Is Bitcoin Seriously Undervalued but Hidden Risks? MVRV Sends Rare Signal, $60,000 Could Be a Critical Test Level

February 28 News: Bitcoin (BTC) experienced intense volatility this week. Since February 24, the price briefly dropped from $66,600 to $62,500, then quickly rebounded to $70,000 on February 25, but the rally was short-lived. As of press time, Bitcoin has fallen back to around $66,000, with a 24-hour decline of approximately 3.25%, putting short-term market sentiment under further pressure.

Some market voices attribute this fluctuation to short-term operations by market-making institutions and macro funds. However, AMBCrypto points out that the current selling pressure is not accidental but part of the ongoing cyclical adjustment that began in mid-October 2025. Although recent selling pressure has eased somewhat, structurally, Bitcoin has not yet entered a full recovery phase.

On the derivatives front, persistent negative funding rates in February indicate that bears still dominate. After price rebounds, rapid declines suggest that bullish confidence remains weak. Meanwhile, on-chain cycle indicators show clear divergence.

Crypto analyst Axel Adler Jr. noted that Bitcoin’s MVRV Z-Score is in an abnormal range. Currently, the indicator stands at -2.28, having dipped to -3.38 on February 5, significantly below the cycle lows of 2018 and 2022. This suggests that Bitcoin’s price is statistically extremely undervalued relative to its on-chain intrinsic value. Analysts believe that the widespread adoption of Bitcoin ETFs has increased the overall cost basis, potentially amplifying deviations in this indicator.

However, sentiment indicators have not bottomed out in tandem. The current NUPL is 0.197, still in the “hope” zone. Historical experience shows that true cycle bottoms often occur after this indicator drops below zero. AMBCrypto previously estimated that if a deeper market purge occurs, the timeframe could still be several months.

Long-term holder data also warrants caution. The LTH MVRV is currently at 1.61, still above the breakeven point, but in a short-term weakening context, a retest of $60,000 is not unlikely. If this level is broken, it could trigger larger passive sell-offs, leading to a real test of market resilience.