Bitcoin Shifts from Undervaluation Toward Market Equilibrium

• Bitcoin climbs from -0.58 to -0.32 on NVT, indicating partial recovery while still undervalued versus network usage.

• Institutional demand declines, with US ETFs cutting 24K BTC, echoing patterns seen before the 2022 bear market.

• Price below 365-day average, funding rates low, suggesting bear conditions but limited downside near $56K support.

Bitcoin is showing signs of recovery after a prolonged period of undervaluation, signaling a potential shift in investor behavior. According to CryptoQuant analyst MorenoDV_, the market is transitioning from deep discounting toward equilibrium.

This move follows a historically depressed NVT Golden Cross, a metric comparing Bitcoin’s market value to network transaction activity. By tracking the ratio, investors can gauge whether the network’s price aligns with actual usage.

MorenoDV_ explained, “The present setup points to a market transitioning from deep undervaluation toward equilibrium, a phase historically associated with accumulation.” In essence, the price of Bitcoin has started to rise from a -0.58 deviation to about -0.32, signaling a partial recovery.

The signal is still negative, though, indicating that Bitcoin is still priced cautiously in relation to its network utility. As a result, rather of making random purchases, market players are allocating capital selectively.

NVT Golden Cross Highlights Structural Undervaluation

The NVT Golden Cross compares short-term and long-term market behavior. When short-term NVT falls below long-term trends, Bitcoin’s market cap lags behind transaction activity. Historically, these deviations occur during forced deleveraging and periods of risk aversion.

Moreover, they often mark prime accumulation phases. Consequently, traders watching this indicator can identify when Bitcoin is fundamentally undervalued, independent of price sentiment.

In addition, CryptoQuant notes that recent cycles reflect diminishing demand growth. After three major spot demand waves since 2023—driven by US spot ETF launches, the presidential election outcome, and treasury accumulation—the market now faces contraction.

Institutional demand is declining, with US spot ETFs reducing holdings by 24,000 BTC in Q4 2025. Similarly, addresses holding 100–1,000 BTC show below-trend growth, mirroring patterns seen before the 2022 bear market.

Price and Market Implications

The 365-day moving average, a crucial support level between bull and bear markets, has been crossed by Bitcoin. Furthermore, funding rates for perpetual futures are at their lowest points since December 2023. These patterns indicate a declining willingness to take risks and a bear market.

However, downside risk appears limited. Realized price near $56K suggests a potential 55% drawdown from the all-time high—the smallest on record. Intermediate support is expected around $70K.