Bitcoin Flirts With ‘Undervalued’ As MVRV Slides Toward 1

Overview

Bitcoin is approaching a historically significant level on the MVRV ratio, which suggests that it may be undervalued. This development comes as traders are observing a shift from a period of distribution to potential accumulation following a four-month decline from its all-time high.

Bitcoin’s MVRV Ratio and Market Implications

According to a contributor known as Crypto Dan, Bitcoin is nearing the undervalued zone based on the MVRV ratio. This metric is significant because it has historically indicated compelling risk-reward opportunities for long-term investors when it falls below 1. Currently, the MVRV ratio is around 1.1, suggesting that Bitcoin is close to this undervalued threshold. The importance of this ratio lies in its historical tendency to compress toward 1 during previous market cycles, particularly at cycle lows.

In his post on X, Crypto Dan noted that Bitcoin has been in a decline since reaching its all-time high in October 2025. He emphasized that the current conditions are reminiscent of past market bottoms, which often coincide with MVRV ratios below 1. The chart accompanying his analysis illustrated this point, showing the ratio at approximately 1.10 and highlighting previous instances when it dipped below 1.

However, Crypto Dan also provided a cautionary note, urging traders not to expect the current market behavior to mirror past cycles. He explained that in the current cycle, Bitcoin did not experience a significant rise into the overvalued zone during the preceding uptrend. This observation suggests that the pattern of decline may also differ from previous cycles, prompting traders to adjust their strategies accordingly.

This discussion prompted a brief exchange in the replies, where one user speculated that if Bitcoin’s recovery were to happen faster than in the past, the subsequent downturn could also resolve more quickly. Crypto Dan responded to this notion by stating that he is setting different criteria for evaluating the current situation due to the unique characteristics of this cycle.

Additional Indicators of Market Sentiment

In a related analysis, analyst Will Clemente pointed to two well-known benchmarks that indicate potential market bottoms: the Mayer multiple and the 200-week moving average. He indicated that both of these indicators are currently in historically constructive ranges. The Mayer multiple, which measures the distance from the 200-day moving average, is around 0.60. Additionally, the 200-week moving average is noted to be near a specific price level, with Bitcoin trading about 15% above it and not yet having touched this line during the current drawdown.

From author

The discussions surrounding Bitcoin’s MVRV ratio and other benchmarks illustrate the complex dynamics at play in the cryptocurrency market. As traders analyze these metrics, it becomes clear that the sentiment around Bitcoin is cautiously optimistic, with many looking for signs of a potential accumulation phase. However, the unique circumstances of the current cycle add layers of complexity that require careful consideration.

Impact on the crypto market

• The MVRV ratio nearing 1 suggests that Bitcoin may be undervalued, potentially attracting long-term investors.
• Historical patterns indicate that Bitcoin often sees significant market activity when the MVRV falls below 1.
• Divergence from previous cycles may lead to different trading behaviors and strategies among market participants.
• The Mayer multiple and 200-week moving average being in accumulation territory could signal a constructive environment for Bitcoin.
• Ongoing discussions among analysts highlight varying perspectives on market recovery speed and potential strategies moving forward.