predicting for years.

Ethereum (CRYPTO: ETH) has slipped into a zone that market watchers associate with capitulation, as on-chain signals flash bearish, yet opt for caution on whether a definitive bottom is in place. The focal point is the MVRV Z-Score, a gauge that compares current market value to the realized value, effectively measuring how much investors are paying relative to the price at which Ether last moved. A reading around -0.42 indicates Ether is trading below its realized value, a sign historically linked to stress but not a sole predictor of a lasting bottom. While some analysts argue this signals a clear capitulation phase, others warn that the current slide may not reach the extremes observed in past bear markets.

The MVRV Z-Score was designed to flag phases of euphoria or capitulation by showing when market value diverges markedly from realized value. In practice, a notably negative score has preceded bottoming behavior in prior cycles, albeit without a guaranteed timetable. Joao Wedson, a crypto Quant analyst and founder of Alphractal, described the current reading as “showing that Ethereum is indeed going through a clear capitulation process.” Yet, he cautioned that today’s data do not match the intensity of the 2018 and 2022 bear-market lows. The record low for the metric sits at -0.76, observed in December 2018, underscoring the scale of the slide that would be needed for a historical parallel.

The near-term horizon, however, remains contested. Wedson noted that further downside is possible before any sustained recovery takes hold, citing continued market stress and the possibility of liquidity constraints during tax season. “The market is already under stress, but historically, there is still room for further downside before a definitive structural bottom is formed,” he said. Ether’s price action has been volatile, with a sharp decline followed by a tentative rebound, complicating the call on whether the capitulation phase is nearing its end.

The recent price action has been punishing: Ether has fallen about 30% over the past two weeks, sinking to a bear-market low near $1,825 on a Friday before a modest rebound to roughly $2,100 on the following Monday. The moves come amid broader macro fragility and shifting risk sentiment within crypto markets, prompting both caution and opportunism among analysts. Some traders and researchers see this as a rare “buy fear” window, while others warn that risk remains elevated until on-chain dynamics confirm a bottom.

HashKey Group senior researcher Tim Sun told Cointelegraph that historical performance has reinforced the view that Ethereum’s MVRV Z-Score can be a reliable indicator for identifying bottoming zones, particularly when combined with evolving on-chain activity and long-term ecosystem development. “Judging by on-chain activity, protocol evolution, and long-term ecosystem structure, Ethereum’s fundamentals have not seen any substantive deterioration. On the contrary, they continue to improve across several key dimensions,” he said. Still, Sun stressed that current trajectories could change if the primary drivers of decline persist, suggesting that a definitive bottom remains contingent on future liquidity and demand signals.

Meanwhile, other observers offered a more optimistic read. Michaël van de Poppe, founder of MN Fund, argued that the drawdown presents a rare opportunity to consider ETH as an investable bet, noting a substantial gap between the current price and the “fair price” implied by the MVRV ratio. “I think that this is a tremendous opportunity to be looking at ETH,” he tweeted, positing that negative deviations historically precede substantial recoveries when macro and on-chain conditions align. The narrative held that Ether’s network metrics and the broader ecosystem strength underpin a case for accumulation once the weak hands have been flushed out.

Other voices joined the chorus of potential catalysts for a rebound. Andri Fauzan Adziima, Bitrue’s research lead, suggested that persistent negative MVRV zones have historically preceded strong recoveries in subsequent cycles. He contended that ETH’s network fundamentals remained robust and that a long-term accumulation stance could emerge once price risk subsides. “Brutal capitulation now, but historically one of the best ‘buy fear’ windows for ETH,” Adziima said, underscoring the tension between near-term price action and longer-term structural factors.

Market participants acknowledged that the current pullback may be overshadowed by longer-term catalysts such as network upgrades and continued ecosystem maturation, even as price action remains sensitive to near-term liquidity and macro dynamics. The narrative that “buying fear” can yield outsized returns if followed by demand recovery continues to gain traction among several traders, though it remains balanced by caution regarding April liquidity and potential tax-related squeezes.

One of the best “buy fear” windows for Ether

Despite the caution, several observers argued that the current environment could present one of the more compelling entry points for ETH in recent memory. Van de Poppe’s commentary echoed a view shared by others that a sharp deviation below fair value can precede a robust rebound when demand returns and on-chain indicators resume strengthening. The notion is that ETH’s price could be primed for a longer-term recovery even if the immediate path remains choppy.

As the debate continues, sentiment remains nuanced. Some participants emphasize that negative MVRV conditions have historically aligned with durable recoveries once the weak hands capitulate, while others warn that liquidity constraints around the April tax season could delay any sustained recovery. The balance between on-chain fundamentals and macro stressors will likely shape Ether’s trajectory over the coming weeks and into the next quarter.

For investors watching the tape, the key takeaway is that volatility may persist even as underlying fundamentals show resilience. The combination of a negative MVRV reading and persistent price pressure suggests that any bottoming process will require a convergence of favorable liquidity and sustained demand, rather than a simple technical bounce.

Why it matters

The ongoing discussion around Ether’s valuation and bottoming prospects matters for multiple stakeholders. For traders, MVRV-based indicators provide a framework to interpret on-chain signals amid price volatility, while investors may view the current setup as an opportunity to accumulate at a discount relative to realized value. For developers and ecosystem participants, the narrative about Ethereum’s fundamentals—network activity, upgrade timelines, and long-term growth—matters for capital allocation, governance engagement, and potential product developments that could draw renewed user interest.

