BTC Hits Record Undervaluation Amid ETF Outflows: Bitwise
On Monday, the price of Bitcoin (BTC) fell year-to-date to $74,555, a 40% drop from its all-time high. The move coincided with a $1.3 billion net outflow of global bitcoin exchange-traded products (ETPs) last week.
This recording has coincided with high bearish sentiment and low valuation metrics, but the silver lining may be analysts' opinion that an asymmetric trade setup is underway.
Main Receptors:
Bitcoin's 2-year rolling MVRV z-score has fallen to a record low, indicating extreme undervaluation.
Global bitcoin ETFs saw net inflows of $1.35 billion each week, led by $1.49 billion from US spot exchange-traded funds (ETFs).
Bitcoin's daily RSI has dropped to the 20 to 25 range, a zone that is ahead of 10% retracements on all occasions since August 2023.
As sentiment collapses, “fire sale” prices emerge for Bitcoin: Bitwise
BTC's dip in the two-year rolling market-value-to-virtual-value (MVRV) z-score from an all-time low, a metric associated with low prices, “signals a fire sale for Bitcoin,” according to Bitwise's weekly Crypto Market Compass report.
The MVRV z-score measures how far Bitcoin's market value deviates from investors' total cost base, adjusted for historical volatility.
Bitwise's Cryptoasset Sentiment Index has also dropped to levels seen during the October 2023 liquidity crash, with only 2 of the 15 tracked indicators remaining above their short-term trend.
Capital fund flows reinforced the bearish tone. Global crypto ETPs recorded net inflows of $1.73 billion last week, following $1.81 billion the week before. Bitcoin products alone covered $1.35 billion, with the bulk led by US spot BTC ETFs.
The Greyscale Bitcoin Trust and the iShares Bitcoin Trust posted weekly outflows of $119 million and $947 million, respectively.
Related: Bitcoin Bull Market ‘Confirmed?' BTC price sees 4th red monthly candle
Bitcoin may find support near Monday's low.
Bitcoin may be set for a short-term support move after hitting lows around $74,500 on Monday. The daily Relative Strength Index (RSI) has dropped from the 20 to 25 range, a zone that preceded a 10% price correction on all occasions since August 2023, with June 2024 being the only late exception.
Lower timeframe data supports the possibility of a rebound, with positions on Binance and Coinbase turning positive with Cumulative Delta (CVD) as BTC rises to $79,300.
The rising position CVD shows net buying, open interest and negative compounded funding rates suggest the move is demand-driven rather than leveraged long-term, reducing immediate drawdown risk.
More than $1.8 billion worth of BTC long liquidity last week supports this view, and current liquidity is on the upside, with more than $3 billion in cumulative short positions at risk of drinking to $85,000.
Crypto trader ‘exitpump' echoed this set-up, showing significant CVD divergence between major exchanges.
Related: Trump's Fed Nomination ‘Mixed' Sign for Bitcoin, US Liquidity: Analyst
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