Bitcoin Slides to Record Undervaluation as ETF Outflows Accelerate: Bitwise Insight
Monday, 2 Feb 2026 – 09:15 GMT
Bitcoin (BTC) breached a new year‑to‑date trough on Monday, dipping to roughly $74,555. The move represents a ~40 % decline from the all‑time high reached in late 2023 and coincided with the largest weekly net outflow ever recorded from global Bitcoin exchange‑traded products (ETPs).
Market backdrop
- ETF pressure: The week ending 31 Jan saw $1.35 billion withdrawn from Bitcoin‑linked ETPs, with the United States spot Bitcoin ETFs alone accounting for $1.49 billion of that total. The Grayscale Bitcoin Trust and iShares Bitcoin Trust were the principal contributors, shedding $119 million and $947 million respectively.
- Sentiment metrics: Bitwise’s Weekly Crypto Market Compass flagged a plunge in its Cryptoasset Sentiment Index to levels last observed during the October 2023 liquidation episode, leaving only two of fifteen tracked indicators above short‑term trend lines.
- Valuation indicator: The two‑year rolling Market‑Value‑to‑Realized‑Value (MVRV) z‑score fell to its lowest point on record, a signal traditionally interpreted as a “fire‑sale” condition for Bitcoin.
Technical perspective
The daily Relative Strength Index (RSI) slipped into the 20‑25 band, a zone that historically preceded modest rebounds of around 10 % in every occurrence since August 2023 (June 2024 being the sole outlier). Spot‑market data on Binance and Coinbase show a positive cumulative volume delta (CVD), indicating net aggressive buying as the price nudged back toward the $79,300 level.
Open interest remained flat while aggregated funding rates turned negative, suggesting that the recent activity is driven more by spot demand than by leveraged long positions. This reduces the immediate risk of cascade liquidations. Nevertheless, the market recorded $1.8 billion in long liquidations last week, and over $3 billion of short positions sit at risk of being forced out should BTC breach the $85,000 threshold.
Analyst commentary
Bitwise’s research team describes the current MVRV reading as “the deepest undervaluation metric in the dataset’s history,” implying that the market may be pricing in a higher probability of a short‑term correction. Traders on X (formerly Twitter) highlighted a bullish divergence in spot CVD across major exchanges, reinforcing the view that buying pressure could resume.
Potential short‑term outlook
If Bitcoin can hold above the $74,500 support identified on Monday, the confluence of a low RSI, positive CVD, and ample short‑side liquidity could fuel a modest rally. Conversely, continued outflows from ETFs and a failure to attract new capital could sustain the defensive posture, keeping price pressure on the downside.
Key Takeaways
- Price: BTC fell to ~$74,555, a 40 % drop from its peak, marking the lowest level of 2026.
- ETF outflows: Global Bitcoin ETPs experienced a record $1.35 billion net outflow, led by US spot ETFs ($1.49 billion).
- Valuation: The 2‑year rolling MVRV z‑score hit an all‑time low, signalling extreme undervaluation.
- Sentiment: Bitwise’s Cryptoasset Sentiment Index fell to levels only seen during the October 2023 crash.
- Technical signal: Daily RSI is in the 20‑25 range, historically a rebound trigger; spot CVD has turned positive.
- Liquidity: $1.8 billion in long liquidations were recorded last week; >$3 billion of short positions sit near $85,000, creating a potential liquidity catalyst.
The information presented is for news reporting purposes only and does not constitute investment advice. Readers are encouraged to perform their own due diligence before making any financial decisions.
Source: https://cointelegraph.com/news/bitcoin-hits-fire-sale-value-as-capital-flows-capitulate-bitwise?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
