Is Bitcoin Undervalued? Crypto Sentiment Index Flashes “Massive Contrarian Buy Signal”
Bitcoin (BTC) has experienced one of its biggest price drops recently, falling from $96,131 on February 24 to $85,418 today’s local bottom. The decline triggered more than $1.5 billion in liquidation, most from long positions.
Is it time to buy Bitcoin?
Recent price action shows how cryptocurrency markets, driven by trade tariffs proposed by U.S. President Donald Trump and the hawkish stance of the U.S. Federal Reserve, react to the desolate macroeconomic situation.
The current cryptocurrency market capitalization has now dropped below $3 trillion for the first time since November 2024, marking a growing put option for risky boarding assets. Major altcoins like Ethereum (ETH) have fallen by more than 10% over the past week.
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However, despite yesterday’s economic downturn, overall sentiment towards the cryptocurrency market appears to be improving. In X postalAndre Dragosch, head of European research at Bitwise, shows that the worst of BTC may have ended.
Dragosch shares the following CryptoAsset emotional index, which is flashing with a strong counter-trend buying signal to enable flagship cryptocurrencies. The analyst added:
A broad bearish relationship between streams, chains and derivatives data means that downside risks are quite limited. At these prices, risk rewards seem to be favorable.
To further illustrate the bearish levels surrounding risky assets, Dragosch stressed that the U.S. spot Bitcoin Exchange Trading Fund (ETF) recorded their largest daily net outflow yesterday. data This evaluation is supported from Sosovalue.
Additionally, the crypto fear and greed index remains in bearish territory. Dragosch noted that emotional levels “have been as bearish as the macro capitulation last August.” At the time, BTC’s local bottom was $49,000 and then rallyed to multiple new historical peaks (ATHS).
On a more optimistic viewpoint, on-chain data suggests that crypto whales are exploiting market uncertainty. Long-term holders, according to crypto analyst Ali Martinez accumulation After the recent selloff, nearly 20,400 BTC.
Strategy falls as BTC collapses
In line with the decline in BTC, strategic stock MSTR also suffered losses, down 55% from its peak of $543 in November 2024. At the time of writing, the MSTR transaction is trading at $249, about 29% in the past month.
Despite overall bearish feelings, recently analyze Comparing BTC’s returns to other assets such as gold and stocks shows that although Bitcoin’s cumulative annual growth rate has slowed in recent years, it continues to significantly outperform traditional asset classes.
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However, not all analysts share Dragosch’s optimism. In sharp contrast, the standard has been leased recently warn BTC may face further shortcoming Before returning to the bullish trajectory. At press time, BTC was trading at $87,086, down 1% in the past 24 hours.
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