[Analysis] "Bitcoin short-term liquidity gauge declines…potentially entering an undervalued zone"

An analysis suggests Bitcoin (BTC) may have entered an undervalued zone.

Crypto Dan, a CryptoQuant contributor, said on the 11th (local time) via CryptoQuant that “one of the indicators frequently used to assess Bitcoin from a short-term liquidity perspective is the ‘1-week to 1-month holding ratio’,” adding that “this indicator is currently showing a pronounced downtrend.” Crypto Dan noted that “it is still somewhat elevated to conclude it is an absolute bottom,” but said it “suggests it may have gradually moved into a range closer to undervaluation compared with past cycles.”

He also cited historical data. Crypto Dan said, “In the past, periods when this ratio fell sharply were mostly formed in ranges similar to the bottoms of previous bear-market cycles,” and analyzed that “in other words, phases in which the share of short-term holdings declines often coincided with periods when market overheating subsides and the long-term holding structure strengthens.”

Crypto Dan also pointed out that “market sentiment remains fragile.” He suggested that “investors ultimately reach a point where they must compromise with the market to a certain degree,” and that “rather than trying to nail the exact bottom, it is a more reasonable strategy to diversify risk across price ranges where both value and probabilities are favorable to prepare for the next upswing cycle.”