Freysa AI (fai) 
Bitcoin Price: Is the Cryptocurrency Market Undervalued?
Despite a recent pullback, Bitcoin’s performance this year has been strong, with a 120% increase that surpasses popular assets like the Nasdaq 100 and the S&P 500 indices. However, the cryptocurrency has retreated to $97,000 from its all-time high of $108,427 after the Federal Reserve indicated only two interest rate cuts in 2025.
Market Value to Realized Value (MVRV) Score Suggests Undervaluation
The recent Bitcoin pullback has affected investors, as evident in spot ETF flows. According to recent data, these funds experienced net outflows of $276 million, a day after shedding $680 million in assets. This suggests that some investors believe Bitcoin may have reached its peak.
However, the MVRV-Z score indicates that Bitcoin’s price is still cheap even after reaching a record high last week. The MVRV-Z score has dropped to 2.84 from last week’s high of 3.3. Historically, an MVRV-Z score below 3.7 is a sign that an asset is undervalued.
The MVRV-Z score is an important indicator that assesses the market value and relative value of a coin. It is calculated by subtracting the realized market capitalization from the circulation market value and then dividing the figure by the standard deviation.
Bitcoin’s Strong Fundamentals
Bitcoin also has strong fundamentals that could support its price in the long term. Key points to consider:
* The number of Bitcoins in circulation has dropped to a multi-year low of 2.24 million.
* More investors are buying and storing Bitcoins in self-custody wallets.
* Companies like Marathon Digital and MicroStrategy have continued to accumulate Bitcoins this year, with MicroStrategy now holding over 439,000 coins.
* The stablecoin market cap has jumped to almost $210 billion, up from $122 billion a year earlier.
* Bitcoin’s annual inflation rate has continued falling, moving to 1.12% from the 2015 high of almost 12%.
These factors, combined with the favorable MVRV score, suggest that Bitcoin’s price could recover strongly in the next few weeks.
“The cup and handle pattern points to a rally to $122,000 in this bullish cycle.”
As the cryptocurrency market continues to evolve, it’s essential to stay informed about the latest developments and trends. For more news and insights on Bitcoin and other cryptocurrencies, visit Global Crypto News.
