Bitcoin (BTC) prices have fallen more than 8% in the last week alone, adding to the bearish mood across the market. This downward trend across the broader crypto market is largely due to institutional repositioning, inflows into precious metals, and the Federal Reserve’s recent decision to keep interest rates on hold.
To show how cautious Bitcoin investors are, data from CoinCodex shows that the Fear & Greed Index is 16, indicating that the market is ravaged by extreme fear. However, recent on-chain analysis shows that Bitcoin may be nearing a tipping point.
Owned! Bitcoin market winter is almost over — Analyst
According to market analysts Michael Van de Poppe and James Easton, the Bitcoin MVRV Z-Score indicates that the market bearish phase of the past four months may be over. In particular, BTC came under significant selling pressure after touching the $126,000 price level in early October, resulting in the price retesting the $80,000 area twice.
For context, MVRV measures Bitcoin's current market value at the average price at which all coins were last moved (realized value). When combined with the Z-score, it analyzes how far market value deviates from realized value, expressed as a standard deviation. The MVRV Z-score helps identify whether Bitcoin is overvalued or undervalued. Therefore, it can be used to highlight potential market bottoms or tops.
Based on an analysis published by James Easton, Bitcoin's current Z-score is lower than those recorded during the bear markets of 2015, 2018, 2020, and 2022, indicating that the digital asset is trading at significant undervaluation levels not seen in previous market cycles. Although the decline from current all-time highs is relatively small compared to previous cycles, the MVRV Z-Score data suggests the bear market has reached a late stage and is likely coming to an end, Van de Poppe said.
This hypothesis suggests that BTC could generate a significant rebound soon, with near-term price targets set at $90,000 and $97,500.
More reasons to be bullish — Van de Poppe
In another X post, Michaël Van De Poppe shares other trends that hint at an impending Bitcoin recovery. One of them was the last time the RSI on the BTC/Gold chart fell below 30, marking the last Bitcoin market end. Moreover, the gold market appears to have hit a ceiling after reaching an all-time high of $5,600 on January 30th. The veteran analyst also highlighted that the mega rally in cryptocurrencies occurred after the last time such a development occurred in precious metals.
At the time of writing, the value of BTC is $83,645, with daily trading volume reaching approximately $72.31 billion.
Featured images from iStock, charts from Tradingview
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