From a market-wide perspective, Ethereum’s fate remains a bellwether for risk appetite in crypto markets. A clear bottom in ETH could bolster sentiment across altcoins and contribute to a broader risk-on environment, while a protracted drawdown could reinforce caution and delay recovery for other assets. In either case, the episode underscores the importance of on-chain metrics as a corroborating lens for price action, beyond headlines and short-term moves.

What to watch next

• Monitor liquidity conditions around the April tax season for potential downside or relief catalysts.
• Track on-chain indicators related to MVRV Z-Score and general network activity to assess whether a structural bottom forms.
• Watch for sustained price stabilization above recent lows and any acceleration in demand signals that could precede a rebound.
• Observe broader macro factors and crypto market flows that could influence risk sentiment and capital allocation.

Sources & verification

• On-chain MVRV Z-Score interpretation and commentary by Joao Wedson of Alphractal (tweet/status referenced in the article).
• Cointelegraph reports on Ether’s 30% decline over a two-week period and the subsequent move to around $2,100.
• HashKey Group insights from Tim Sun regarding MVRV Z-Score reliability and Ethereum fundamentals.
• Industry commentary from Michaël van de Poppe and Bitrue’s Andri Fauzan Adziima on negative MVRV zones and potential buy opportunities.

For the first time in nearly a month, U.S. bitcoin exchange-traded funds (ETFs) have recorded back-to-back net inflows, snapping a redemption streak that stretched back to mid-January.

According to SoSo value data, the consecutive inflows shift began on Friday with $471.1 million in fresh capital, followed by a $144.9 million on Monday. This comes as bitcoin bounced back from Thursday’s $60,000 low to around $70,000.

In mid-January, bitcoin peaked near $98,000 after a two week rally that started at $87,000. The subsequent sell-off to $60,000 saw investors yank millions of these spot ETFs.

Broadly speaking, investors still appear confidence about the cryptocurrency’s long-term prospects, as evident from the spot ETFs’ resilient asset under management (AUM).

According to Checkonchain, the cumulative AUM of the 11 funds has only decreased by about 7% since early October, sliding from 1.37 million BTC to 1.29 million BTC. Bitcoin, meanwhile, is down over 40% since hitting record highs above 126,000 in October.

Ethereum has hit a zone typically associated with mass selling, with an MVRV Z-Score returning a score of -0.42 — though analysts are split on whether the price of Ether is close to bottoming out. 

The MVRV Z-Score is a metric used to assess whether a crypto asset is overvalued or undervalued by comparing its market value to its realized value, which reflects the total value of Ether based on the price at which it was last transacted. 

The metric was created to identify periods of market euphoria or capitulation when market value was considerably higher or lower than realized value.

CryptoQuant analyst and Alphractal founder and CEO, Joao Wedson, said the score “shows that Ethereum is indeed going through a clear capitulation process.”

However, the analyst said the data “does not compare to the intensity” seen at the major bottoms of the 2018 and 2022 bear markets. 

The lowest value in history was -0.76, recorded in December 2018, said Wedson.

Further downsides for ETH prices possible

The analyst cautioned that further downsides could be possible before any meaningful recovery. 

“The market is already under stress, but historically, there is still room for further downside before a definitive structural bottom is formed,” he said. 

The price of Ether has fallen 30% over the past fortnight, reaching a bear market low of $1,825 on Friday before a minor recovery to $2,100 on Monday. 

Related: Tom Lee tips lack of leverage and gold ‘vortex’ for Ether’s 21% slump

HashKey Group senior researcher Tim Sun told Cointelegraph that historically, Ethereum’s MVRV Z-Score “has proven to be a highly reliable indicator for tracking subsequent market shifts, particularly in identifying bottoming zones across multiple cycles.”

“Judging by on-chain activity, protocol evolution, and long-term ecosystem structure, Ethereum’s fundamentals have not seen any substantive deterioration. On the contrary, they continue to improve across several key dimensions,” he said.

However, it is premature to conclude that Ether has finished its bottoming process as long as the primary drivers of the current decline persist, he added.  

“Given the potential liquidity constraints associated with the upcoming April tax season, the probability of further price downside remains a significant factor.”

One of the best “buy fear” windows for Ether

Other market commentators, such as MN Fund founder Michaël van de Poppe, were a little more optimistic, stating, “I think that this is a tremendous opportunity to be looking at ETH.”

“The core reason for this is that there’s a massive gap to the ‘fair price,’” he said, referring to the MVRV ratio.

Ether is currently as undervalued as it was during the April 2025 crash, the June 2022 bottom after the Terra/Luna collapse, the March 2020 Covid crash, and the December 2018 bear market bottom.

“In all of those cases, this provided a tremendous buying opportunity for this particular asset.”

Andri Fauzan Adziima, research lead at crypto trading platform Bitrue, told Cointelegraph that negative MVRV zones “have repeatedly preceded explosive recoveries in past cycles.”

“With ETH’s network metrics holding strong, it feels like a prime long-term accumulation setup once the weak hands are fully flushed,” he said. 

“Brutal capitulation now, but historically one of the best ‘buy fear’ windows for ETH.” 

Magazine: Bitcoin difficulty plunges, Buterin sells off Ethereum: Hodler’s Digest