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CryptoQuant: Bitcoin is approaching the undervaluation zone
The MVRV indicator helps assess whether an asset is overvalued or undervalued. When MVRV drops below 1, the asset is considered undervalued. Undervalued assets are financial instruments whose market price is temporarily below their intrinsic (real) value. This suggests the market is underestimating the asset’s potential due to temporary difficulties, negative news flow, broader market fluctuations, or other factors.
According to analysts, the current market cycle differs noticeably from previous ones. When Bitcoin was rising in the autumn, it did not enter a clearly overheated overvaluation zone. As a result, the current decline may not repeat the scenarios seen at previous market bottoms, meaning the drawdown could be less severe.
“Experience shows that for most long-term appreciating assets, downturn periods often become the most effective time for preparation. These are the moments when the probability of favorable outcomes in the future increases,” CryptoQuant explained.
At the same time, Bitcoin has just recorded $2.3 billion in realized losses. By scale, this ranks among the largest capitulation events in BTC’s history. The event is comparable to the 2021 crisis, the collapse of Terra (LUNA) and FTX in 2022, as well as the mid-2024 correction.
In the short term, Bitcoin could decline by around 26% — from $67,000 to $50,000 — according to Geoffrey Kendrick of Standard Chartered. He attributes the potential drop to worsening macroeconomic conditions and weakening market sentiment.
See also: "JPMorgan lowers Bitcoin’s minimum price estimate due to easier mining"
