Key TakeawaysBitcoin’s MVRV ratio has fallen below its 365-day moving average, a signal that historically marks local market bottoms.Analysts say Bitcoin has entered an “undervaluation phase,” often followed by large rallies.Capital rotation from gold could further fuel Bitcoin’s rebound.Bitcoin Enters Undervaluation PhaseBitcoin may be forming a cyclical bottom, with one of the market’s most-watched valuation metrics flashing a bullish reversal signal.According to CryptoQuant analyst ShayanMarkets, Bitcoin’s Market Value to Realized Value (MVRV) ratio — which measures whether the asset is overvalued or undervalued relative to its realized cap — recently slipped below its 365-day moving average.“Historically, each time the ratio dropped below the 365 SMA, it has marked a buying opportunity and a local bottom signal,” ShayanMarkets wrote in a Monday QuickTake update.Historical Precedent Points to ReboundThe MVRV ratio now sits near 1.9, just below its 365-day average. Similar readings in mid-2021, June 2022, and early 2024 preceded 135%, 100%, and 196% rallies in Bitcoin’s price, respectively.With Bitcoin having dropped about 18% from its $126,000 all-time high to a recent low of $103,530, the MVRV decline reflects a reset of speculative excess and renewed accumulation by long-term holders.“If this metric begins to turn upward from current levels, it could confirm that the recent sell-off was a cyclical bottom formation, supporting a renewed bullish phase into Q4,” the analyst added.Rotation From Gold Could Accelerate BTC RecoveryAnalysts suggest that capital rotation from gold could be a key driver of Bitcoin’s next leg up.Data from Cointelegraph Markets Pro and TradingView shows gold has fallen 8.5% from its recent all-time high of $4,380 per ounce, prompting speculation that investors may be shifting toward risk assets.“If this continues, it would mean gold has peaked for the moment — a sign that rotation into Bitcoin and altcoins may be starting,” said MN Trading Capital founder Michaël van de Poppe on X.A softer U.S. Consumer Price Index (CPI) print this Friday could further boost the case for rate cuts and trigger renewed risk-on appetite, he added.Analysts Eye $115K–$190K Near-Term TargetsShould historical MVRV patterns repeat, Bitcoin could rebound to $115,000 in the short term — and possibly $190,000 if the final leg of the current bull cycle unfolds.Meanwhile, analysts at Bitwise estimate that even a 5% capital shift from gold into Bitcoin could push BTC to $240,000, underscoring the growing macro correlation between the two assets.
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