Bitcoin may be approaching its most significant turning point in years, with one of the key valuation indicators, BTC Yardstick, currently at -1.6, a standard deviation below the long-term average, which is a signal indicating that this pioneering crypto is being undervalued the most since the bear market low in 2022
Historically, this level often corresponds with the lows of significant cycles, including the years 2011, 2017, 2020, and 2022.
The BTC index indicates the lowest valuation in years.
This yardstick measures the market price of Bitcoin by comparing it to the cost and power used to secure the network, including the infrastructure of mining and operational expenses.
BTC Yardstick at –1.6σ = Bitcoin is significantly undervalued. Other events: the bear market low of 2022, the low during the COVID crisis of 2020, the base before the price surge of 2017, the bear market low of 2011... all these events coincided with the strongest accumulation... and are considered to have hit the bottom! Analyst Gert van Lagen stated in a post.
Meanwhile, signs of undervaluation have emerged alongside unprecedented accumulation activity. Over the past 30 days, BTC whales and major holders have purchased 269,822 BTC, amounting to approximately 23.3 billion USD, according to Glassnode. This is the largest monthly accumulation since 2011.
The largest accumulation in 13 years; the 4-year cycle has ended; the supercycle has arrived, said crypto analyst Kyle Chasse.
This large-scale purchase mostly occurred in wallets holding between 100 and 1,000 BTC. This reflects that both high-net-worth individuals and small institutions are preparing for opportunities in the market recovery.
Market direction follows Bitcoin's slight correction as discontent creates opportunities.
Despite record-high accumulation levels and undervaluation, Bitcoin's price has faced downward pressure throughout this year. According to Eric Balchunas, an ETF analyst at Bloomberg, recent losses are still considered minor compared to previous gains.
The launch of the spot Bitcoin ETF in early 2024 contributed significantly to the price surge, pushing the asset to a new peak near 69,000 USD in March 2024.
Overall, Bitcoin returned 155.42% in 2023 and 121.05% in 2024 before declining by 7% compared to the beginning of the year. This reflects that the current correction may be a normal adjustment after a significant price surge.
Analysts say that market recoveries often begin not when hope is at its highest, but at times when investors are weary.
We are no longer afraid. We are all tired, tired of waiting, tired of trusting. But listen, market recoveries will not start when hope is high, but when people are tired, frustrated, and ready to give up, said analyst Ash Crypto.
The convergence of historically low valuations, record-high whale accumulation, and reduced leverage indicates that Bitcoin may be approaching another cyclical turning point.
Although a specific timing cannot yet be identified, these indicators suggest a special opportunity period for long-term investors.
