Bitcoin dips to the "undervalued edge," ETF outflows for consecutive months hint at a rebound, with $100,000 still in sight

February 14 News, Bitcoin (BTC) has fallen from its high of approximately $126,000 to around $68,000. Despite the significant short-term decline, on-chain valuation signals indicate that this sell-off may be creating conditions for medium- to long-term recovery. Data from CryptoQuant shows that the Bitcoin market value to realized value ratio (MVRV) has dropped to about 1.1, approaching the "undervalued zone" in history. Historically, after reaching this area multiple times, BTC has experienced phased rebounds and initiated new upward trends.

It is important to note that entering the undervalued zone does not immediately mean a bottom has been reached. Historical experience shows that prices may oscillate within this range, forming a phase of re-distribution of holdings. Only when selling pressure gradually diminishes and demand recovers will the market confirm a trend reversal. If macroeconomic conditions stabilize and risk appetite improves, Bitcoin still has the opportunity to challenge the $100,000 level again.

The main factor driving further valuation decline is sustained selling. Institutional funds remain the primary pressure source; US spot Bitcoin ETFs have recorded net outflows for four consecutive weeks, and monthly capital flows have weakened for four months in a row. In just the past two trading days, outflows totaled approximately $687 million, indicating some funds are taking profits or cutting losses and exiting the market.

Spot demand has also decreased. Data from CoinGlass shows that on February 12, the net market buy volume plummeted from $1.02 billion to about $897.3 million, with sellers dominating in the short term, putting downward pressure on prices.

A key variable is long-term holders. The Bitcoin Dormancy/Cost Distribution (CDD), which tracks their behavior, is currently at 0, indicating no large-scale sell-offs. Meanwhile, the ratio of long-term to short-term holders is declining, suggesting that current selling pressure is mainly from short-term traders rather than core holdings.

If long-term holders continue to remain stable, and short-term selling gradually diminishes, Bitcoin’s "undervalued" state could become the starting point for the next rally, laying the foundation for market confidence to rebuild.