Bitcoin BTC$91,453.60 For the first time in about two years, the network value temporarily fell below the network value based on Metcalf value modeling, said network economist Timothy Peterson.
This usually signals a late stage of market reset, he said.
“This doesn't necessarily indicate a bottom, but it does indicate that most of the leverage has been removed and the 'bubble' has deflated,” Peterson said.
Metcalfe Value uses activity and user base growth to estimate the fundamental value of a network and has historically provided useful context during major cycle transitions.
The drop below network value coincided with Bitcoin's steepest decline this cycle, dropping by about 36% and pushing its price to about $80,000. This move depleted leverage, eliminated excess speculation, and set the stage for a sharp rebound. Bitcoin then rebounded above $90,000 as buyers intervened and network conditions stabilized.
During the 2022 bear market, Bitcoin traded below the Metcalf price throughout the period, while activity and sentiment weakened. Since the start of the new cycle in early 2023, prices have consistently outperformed this benchmark, supported by increased participation and new capital inflows. This adjustment marks the first meaningful break from that trend.
Historically, periods when Bitcoin has traded below its Metcalf value have resulted in strong forward returns. Under these conditions, 12-month performance was positive 96% of the time, with average growth of 132%, compared with 75% and 68% in other periods, Peterson said.
Tailwind for network growth
Additionally, the supply of long-term holders (LTH) has increased significantly over the past 10 days, increasing by approximately 50,000 BTC. LTH is defined as an investor who has held Bitcoin for at least 155 days. This cohort has been one of the main sources of selling pressure over the past 12 months. This reduction in sell-side pressure should provide a meaningful tailwind for Bitcoin price as the coin continues to mature out of short-term speculation and into LTH wallets, and as LTH accumulates rather than circulates across the net.
