Bitcoin Trades Below Fair Value As Selling Pressure Cools Down

Bitcoin is currently trading well below its historical valuation range. Fresh data reveals that selling pressures are finally starting to ease across the market. The MVRV Z Score sits near 0.42, which is quite low compared to the long term average of 1.7. This indicator has stayed below that historical mean for a full month and even dipped to 0.185 in late June.

Prices are hovering near $65,000 after weeks of quiet consolidation between $64,000 and $66,000. While the low MVRV score suggests the top cryptocurrency is undervalued, it also shows that the market has not suffered the heavy panic selling seen at previous cycle bottoms. Unlike the deep 2022 bear market, holders are not dumping their coins aggressively enough to trigger a classic capitulation phase.

On chain metrics show a shift from loss selling to profit taking over the past week. Investors locked in net profits of up to $500 million recently, reversing the heavy losses seen in June and mid July. Analysts point out that while selling pressure is cooling down, the market may not have completed its full cyclical bottom just yet.

Traders should watch the MVRV Z Score closely in the coming days. A move back toward the historical average of 1.7 points to improving conditions, while a drop into negative territory could signal further downside before a real bottom forms.