TLDR:
- Grayscale’s composite onchain indicator shows Bitcoin is undervalued but not as cheap as past cycle lows.
- The CLARITY Act in the U.S. Senate is a key catalyst that could unlock fresh institutional Bitcoin inflows.
- Leveraged BTC holders stabilizing their balance sheets is critical to preventing further price declines.
- Grayscale recommends dollar-cost averaging for long-term investors at current Bitcoin price levels.
Bitcoin onchain valuation metrics from Grayscale Research suggest the asset is currently undervalued, following a drop to a new cycle low under $60,000.
Head of Research Zach Pandl released findings indicating that while onchain signals confirm below-average pricing, current readings fall short of the extreme undervaluation seen at prior market bottoms.
Two catalysts, the CLARITY Act and leveraged holder stability, now hold the key to what comes next.
Grayscale’s Composite Indicator Places BTC Below Historical Average
Grayscale Research constructed a composite onchain valuation indicator using a weighted average of three distinct measures.
The output shows Bitcoin’s price sitting well below its long-term historical average. That reading confirms undervaluation, but the depth of that undervaluation does not match levels recorded at previous cycle lows.
The firm points to the post-FTX collapse of 2022 as the clearest comparison point. Onchain metrics at that time reflected far deeper discount levels than what current data shows. The difference, according to Pandl, stems from a more muted bull market preceding this correction.
Structural market changes also factor into this shallower bear phase. Bitcoin ETP availability, wealth platform deployment, and growing institutional adoption have altered market composition. These developments provide a demand floor that earlier cycles lacked entirely.
Grayscale summarized the position on X, stating the research asks: “Is Bitcoin cheap yet?” The firm’s answer, yes but not as cheap as past cycle lows, frames the current moment as a measured opportunity rather than a generational discount.
Two Catalysts Will Determine Whether Bitcoin Has Found Its Bottom
Grayscale Research identifies the CLARITY Act as the most immediate regulatory variable. The bill is working through the U.S. Senate and would establish a defined framework for digital asset classification.
Pandl’s team says it remains optimistic, though prediction markets currently place the outcome at roughly a tossup.
A favorable Senate vote on CLARITY could unlock fresh institutional allocation into Bitcoin. Regulatory certainty of that kind historically reduces risk premiums that institutional allocators apply to the asset class. Delays or failure, on the other hand, could extend the current period of price pressure.
The second catalyst is the performance of large leveraged Bitcoin holders. Forced liquidations from over-leveraged positions have amplified past downturns considerably.
Grayscale’s analysis suggests the market’s near-term direction depends heavily on whether these holders can stabilize without triggering cascading sells.
For long-term investors, Grayscale believes current levels support a dollar-cost averaging approach. More tactical participants may benefit from waiting for CLARITY Act developments before increasing exposure.
Bitcoin trades at $61,244 at press time, reflecting a 3.18% decline over 24 hours and a 7.55% drop across the past seven days.
