Bitcoin’s valuation indicator showed BTC entering an “undervaluation phase” and a potential local bottom, pointing to a near-term price rebound.
Market Analysis
Key takeaways:
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Bitcoin’s MVRV ratio dropping below its365-day averagesignals a local bottom, historically preceding big price rallies.
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Capital rotation from gold could fuel the Bitcoin rebound, according to analysts.
Bitcoin () may be poised for a sustained recovery in the coming weeks, as a key valuation metric sends a bullish signal. The BTC market might be forming a “cyclical bottom,” according to crypto analysts.
Bitcoin’s MVRV metric signals “local bottom”
Bitcoin’s Market Value to Realized Value (MVRV) ratio, an indicator that measures whether the asset is overvalued, recently slipped below its 365-day moving average, indicating that BTC could be at a local bottom, according to CryptoQuant analyst ShayanMarkets.
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The “MVRV ratio currently stands near 1.9, slightly below its 365-day moving average,” the analyst in a QuickTake analysis on Monday, adding:
“Historically, each time the ratio dropped below the 365 SMA, it has marked a buying opportunity and a local bottom signal.”
The previous times this happened were in mid-2021, June 2022 and early 2024, preceding 135%, 100% and 196% rallies in BTC price, respectively.
This consistent pattern suggests that Bitcoin is once again “entering an undervalued phase, where long-term holders typically begin accumulating,” the analyst wrote.
With an 1 on Friday from , the MVRV declined, “reflecting reduced speculative excess and growing long-term confidence,” the analyst said, adding:
“If this metric begins to turn upward from current levels, it could confirm that the recent sell-off was a cyclical bottom formation, supporting a renewed bullish phase into Q4.
If history repeats itself, Bitcoin price could embark on a prolonged recovery, with analysts projecting and even as high as .
Capital rotation from gold to boost BTC price
Data from and revealed that gold is down 8.5% from its reached on Monday.
That’s a “pretty harsh move on gold,” MN Trading Capital founder Michaël van de Poppe in a Tuesday X post.
If this continues, it would mean gold has “peaked for the moment,” a sign that “the rotation” into Bitcoin and altcoins may be starting, van de Poppe wrote.
The US (CPI) report for September is expected to be released on Friday, according to the Bureau of Labor Statistics.
“A soft CPI print should trigger the fuel for potential rate cuts and the end of the government shutdown,” the analyst said, adding:
“Bitcoin to start running as risk-on appetite comes back into play.”
Meanwhile, Bitwise analysts suggest that a 5% shift from gold to Bitcoin could drive the price of Bitcoin to $240,000.
Bitwise says a 5% capital rotation from gold to Bitcoin could send BTC to $242,391 👀
— Bitcoin Archive (@BTC_Archive)
As , gold’s ongoing pullback may trigger Bitcoin’s rebound, with technical analysis projecting a BTC price rally to $150,000–$165,000 by year’s end.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
