Bitcoin remains below the model’s fair-value level but above its lower regression trend line, according to the analyst’s monthly update. The analyst expects it to spend the rest of the year near these lower levels, with greater downside risk than a return to fair value.
Why it matters
The model describes Bitcoin as deeply undervalued relative to historical readings, but the analyst cautions that undervaluation does not prevent further declines. The current gap is unusual: comparable levels have not been seen since Bitcoin’s early years around 2010. The analyst also points to a less euphoric cycle, with Bitcoin struggling to hold above fair value in 2024 and 2025.
That pattern contrasts with cycles in which a strong rally draws broader market participation and pushes Bitcoin durably above fair value. The analyst compares the current cycle with 2019, when a less enthusiastic market limited that kind of sustained move.
Market impact
The analyst links Bitcoin’s recent weakness to broader market conditions and seasonality, particularly the prospect of a Q4 decline in the Nasdaq during a midterm year. The Nasdaq has already fallen 10%, within the analyst’s forecast range of 10% to 20%. A further drop could weigh on Bitcoin too.
Bitcoin was already trending lower before a crypto exchange hack, the analyst said. Two weekly closes below the prior range high were followed by a quick decline toward the 21-week EMA, the bull-market support band. Bitcoin had recently traded at $87,000 before falling back. The analyst acknowledges some resilience after the hack, but says it does not rule out continued downside. Longer term, the analyst sees the crypto market reaching $10 trillion, plus or minus a few trillion.
Frequently asked questions
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Why does the analyst expect Bitcoin to remain under pressure?
The analyst points to Bitcoin’s position below model fair value, seasonal weakness and the risk of further Nasdaq losses in Q4.
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What does the Bitcoin valuation model show?
Bitcoin is below the model’s fair-value level but remains above its lower regression trend line. The analyst says similar readings have not appeared since around 2010.
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How could a further Nasdaq decline affect Bitcoin?
The analyst says broader stock-market weakness could weigh on Bitcoin. The Nasdaq has already fallen 10%, within a forecast range of 10% to 20% for Q4.
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What technical pattern does the analyst cite?
The analyst says two weekly closes below the prior range high preceded a quick move toward the 21-week EMA, part of the bull-market support band.
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Does the analyst remain positive about crypto over the long term?
Yes. Despite near-term downside concerns, the analyst sees the crypto market reaching $10 trillion, plus or minus a few trillion.
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