Crypto: Bitcoin Hits ‘fire-sale’ Value As Etf Outflows Surge: Bitwise

Bitcoin flashed a major discount signal after capital outflows increased following BTC’s abrupt drop below $75,000. Historical data now points to a potential 10% rebound rally in the short-term.

Bitcoin (BTC) price fell to a year-to-date low of $74,555 on Monday, marking a 40% drawdown from its all-time high. The move coincided with $1.3 billion in net outflows from the global Bitcoin exchange-traded products (ETPs) last week.

This drawdown coincided with extreme bearish sentiment and low valuation metrics, but the silver lining could be analysts’ view that a potential asymmetric trade setup is in the works.

Bitcoin’s 2-year rolling MVRV z-score has fallen to its lowest level on record, signaling extreme undervaluation.

Global Bitcoin ETPs saw $1.35 billion in weekly net outflows, led by $1.49 billion from US spot exchange-traded funds (ETFs).

Bitcoin’s daily RSI dropped into the 20 to 25 range, a zone that has preceded 10% rebounds in every instance since August 2023.

According to the Weekly Crypto Market Compass report by Bitwise, BTC’s dip has driven its two-year rolling Market-Value-to-Realized-Value (MVRV) z-score to the lowest level ever recorded, a metric linked with undervaluation, “signalling fire-sale valuations for Bitcoin”.

The MVRV z-score measures how far Bitcoin’s market value deviates from the aggregate cost basis of investors, adjusted for historical volatility.

Bitwise’s Cryptoasset Sentiment Index also dropped to levels last seen during the October 2023 liquidation crash, with only 2 of 15 tracked indicators remaining above their short-term trend.

Capital fund flows reinforced the bearish tone. Global crypto ETPs recorded $1.73 billion in net outflows last week, following $1.81 billion the week prior. Bitcoin products alone accounted for $1.35 billion, with the bulk driven by US spot BTC ETFs.

Source: CoinTelegraph