Key Takeaways
- • Bitcoin's two-year rolling MVRV z-score has reached an all-time low, signaling extreme undervaluation and "fire-sale" conditions according to Bitwise's Weekly Crypto Market Compass.
- • Global Bitcoin ETPs experienced $1.35 billion in weekly net outflows, with U.S. spot Bitcoin ETFs accounting for $1.49 billion of that exodus, reflecting broad institutional investor capitulation.
- • Bitcoin's daily Relative Strength Index (RSI) has fallen into the 20–25 range, a historically oversold zone that has preceded 10% price rebounds in every instance since August 2023.
- • Bitwise's Cryptoasset Sentiment Index has deteriorated to levels last observed during the October 2023 liquidation-driven crash, with only 2 of 15 tracked indicators remaining above short-term trends.
Summary
Bitcoin has entered a period of extreme undervaluation, according to analysis from Bitwise Asset Management. The firm's latest Weekly Crypto Market Compass indicates that Bitcoin's two-year rolling Market Value to Realized Value (MVRV) z-score—a metric comparing market capitalization to the aggregate on-chain cost basis of investors—has dropped to its lowest level ever recorded. This metric is widely used by institutional investors as a gauge of asset overvaluation or undervaluation relative to historical volatility patterns.
The deterioration in Bitcoin valuations has coincided with substantial fund outflows from crypto exchange-traded products globally. Data shows that global Bitcoin ETPs recorded $1.35 billion in net outflows during the most recent week, driven primarily by $1.49 billion in exits from U.S. spot Bitcoin ETFs. These outflows reflect a pronounced shift in sentiment among institutional and retail investors who have access to cryptocurrency exposure through regulated fund structures.
Bitwise's broader sentiment analysis reveals deepening bearish conditions across the cryptocurrency market. The firm's Cryptoasset Sentiment Index has fallen to levels not seen since the October 2023 liquidation-driven crash, with only 2 of 15 tracked indicators remaining above their short-term trends. This compression of positive sentiment indicators suggests widespread pessimism across major market participants and technical measures.
Technical data provides a potential counterpoint to this bearish backdrop. Bitcoin's daily Relative Strength Index (RSI) has fallen into the 20–25 range, a historically oversold zone. According to the primary source data, this RSI level has historically preceded 10% price rebounds in every occurrence since August 2023, suggesting potential technical support for recovery. However, this technical signal remains speculative and contingent on broader sentiment shifts and macroeconomic developments.
The deterioration in Bitcoin valuations has coincided with substantial fund outflows from crypto exchange-traded products globally. Data shows that global Bitcoin ETPs recorded $1.35 billion in net outflows during the most recent week, driven primarily by $1.49 billion in exits from U.S. spot Bitcoin ETFs. These outflows reflect a pronounced shift in sentiment among institutional and retail investors who have access to cryptocurrency exposure through regulated fund structures.
Bitwise's broader sentiment analysis reveals deepening bearish conditions across the cryptocurrency market. The firm's Cryptoasset Sentiment Index has fallen to levels not seen since the October 2023 liquidation-driven crash, with only 2 of 15 tracked indicators remaining above their short-term trends. This compression of positive sentiment indicators suggests widespread pessimism across major market participants and technical measures.
Technical data provides a potential counterpoint to this bearish backdrop. Bitcoin's daily Relative Strength Index (RSI) has fallen into the 20–25 range, a historically oversold zone. According to the primary source data, this RSI level has historically preceded 10% price rebounds in every occurrence since August 2023, suggesting potential technical support for recovery. However, this technical signal remains speculative and contingent on broader sentiment shifts and macroeconomic developments.
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