Analysis: Bitcoin Enters Historically Undervalued Zone Near 200-Week Moving Average

Bitcoin has entered an undervalued zone previously seen only in the later stages of past bear markets, according to an analysis.

CoinDesk reported on June 11 that on-chain analytics firm Checkonchain sees Bitcoin trading near its 200-week moving average and in the bottom 10% of its historical valuation range.

The 200-week moving average is a key gauge for long-term investors. Checkonchain said Bitcoin is nearing valuation levels that previously appeared only during major bear-market troughs.

Investor sentiment has also deteriorated sharply. The Crypto Fear & Greed Index, which measures volatility, trading volume and social media activity, stands at 9. That is down from 48 a month ago and 11 last week, leaving the market in the "Extreme Fear" zone.

Such a reading may suggest that much of the selling by price-sensitive investors has already been absorbed, Checkonchain said. Still, it noted that market bottoms have historically taken shape only after sharp declines were followed by months of sideways trading.

Bitcoin briefly fell below $60,000 this week before rebounding to around $62,600. Even so, continued outflows from spot exchange-traded funds and macroeconomic uncertainty remain a drag on the market.

The U.S. consumer price index rose 4.2% in May from a year earlier, the highest reading since 2023. At the same time, a jump in oil prices driven by military conflict in the Middle East has reignited inflation concerns.

Yves Renno, head of trading at Wirex, said expectations for clearer crypto-market regulation have also faded somewhat. Attention is now shifting to the Federal Open Market Committee meeting in June.

Depending on the Fed's message, Bitcoin could rebound to $68,000 to $72,000, Renno said. It could also fall back below $60,000 if the market is disappointed.