Bitcoin’s price has dipped into a zone typically seen as undervalued, but it hasn’t sparked the expected buying surge or bullish momentum yet. Despite this, Bitcoin briefly jumped above $65,000 as tensions between the US and Iran eased for a second day, boosting altcoins like Ethereum by over 4% to surpass $1,960, while Solana and XRP posted modest gains of 1-2%. Meanwhile, global oil prices dropped about 5%.

All eyes now turn to Wednesday’s Federal Reserve announcement on interest rates, which could set the tone for Bitcoin and other cryptocurrencies in the near term. The market remains cautious, awaiting clearer signals to confirm whether the recent rally can sustain.

Undervaluation Doesn’t Guarantee a Bullish Turn

CryptoQuant analyst Axel Adler highlighted Bitcoin’s MVRV Z-Score a key metric for valuing the asset has dropped to a multi-year low but still hovers above the negative threshold. The current reading of 0.42 sits well below the long-term average of 1.7, signaling Bitcoin is trading beneath its estimated worth. However, the drastic sell-offs seen in previous bear market bottoms, marked by negative MVRV Z-Scores, have yet to materialize.

Adler pointed out that Bitcoin’s seven-day realized profit and loss recently shifted from negative to positive, indicating waning on-chain selling pressure. Yet, this change alone isn’t enough to suggest the start of a new bull market cycle. He described the current stage as an "undervalued stabilization phase" rather than a definitive market bottom.

For a true reversal and sustained uptrend, several factors need to align: increasing demand on-chain, a rise in profitability, and aggressive accumulation by long-term holders. Simply trading below value or reduced selling pressure doesn’t suffice.

Bitcoin’s path remains uncertain this week amid geopolitical easing and looming Fed decisions. Some volatility is expected before a clear direction appears. Meanwhile, altcoins continue to follow Bitcoin’s moves cautiously.

This material is for informational purposes only and does not constitute financial advice.