Is Bitcoin's bear market nearing its conclusion? Key BTC valuation indicator surpasses 2022 lows
A rolling two-year analysis of Bitcoin's MVRV Z-score has reached unprecedented lows, suggesting BTC is more "undervalued" now than during previous bear market bottoms.
Bitcoin (BTC) could be approaching the "close to the end" phase of its current correction, as evidenced by a traditional BTC price indicator achieving historic milestones.
Key points:
- On a two-year rolling basis, Bitcoin's MVRV Z-score has reached historic low levels.
- Analysts are forecasting a potential BTC price rebound soon based on this "wild" data.
- Market commentary suggests that the rally in precious metals has "done for now."
Bitcoin appears "undervalued" according to MVRV Z-score analysis
Through an X post on Friday, Michaël van de Poppe, who works as a crypto trader, analyst and entrepreneur, verified the unprecedented low measurements for Bitcoin's MVRV Z-score.
"This is a phenomenal chart," he communicated to his followers regarding the information, which was obtained from crypto analyst James Easton.
Easton concurred that the visualization now appears "wild," having dropped to levels never previously documented.
The MVRV metric represents market value versus realized value, calculating the price point at which the BTC supply most recently transferred (realized cap) in relation to the total value of all BTC currently in circulation (market cap).
The Z-score calculation divides this ratio by the standard deviation of the market cap, providing distinct "overvalued" and "undervalued" territories for Bitcoin during any specific time period.
"The current Z-Score of $BTC is lower than during the bear market bottom in 2015, 2018, COVID crash 2020 and 2022," Van de Poppe observed regarding the rolling two-year timeframe analysis.
"That's how deep we're in the bear market, and yes, we're close to the end of it."
Unprocessed information from the onchain analytics provider Glassnode indicates the Z-score sits at its most depressed levels since October 2023. During that period, BTC/USD was changing hands at approximately $30,000.
The previous instance when the "live" Z-score descended into its green-colored "undervalued" territory occurred at the conclusion of the previous bear market in 2022.
Precious metals consolidation sets stage for critical BTC price "trigger"
The price movement for Bitcoin dropped to fresh two-month lows during this week following an abrupt selloff throughout risk assets and precious metals markets.
According to data from TradingView, BTC/USD touched $81,040, and during the time of publication remained down almost 2% compared to the daily opening price.
Previously, Cointelegraph published a report on a forecast indicating that the timeframe surrounding the January monthly close would witness Bitcoin establishing a long-term bottom, mirroring patterns observed at the conclusion of prior bear markets.
In response, Van de Poppe stated that both gold and silver markets were "done for now."
"The markets are dropping massively, as they are down 10-15% the past 24 hours," he posted on X.
"I'm not saying: the bull is over. No, far from it. But it will consolidate, and that's also the trigger you'd like to see for Bitcoin."