TL;DR:
- Bitcoin’s BCMI dropped to the 0.2–0.3 range, a historical undervaluation zone that in the past preceded long-term recoveries.
- The index combines MVRV, NUPL, SOPR and Fear & Greed, and its current values replicate levels not seen since early 2023.
- The 90-day moving average remains in decline, so CryptoQuant warns to wait for stabilization before confirming the cycle bottom.
The BCMI (Bitcoin Combined Market Index) has just entered a zone that historically has marked inflection points for the price of Bitcoin. According to a report by CryptoQuant, the index plunged to the 0.2 to 0.3 range, a threshold that in previous cycles coincided with periods of deep undervaluation. Bitcoin is currently trading above $77,000, driven in part by expectations of a deal between the United States and Iran, and has posted a 3.5% gain in the past few hours.
What Does the BCMI Measure?
The BCMI weights four indicators: MVRV at 30%, NUPL at 25%, SOPR and the Fear & Greed index. The confluence of these data points confirms that both market valuation and investor sentiment retreated to levels not recorded since early 2023, which according to CryptoQuant analyst known as Woominkyu defines a “value accumulation” phase. However, the analyst warns that this signal does not imply an immediate V-shaped recovery, and recommends waiting for the 90-day simple moving average to stop declining before confirming the exhaustion of selling pressure.
Liquidations and Liquidity Clusters
Analyst Ali Martinez observed that the majority of Bitcoin traders are already positioning their bets to the upside. The latest upward move liquidated around $80 million in short positions, which accelerated the long bias across the market. Martinez identified the levels of $70,000, $65,000 and $57,000 as the largest clusters of accumulated long positions, noting that they could act as liquidity magnets and force a flush of late leverage before the next recovery.
Not all analyses have reached the same diagnosis regarding the BCMI and the broader market. Davinci Jeremie, recognized as one of the earliest advocates of BTC, warned that the market may not have yet reached the cycle bottom. He drew a parallel between the recent drop below $60,000 and the June 2022 correction, and suggested that an additional capitulation event, comparable to the collapse of FTX that pushed Bitcoin below $16,000, cannot be ruled out before the price finds its definitive minimum level.
