- Bitcoin’s price fell to a year-to-date low of $74,555, marking a 40% drawdown from its all-time high.
- Global Bitcoin exchange-traded products saw $1.35 billion in weekly net outflows, with the bulk from US spot ETFs.
- Bitcoin’s two-year rolling MVRV z-score fell to its lowest level on record, signaling extreme undervaluation.
- The daily Relative Strength Index dropping into the 20-25 range has historically preceded short-term price rebounds.
Bitcoin plunged to a year-to-date low of $74,555 on Monday, a move that coincided with massive outflows from institutional investment products. This dramatic 40% drop from its peak aligns with extreme bearish sentiment across cryptocurrency markets, as detailed in a report by Bitwise. Consequently, analysts suggest the sell-off has created a potential asymmetric trade setup.
Capital flight has been severe, according to recent data showing global Bitcoin ETPs bled $1.35 billion last week. This outflow was led by US spot ETFs, with Grayscale Bitcoin Trust and iShares Bitcoin Trust posting outflows of $119 million and $947 million, respectively. Meanwhile, Bitwise‘s analysis indicates Bitcoin’s market valuation has reached historic lows relative to investor cost basis.
The firm’s metrics reveal that Bitcoin’s two-year rolling MVRV z-score has fallen to its lowest level ever recorded, “signalling fire-sale valuations for Bitcoin”. Its Cryptoasset Sentiment Index also plummeted to October 2023 crash levels. However, technical indicators now point to potential near-term support.
Bitcoin’s daily RSI dropped into a historically oversold zone that has triggered 10% rebounds in every instance since mid-2023. Data shows a bullish spot cumulative volume delta divergence appeared on major exchanges like Binance and Coinbase. This indicates the rebound toward $79,300 is being driven by spot demand rather than leveraged speculation.
Over $1.8 billion in BTC long positions were liquidated last week, clearing some market froth. Data from CoinGlass shows a significant cluster of short liquidations now sits near the $85,000 level. A crypto trader, exitpump, echoed this setup, noting the bullish CVD divergence.
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