Bitcoin (BTC) prices have fallen more than 8% in the past week alone, leading to increased bearish sentiment across the market. The downturn, as seen in the broader crypto market, has been largely attributed to institutional restructuring, the flow of money into precious metals, and the Federal Reserve’s recent decision to leave interest rates unchanged.
To show how cautious Bitcoin investors are, data from CoinCodex shows that the Fear & Greed Index stands at 16, indicating that the market is consumed by extreme fear. However, recent on-chain analysis indicates that Bitcoin may be approaching a turnaround.
Hold on! Bitcoin Market Winter Is Almost Over – Analyst
According to market analysts Michaël van de Poppe and James Easton, the Bitcoin MVRV Z-Score illuminates the possible end of the bearish market phase seen over the past four months. Notably, after touching the price level of $ 126,000 at the beginning of October, BTC experienced a lot of selling pressure, resulting in the price doubling to the region of $ 80,000.
In context, MVRV measures the current market value of Bitcoin as the average value (value realized) when all coins were last traded. When paired with the Z-Score, it analyzes how far the market value deviates from the perceived value, expressed in standard deviation. The MVRV Z-Score helps identify whether Bitcoin is overvalued or undervalued; therefore, it can be used to highlight potential market lows or highs.
Based on the analysis presented by James Easton, the current Z-Score of Bitcoin is lower than those recorded during the bear markets in 2015, 2018, 2020, and 2022, which shows that the digital asset is trading at deeply overlooked levels that are not present in previous market cycles. Although the current decline in value is much lower than in previous cycles, Van De Poppe explains that the MVRV Z-Score data shows that the bear market has reached its final stages, with its end in sight.
This post suggests that BTC may produce a significant rebound with immediate targets set at $90,000 and $97,500.
Many Reasons to Be a Bully – Van De Poppe
In a separate X post, Michaël Van De Poppe shares some developments that point to the coming Bitcoin recovery. One of them was the last time the RSI on the BTC/Gold chart fell below 30, marking the end of the last Bitcoin market. In addition, the gold market seems to have succeeded after reaching a high of $5,600 on January 30. An experienced analyst also highlights that the crypto mega rally followed the last time such an improvement occurred in the precious metal.
At press time, BTC is valued at $83,645, as its daily trading volume rises to around $72.31 billion.
Featured image from iStock, chart from Tradingview
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