Bitcoin price is still undervalued, MVRV indicator shows

Bitcoin price has been a strong performer this year, rising 120% and outperforming popular assets like the Nasdaq 100 and S&P 500 indexes.

Bitcoin (BTC) fell from an all-time high of $108,427 to $97,000 after the Federal Reserve signaled just two rate cuts in 2025.

MVRV score shows Bitcoin price is still cheap

The recent Bitcoin pullback has impacted investors, as spot ETF flows show.

These funds experienced net outflows of $276 million on Friday, a day after losing $680 million in assets, according to SoSoValue. This was a sign that some investors believed Bitcoin may have reached its peak.

Still, the Realized to Market indicator shows that the Bitcoin price is still cheap even after hitting a record high last week.

According to CoinGlass, the MVRV-Z score dropped to 2.84 from last week’s high of 3.3. Historically, an MVRV-Z score below 3.7 is a sign that an asset is undervalued.

Bitcoin MVRV indicator | Source: Coinglass

The MVRV-Z score is an important indicator that looks at the market cap and relative value of a coin. It is calculated by subtracting the realized market value from the circulating market value and then dividing the figure by the standard deviation.

Bitcoin had an MVRV of 3.03 in the last major correction in March this year and 7 MVRV points in the previous major correction in January 2021.

Therefore, this score is a sign that the cryptocurrency could recover strongly in the next few weeks. As we wrote in a recent BTC forecast, the cup and handle pattern points to a rise to $122,000 in this bullish cycle.

BTC faces other strong fundamentals

The coin also has some strong fundamentals. As shown below, the number of Bitcoins in circulation has fallen to 2.24 million, the lowest in recent years. There were over 2.72 million coins on exchanges in September this year.

This shows that more investors are purchasing Bitcoin and storing it in their own custodial wallets. Some of these investors are investors who have accumulated ETFs, which currently hold over $109 billion in assets. Companies like Marathon Digital and MicroStrategy also continued to accumulate Bitcoin this year.

MicroStrategy currently holds over 439,000 coins.

Bitcoin balances on exchanges | Source: CoinGlass

Another potential catalyst for Bitcoin is the stablecoin market cap rising to almost $210 billion from $122 billion a year ago.

An increase in stablecoin value is generally a positive indicator and underlines that more investors are showing interest in cryptocurrencies.

Meanwhile, Bitcoin’s annual inflation rate continues to decline, rising from a 2015 high of almost 12% to 1.12%. This inflation rate has dropped due to halving events and increased mining difficulty rate.

Bitcoin annual inflation rate | Source: IntoTheBlock

Therefore, while further Bitcoin pullbacks are possible, there are signs that the positive MVRV score and strong fundamentals will help push Bitcoin higher in the long term.