Bitcoin (BTC) price fell more than 8% in the past week alone, heightening bearish sentiment across the market. As seen in the broader cryptocurrency market, the decline is largely due to institutional realignment, precious metals inflows, and the Federal Reserve’s recent decision to leave interest rates unchanged.
To show just how cautious Bitcoin investors are, data from CoinCodex shows that the Fear and Greed Index is at 16, indicating that the market is ravaged by extreme fear. However, recent on-chain analysis suggests that Bitcoin may be approaching a tipping point.
Hold on! Bitcoin Market Winter Is Almost Over – Analyst
Bitcoin’s MVRV Z-Score is hinting at a potential end to the bear market phase seen over the past four months, according to market analysts Michaël van de Poppe and James Easton. Notably, after reaching the $126,000 price level in early October, BTC came under significant selling pressure, with the price retesting the $80,000 region twice.
For context, MVRV measures the current market value of Bitcoin as the average price all coins last moved at (realized value). When used with Z-Score, it analyzes how much market value deviates from realized value expressed as standard deviation. The MVRV Z-score helps identify whether Bitcoin is overvalued or undervalued. It can therefore be used to highlight potential market bottoms or tops.
According to analysis presented by James Easton, Bitcoin’s current Z-Score is lower than that recorded during the bear markets of 2015, 2018, 2020, and 2022. This indicates that the digital asset is trading at a deep level of undervaluation not seen in previous market cycles. While the decline from the current all-time high has been relatively small compared to previous cycles, Van De Poppe explains that the MVRV Z-Score data indicates that the bear market has reached its later stages and the end may now be in sight.
This assumption suggests that BTC could soon stage a significant rally with potential immediate targets set at $90,000 and $97,500.
More reasons to be bullish — Van De Poppe
In a separate X post, Michaël Van De Poppe shares other developments that point to a Bitcoin recovery being imminent. One such event occurred when the RSI on the BTC/Gold chart fell below 30 for the last time, signifying the end of the last Bitcoin market. Moreover, the gold market appears to have peaked after hitting a new all-time high of $5,600 on January 30. The seasoned analyst also highlights that the last time this development occurred in the precious metal, it was followed by a cryptocurrency mega rally.
As of press time, BTC is valued at $83,645, with daily trading volume rising to approximately $72.31 billion.
Featured image from iStock, chart from Tradingview
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