Bitcoin’s current price decline differs from past cycles, as it has not experienced a sharp rise into overvalued zones.
Bitcoin (BTC) is nearing undervalued territory for the first time in three years as its market value to realized value (MVRV) ratio approaches a critical inflection point. The MVRV ratio compares Bitcoin’s market cap to the price at which its supply last moved, often seen as a key indicator of Bitcoin’s market cycle. According to CryptoQuant’s recent research, the MVRV ratio has fallen to 1.13, signaling that the current Bitcoin price is near levels that might be considered undervalued.
As Bitcoin’s price dipped below $60,000 last week, the MVRV ratio dropped to 1.13, marking its lowest point since March 2023. The ratio below 1 suggests that Bitcoin’s supply is undervalued at current price levels. CryptoQuant contributor Crypto Dan noted that Bitcoin has been on a downtrend for about four months following its all-time high in October 2025, and is now entering what could be considered an undervaluation zone.
“When the MVRV ratio falls below 1, Bitcoin is regarded as undervalued,” Crypto Dan commented, adding that the current reading of around 1.1 suggests a near-undervalued state.
The MVRV ratio last registered below 1 in early 2023. At that time, Bitcoin was trading at about $20,000. The ratio surged to a peak of 2.28 during Bitcoin’s all-time high in October 2025, showing a sharp contrast to the present situation. This change highlights a difference in the current cycle compared to past ones.
The current decline in Bitcoin price has raised questions about its potential bottom. CryptoQuant’s analysis shows that Bitcoin’s market cap has dropped significantly, with the MVRV ratio falling into the undervalued zone. This suggests that the market is entering a critical phase, with the possibility of a trend reversal.
Research also highlights that Bitcoin’s price behavior during this cycle deviates from typical MVRV patterns. Historically, Bitcoin has experienced sharp rises into overvalued zones during bull markets, but this time the price has not reached such highs.
“Bitcoin did not experience a sharp rise into a clearly overvalued zone during the recent bull cycle,” the CryptoQuant report states.
According to crypto trader and analyst Michaël van de Poppe, the Z-score of the MVRV ratio has recently reached historic lows. The Z-score measures the standard deviation of Bitcoin’s market cap in relation to the MVRV ratio. Van de Poppe pointed out that Bitcoin’s Z-score is now lower than during previous market bottoms, including those in 2015, 2018, the COVID crash in 2020, and 2022.
Furthermore, CryptoQuant contributor GugaOnChain described Bitcoin as being in a “capitulation zone” and suggested that the market is nearing an accumulation phase.
