Bitcoin Nears Undervalued Zone as Key Metrics Signal Accumulation

CryptoQuant analyst Crypto Dan, in a detailed post on X, highlighted that Bitcoin is “approaching the undervalued zone” based on the Market Value to Realized Value (MVRV) ratio. This metric, which compares Bitcoin’s current market capitalization to the aggregate cost basis of all coins, has historically served as a reliable gauge for market cycles. Dan noted that “when the MVRV ratio falls below 1, Bitcoin is considered to be undervalued.” With the current value hovering around 1.1, the market is nearing this critical psychological and technical level.

The significance of this approach lies in historical precedent. The chart shared by Crypto Dan illustrates that the MVRV ratio has consistently compressed toward 1 around prior cycle lows, with sub-1.0 dips highlighted during past bottoming windows. This pattern suggests that when investor sentiment turns excessively negative and prices fall below the average cost basis of holders, the asset becomes statistically undervalued. The current drawdown from the October 2025 peak represents approximately four months of declining prices, setting the stage for this metric to enter its historically significant range.

Despite the promising signal, Crypto Dan issued a crucial caveat that distinguishes the current market environment from previous cycles. He explicitly warned traders against assuming “the current setup will rhyme perfectly with prior drawdowns.” The key difference, according to his analysis, is that “in this cycle, Bitcoin did not sharply rise all the way into the overvalued zone during the uptrend.” This more tempered advance preceding the current decline suggests the subsequent downturn “may also appear differently from the previous bottom zones.”

This nuanced perspective sparked discussion among market observers. One user, onlyus8x, proposed that if Bitcoin reached this cycle’s prior all-time high “more than three times faster than before,” the corrective phase might also resolve more quickly. Crypto Dan countered this simple speed analogy, emphasizing the need for a differentiated analytical framework. He replied that “because there are differences from your past, I personally set the criteria differently from past decline cycles by comprehensively judging these things as well.” This exchange underscores the analytical challenge of applying historical patterns to a maturing market with evolving investor behavior.

Complementing the MVRV analysis, independent analyst Will Clemente pointed to two additional long-watched price-based benchmarks entering historically constructive territory. In his assessment, “Throughout Bitcoin’s life span we have seen two indicators continue to be the best global market bottom signals: The Mayer multiple (distance from 200 day moving average) and the 200 week moving average.” Clemente concluded that “Both of these are clearly in long term accumulation territory.”

The data shared by Clemente shows a Mayer Multiple reading of approximately 0.60. Historical backtests indicate that when this indicator, which measures Bitcoin’s price deviation from its 200-day moving average, falls to this level, it has frequently coincided with market bottoms. Simultaneously, Bitcoin’s 200-week moving average sits near $57,926. At the time of analysis, Bitcoin traded at $67,277, placing it about 15% above this critical long-term trend line. Clemente noted that Bitcoin has “not yet touched” this 200-week MA during the current drawdown, leaving room for further potential downside before a definitive test of this major support level occurs.

The convergence of these metrics—the MVRV ratio nearing 1, the Mayer Multiple at 0.60, and Bitcoin’s price approaching its 200-week moving average—paints a picture of a market entering what analysts term “long-term accumulation territory.” These signals suggest that for investors with extended time horizons, the current risk-reward profile is becoming increasingly compelling. The four-month decline from the October 2025 high appears to be transitioning the market phase from distribution, where investors take profits, to accumulation, where strategic buyers establish positions.

However, the overarching theme from both Crypto Dan and Will Clemente is one of cautious optimism tempered by analytical rigor. The core takeaway is not that a bottom is guaranteed, but that key valuation and momentum indicators are aligning in ranges that have historically preceded significant rallies. The final note of prudence comes from recognizing this cycle’s unique character: without the extreme overvaluation spike seen in prior bull markets, the path to a sustainable recovery may not follow the exact historical blueprint. For market participants, this means preparing for accumulation opportunities while remaining vigilant to the possibility of a bottoming process that differs from past patterns.