Bitcoin Dips Below $101K: Analysts Believe BTC Is Being Undervalued Based on Fundamentals
Despite Bitcoin's drop to new lows, analysts assert that its fundamentals indicate it is trading at a significant discount.
Bitcoin’s price has sharply declined to $100,800 as of Tuesday, reflecting a weekly drop of over 10%. This decline is in line with the downturn in Nasdaq 100 futures, which saw a 1.67% drop, placing pressure on risk assets.
Historically, when the Nasdaq decreases by more than 1.5% in a day, Bitcoin tends to follow suit, with a 75% probability of a negative return, averaging a 2.4% decline.
Nevertheless, analysts claim that Bitcoin’s current price drop is not entirely justified by market fundamentals. Financial conditions continue to loosen, and stock markets have recently reached record highs. According to Ecoinometrics, “Bitcoin has been underpriced relative to the macro backdrop,” suggesting that this recent dip is driven more by market sentiment than by structural issues.
Current data indicate that while spot Bitcoin ETF inflows have decreased—showing about $1.5 billion in outflows in the past four weeks—investor demand remains robust overall. The first two weeks of the fourth quarter recorded net inflows exceeding $5 billion. Despite this, Bitcoin continues to trade below its 200-day moving average of $108,000 and the short-term holder cost basis of $113,000.
Bitcoin Liquidity Signals Potential Recovery
Monitoring data reveals a Stablecoin Supply Ratio (SSR) that has recently decreased to the 13–14 range. This level typically indicates liquidity turning points, suggesting a rising possibility of recovery in the markets, especially as increasing stablecoin balances denote growing buying power.
With Bitcoin prices currently around $101,800, this low SSR implies that liquidity is potentially building up, setting the stage for either a relief rally or a final bullish phase in the current cycle. That being said, each subsequent SSR rebound has shown signs of decreasing strength, indicating that while a recovery might still occur, the market’s underlying liquidity momentum could be diminishing.
This article is not a recommendation for investment. Make sure to conduct thorough research before making any financial decisions.
