Bitcoin (BTC) has recently dropped below $71,000, negating all gains from the 2024 U.S. presidential election. An analyst claims, however, that Bitcoin is trading at a 41% discount from its long-term fair value, estimating this value to be around $122,762 compared to its current price of approximately $72,000.

Market Stress and Valuation Gap

According to David, a market observer, he suggests that this gap of about $51,000 indicates that Bitcoin is selling for much less than its historical average. His analysis indicates the current price trend is mainly driven by derivatives market activities, such as hedging and liquidation, rather than long-term holders offloading their BTC.

He highlights Bitcoin’s z-score — a metric comparing the current price against the historical trend — estimated at -0.76, which shows the price is significantly lower than its historical norm.

Recent data indicates that in the past month, Bitcoin’s values declined by approximately 25%, pushing its price down 44% from its all-time high recorded in October of last year. Liquidation data from CoinGlass reveals that over 154,000 traders were liquidated within 24 hours, with total calculated losses around $718 million.

In conclusion, current market trends point towards increasing leverage with prices weakening, suggesting that a sharp and sudden price movement may occur in either direction.