Bitcoin Nearing Fair Value Range as Market Weakness Persists

Recent market volatility has positioned Bitcoin in a critical valuation zone. According to technical analysis from Murphy as reported by Odaily, the current price level represents a fair value gap opportunity, with the MVRV (Market Value to Realized Value) indicator pointing to an equilibrium price around $98,000 based on historical averages. This metric effectively captures the midpoint of rational market valuation, which analysts view as the natural regression target for cyclical corrections.

On-Chain Metrics Paint a Mixed Picture

The profitability snapshot reveals telling signs of market fatigue. Bitcoin’s profitable supply indicator (PSIP) currently sits at 72%, placing it at the upper threshold of typical bull market correction ranges (70%-75%). Meanwhile, the inverse metric tells an equally important story—approximately 40% of circulating coins (excluding Satoshi’s holdings and permanently lost tokens) are now underwater, reflecting genuine pain across retail and smaller holders.

What stands out is the sharp deterioration in long-term holder positions. These sophisticated investors, who typically accumulate during pessimistic phases, are experiencing substantial unrealized losses—a pattern that has historically coincided with market bottoms or regime shifts.

The Critical Fork Ahead

The gap between current Bitcoin prices and the average cost basis of active holdings has compressed significantly, suggesting that speculative premiums have largely evaporated. This convergence creates two possible scenarios: if market participants remain rational, this zone should attract value-conscious buyers. Conversely, if selling pressure continues beyond this level, the market could signal transition from a correction within an ongoing bull cycle to the onset of an entirely new bearish phase.

Murphy’s analysis emphasizes that this inflection point may represent either the limit of healthy bull market consolidation or the beginning of something more structural—making this a pivotal moment for market participants to reassess their risk exposure.