The alignment of MVRV and NUPL within the BCMI suggests that Bitcoin’s recent correction has reset key market conditions.
After a strong week, Bitcoin is trading slightly above $75,000 as risk assets gain momentum amid expectations of a possible agreement between the United States and Iran. At the same time, fresh data indicates the asset is now approaching a major historical pivot area.
Value Accumulation Zone Emerges
Bitcoin’s Combined Market Index has dropped into the 0.2 to 0.3 range, bringing it close to a critical historical support level. According to a recent report from CryptoQuant, this zone has historically marked periods when Bitcoin was significantly undervalued, though it does not guarantee an immediate rebound.
The BCMI blends several on chain and sentiment indicators, including MVRV, NUPL, SOPR, and the Fear and Greed Index. Current readings show that both valuation and investor sentiment have returned to levels last seen in early 2023 following the recent correction.
Meanwhile, the 90 day moving average continues to trend downward, signaling that selling pressure has not fully disappeared. Analysts suggest waiting for this trend to stabilize before confirming that the market has fully absorbed the recent downturn.
Despite this, current conditions point to lower downside risk compared to long term upside potential, indicating that the market may be entering a phase of value accumulation.
Market sentiment is also shifting. Analyst Ali Martinez noted that many traders are now positioning for further upside. The latest price move triggered liquidations of nearly $80 million in short positions, pushing the market toward a more bullish stance.
Key clusters of long positions are now concentrated around $70,000, $65,000, and $57,000. These levels could act as liquidity zones that draw price action, potentially clearing excess leverage before the next upward move.
Concerns About Further Downside
Not all analysts are convinced the correction is over. Early Bitcoin supporter Davinci Jeremie warned that the market may not have reached its cycle bottom yet.
He pointed to similarities between the recent drop below $60,000 and the decline seen in mid 2022. According to his view, the market could still face a phase of maximum pain, including the possibility of another capitulation event before establishing a true bottom.
He compared this potential scenario to the fallout from the FTX collapse, which led to widespread liquidations and briefly pushed Bitcoin below $16,000 at the time.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
