Bitcoin Undervalued Amid Low Activity, Awaits Breakout
Key Takeaways
- Bitcoin is currently showing signs of being undervalued.
- Historically, similar phases have been followed by strong price increases.
- Long-term holders are reducing available market liquidity.
- A sustained upward trend heavily depends on the participation of retail investors.
- Macroeconomic uncertainties and political developments are slowing momentum.
Bitcoin in the Undervaluation Zone – What Does It Mean?
According to the 30-day average of the “realized circulation,” Bitcoin (BTC) is currently in an undervaluation phase. This metric indicates how much Bitcoin has actually moved within a specific period. A low value suggests that many coins are inactive – often a sign that investors are holding for the long term.
Similar patterns were seen during the COVID crash and after China’s mining ban. In both cases, the undervaluation was followed by strong recoveries. Currently, the realized circulation is again decreasing, which may indicate a potential bottom is forming.
Less Liquidity – Maturity or Risk?
A decline in trading activity can signal a maturing market. Institutional investors and long-term holders (LTHs) are keeping their BTC, reducing the available supply. This “HODL” mentality (Hold On for Dear Life) can stabilize prices, but also dampens short-term price movements.
However, for a sustainable price increase, buyers need to become active. If sell pressure – especially from the derivatives market – isn’t absorbed, the market remains vulnerable. Currently, call options dominate, indicating a positive sentiment, but without fresh capital, momentum remains limited.
Macroeconomic Factors Slow the Upward Trend
Despite support above the $80,000 mark, Bitcoin lacks the momentum to break through the $90,000 threshold. One reason: long-term holders recently sold around 1,058 BTC at an average price of $82,000 – triggered by political news, including new U.S. tariffs.
These sales show that even experienced investors take profits during uncertain times. The Trump administration’s policies are negatively impacting retail investor confidence. As long as this group remains hesitant, trading volume will stay low – a key factor for any potential breakout.
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Retail Investors Remain Cautious
Institutional investors could see the current undervaluation as a buying opportunity. But without broad public support, price movement remains limited. Historically, it has often been retail investors who triggered major rallies through FOMO (Fear of Missing Out).
Currently, however, there is a lack of clear catalysts that could spark such a move. Unless the market environment changes, a breakout above $90,000 this quarter appears unlikely.
Our Assessment
Current data suggests a potential bottoming phase for Bitcoin. The low realized circulation and the behaviour of long-term holders point to market maturity. But without new catalysts – especially from retail investors – the path upward remains blocked.
For you as an investor, this means: closely monitor market structure. An undervaluation phase can be an opportunity, but also carries risks if the expected recovery fails to materialize. Political developments and the behaviour of institutional players will be decisive.
Sources
- CryptoQuant
- TradingView
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