"Severely Undervalued" but trapped in a sideways market, the market structural changes behind Bitcoin's lack of rebound

Bitcoin is experiencing an awkward situation where it is severely undervalued but unable to rebound. After intense volatility in October and November 2025, this correction not only has a significant scale but also profoundly reflects the massive changes in the structure of crypto asset market participants. Currently, Bitcoin is fluctuating within the $85,000 to $90,000 range, with the latest price around $89.99K, up +1.04%. However, such a slight increase cannot hide the market’s lack of direction.

Jim Ferraioli, Head of Cryptocurrency Research and Strategy at Charles Schwab’s Center for Financial Research, pointed out that while 2026 still has the potential to be an active year, from a market perspective, it might be relatively “boring.” He further explained that this wave of correction is essentially a digestion and consolidation period for the market—recalling the lows of November 2022, Bitcoin surged to a historic high of $126,000 in October 2024, an 8-fold increase in just three years. The current sideways movement is the market’s necessary process to digest this massive rally.

The ETF Spotlight: Why Are Traditional Institutional Funds Still Watching?

The market structure has quietly changed. In the months following the all-time high, on-chain activity significantly cooled down, replaced by ETF capital flows becoming the dominant force influencing prices.

Ferraioli noted that the driving factors of the current market have completely changed: “Low trading fees, profit-taking by long-term holders, and Bitcoin balances on exchanges dropping to lows mean that the trend is now entirely driven by ETF capital flows.” Gerry O’Shea, Head of Global Market Insights at Hashdex, agreed, stating that although US monetary policy shifts or progress on crypto legislation in Congress could bring positive signals, Bitcoin remains in a range-bound pattern for now.

This structural shift, while making Bitcoin investment more accessible, may also distort short-term market signals. More critically, the true institutional whales have not yet fully entered. Once relevant legislation is enacted, it could push Bitcoin prices higher. The current sideways trend, to some extent, reflects the market waiting for that moment.

The Serious Supply-Demand Imbalance: Why Is the Market Still Waiting?

Will Reeves, CEO of fintech company Fold, bluntly attributes the current situation to a “supply and demand cycle” issue: Bitcoin is currently severely undervalued, and the market is waiting for selling pressure to exhaust itself and for a new wave of buying to come in.

This severe imbalance in supply and demand manifests on multiple levels. The decline in Bitcoin balances on exchanges often signals an accumulation phase, but the current accumulation lacks support from new buying interest—institutions are cautious, on-chain activity is subdued, and mid-to-long-term holders have already reduced their positions. The new growth narrative is not yet clear, and the previous rally consensus has been thoroughly shattered.

Hyunsu Jung, CEO of Hyperion DeFi, pointed out that as the ETF capital influx at the beginning of the year recedes, digital assets appear dull compared to other asset classes. Without a new wave of institutional capital or a macroeconomic shift (such as rate cuts), Bitcoin will likely remain in a “range-bound consolidation” phase. This is precisely the market waiting for new drivers to emerge.

From a Cycle Perspective: Is Sideways Movement Inevitable or a Sign of an Impending Winter?

There are still differing opinions on whether the market has entered a new “crypto winter.”

Ferraioli stated that, according to traditional definitions, Bitcoin is undoubtedly in a bear market. However, considering its high volatility, a 30% correction is not uncommon—historically, similar adjustments have repeatedly occurred in Bitcoin’s lifecycle. The true definition of winter should be long-term stagnation in innovation and declining user adoption, not merely price corrections.

Although Bitcoin has some correlation with US stocks, it still has its own unique drivers: shrinking money supply, deflationary supply growth mechanisms (halving cycles), and most importantly, adoption breakthroughs. The current sideways movement is actually testing a critical question—whether the market can break through the adoption bottleneck. This will determine whether Bitcoin enters a real winter or simply completes a healthy consolidation process of a mature asset.

In this frustrating period of severe undervaluation and inability to rebound, the true opportunity may be hidden in the waiting.