According to BeInCrypto reports, crypto has reached its cheapest valuation relative to long-term trends since 2010, with the total market cap at $2.152 trillion as of July 31. Benjamin Cowen, founder of Into The Cryptoverse and member of BeInCrypto's Markets Intelligence Council, measured the gap against his logarithmic regression trendline, revealing the market is 62.49% undervalued with a fair value of $5.737 trillion. The current market trades at 37.52% of fair value, representing the lowest reading since September 2010 at 32.72%.
Joao Wedson, market analyst and founder of Alphractal, predicts Bitcoin's bull market could take another two months to kick in based on historical cycle patterns. His analysis shows Bitcoin has fallen 25.98% this year, with the downtrend extending and stripping $665 billion from its market capitalization to reach $1.29 trillion. At the time of writing, Bitcoin sits 303 days past its market peak, leaving roughly 79 more days of decline that would land the bottom in October. The last three bear markets averaged 382 days with drawdowns of 85.3%, 83.4%, and 75.7% respectively, making the current cycle pattern consistent with historical patterns.
Despite the bearish outlook, Bitcoin has shown fresh strength, crossing the $65,000 mark in early Wednesday trading. FrankAFetter, a pseudonymous Bitcoin analyst, expects a breakout based on the short-term holder profit/loss ratio, noting that the ratio has failed each time it reaches break-even points at $97,000 and $82,000. He anticipates a breakout because short-term holders now act as "market actors with a long-term holder mindset" and have been buyers from the initial February crash to $60,000. For a sustained rally, Bitcoin would need to clear the $64,000 to $65,000 sell wall and reclaim the $82,000 region.
As reported by BeInCrypto, recent developments including Coldcard hacks and fading retail interest add pressure to the current market conditions. The bond market is starting to revolt as the Fed faces challenges, with Cowen noting that the Fed's not raising rates as expected. The undervaluation signal comes despite these headwinds, with Cowen arguing that because fair value keeps rising over time, the discount could deepen even if prices move sideways. The current bear market represents the only time crypto has been lower than its current valuation since the asset class's launch, making this a historically significant period for crypto market analysis.
