Bitcoin continues to battle supply challenges below the $70,000 level, with numerous attempts to initiate an upward rebound thwarted by relentless selling pressures. The ongoing struggle to maintain rallies has fostered a cautious market sentiment. Analysts increasingly caution that if current dynamics persist, a deeper correction below the $60,000 threshold could loom on the horizon. Recent weeks have seen a rise in volatility coupled with tightening liquidity conditions, driving a defensive stance among both retail and institutional players.
Amidst this tumultuous atmosphere, a recent analysis sheds light on a potentially more optimistic phase for Bitcoin. The CryptoQuant report outlines how Bitcoin has been on a downward trajectory for approximately four months since it peaked at about $120,000 in October 2025. While the price remains under pressure, on-chain valuations hint at the market nearing what some analysts consider an undervalued zone.
Historically, such scenarios often arise during the latter stages of correction cycles, prompting market participants to recalibrate their positions as speculative excesses wane. Though this situation cannot be interpreted as a signal for an immediate price rebound, it raises the prospect of diminishing downside risks as broader liquidity conditions show signs of improvement.
MVRV Indicators Suggest Approaching Undervaluation
The report emphasizes that valuation indicators are edging towards levels historically linked with accumulation phases. The Market Value to Realized Value (MVRV) ratio, a key on-chain metric, currently hovers around 1.1. Traditionally, MVRV readings below 1 signal that Bitcoin is trading beneath its aggregate cost basis, indicating undervaluation. Though not yet below this critical threshold, the current proximity suggests that the market may be entering a phase where downside risks could start to moderate.
Furthermore, analysts point out a significant deviation from previous cycles. Unlike earlier market rallies that saw Bitcoin soaring into overheated valuation territories before corrections, the current market indicates that the recent downturn may not adhere to the capitulatory dynamics observed in past bear markets, complicating any attempts at historical comparisons.
Strategically, the analysis recommends that periods of market turbulence often present the most advantageous opportunities for long-term positioning. For assets embarking on an overarching upward macro trend, preparations made during downturns can enhance risk-adjusted outcomes. However, this approach does not negate the near-term volatility risks intrinsic to the market, especially as macro liquidity conditions continue to vary and sentiment fluctuates.
Persistent Bearish Momentum as Bitcoin Struggles Below Key Averages
Recent price trends confirm Bitcoin’s ongoing weakness, evidenced by a clear sequence of lower highs and lower lows following the late-2025 peak of around $120,000-$125,000. The recent descent beneath the $70,000 level reinforces the bearish structure, particularly as the asset remains significantly below both the 50-week and 100-week moving averages, both of which reveal a downward sloping trajectory—a sign of persistent distribution rather than a mere correction.
The aggressive drop into the mid-$60,000 range was marked by a spike in trading volume that indicates forced liquidations or considerable spot selling rather than standard profit-taking strategies. While Bitcoin has attempted minor stabilization between $65,000 and $68,000, the lack of substantial rebound momentum underscores a cautious approach from buyers. Historically, such tepid recoveries following high-volume declines tend to reflect a market still burdened with uncertainty, rather than signaling an imminent reversal.
Moving forward, the critical focus from a technical perspective now rests near the psychological barrier of $60,000, which could serve as a temporary support should selling pressures continue. On the flip side, any sustained recovery would demand reclaiming the $70,000 mark and establishing stabilization above key moving averages. Absent these conditions, the overarching trend remains defensive, leaving the market in search of clearer equilibrium.
