Bitcoin price looks undervalued, but the market still lacks the deeper cheapness seen at past cycle lows, analysts say.
The price of Bitcoin might look cheap based on on-chain valuation metrics, but the market bottom still depends on U.S. crypto legislation and leveraged holders, Grayscale says.
Zach Pandl, head of research at Grayscale, said in a June 9 research note that Bitcoin’s drop to a new cycle low below $60,000 has pushed the asset below its long-term valuation average.
The firm’s composite onchain valuation indicator, built from three separate measures, suggests Bitcoin is undervalued. But as Pandl argued, BTC▼$61,033.00 isn’t as cheap as it was near previous cycle lows. He wrote:
“Is Bitcoin cheap yet? The answer—according to the signal from a range of onchain valuation indicators—is yes, but not as much as previous cyclical lows (e.g., post FTX-collapse). Whether we have hit bottom this time depends on the regulatory outlook and on how large leveraged BTC holders perform in the short run.”
That leaves the current setup short of a clean capitulation bottom, though Pandl said this bear market may still end up shallower than previous ones because the last bull market was more muted.
He pointed to ETFs and broader institutional adoption as reasons the drawdown may not need to match older cycles.
Read also: Bitcoin Price Prediction Markets Turn Bearish as Traders Eye $55K
Bitcoin Price Depends on CLARITY Act and Leverage
Grayscale said investors should watch two short-term catalysts, starting with progress on the CLARITY Act in the U.S. Senate, which is meant to create clearer rules for crypto.
But Galaxy Digital, a crypto firm owned by Mike Novogratz, has recently downgraded the chances of passing the CLARITY Act to 60% from 75%, arguing that there is little left of the calendar year in the U.S. Senate and some controversies to be sorted out.
The second catalyst is going to be related to leveraged holders of Bitcoin managing their balance sheets amid the recent decline below the $60,000 mark and the possibility of balance sheet distress in the coming period.
As Grayscale argues, the current price level presents a good opportunity for investors to consider dollar-cost averaging in Bitcoin rather than trying to find the perfect entry point.
Read more: Bitcoin Price Prediction 2026: Will BTC Finally Rally to 100k?
