Bitcoin Falls Below $101K: Why Analysts Still Call BTC “Undervalued”

Bitcoin: A Recent Downturn Overview

Chart: https://www.gate.com/trade/BTC_USDT

Recently, the market has witnessed a significant development: Bitcoin’s price has slipped below realistic market levels. Cointelegraph reports that BTC dropped to approximately a more plausible price point. This decline is not rooted in a major deterioration of Bitcoin’s own fundamentals. Market sentiment and broader macroeconomic factors are driving the decline.

Why Analysts Say BTC Is Undervalued

Despite the pullback, many analysts contend that Bitcoin is currently “undervalued.” JPMorgan’s research, for instance, points out that Bitcoin remains undervalued after adjustments for its ratio to gold and for volatility. Another report notes that while Bitcoin’s drop exceeded 10%, its underlying fundamentals—such as stablecoin market liquidity and on-chain accumulation—have not meaningfully worsened. Analysts interpret the price correction as evidence that intrinsic value changes are not fully reflected.

Key Resistance Factors Driving the Decline

Why does Bitcoin’s price keep falling even when it’s believed to be undervalued? The main reasons are:

• Macroeconomic and Equity Market Turbulence: Bitcoin has historically shown a 75% correlation with Nasdaq movements. During this downturn, Nasdaq futures fell more than 1.5%, increasing the likelihood of Bitcoin declining alongside.
• Shifting Capital Flows and Institutional Sentiment: While net inflows into Bitcoin ETFs remain positive, the pace of inflows has slowed recently, with short-term net outflows emerging.
• Technical Pressure and Market Sentiment: Some reports warn that if key moving averages are breached, a deeper correction could follow.

Fundamentals Supporting a Bitcoin Rebound

In contrast, several factors are building up to support a rebound in Bitcoin—or at least to prevent further decline:

• On-chain metrics indicate Bitcoin holders and stablecoin capital inflows are still increasing, suggesting the market hasn’t fully capitulated.
• Relative to traditional safe-haven assets like gold, Bitcoin’s undervaluation after volatility adjustment is highlighted by multiple institutions.
• The market’s technical structure is showing sideways consolidation and price compression, which could set the stage for renewed strength.

Risks and Opportunities for New Investors

For newcomers, the latest Bitcoin downturn presents both risks and opportunities.

Opportunities: If you believe in Bitcoin’s long-term value proposition—scarcity, network effects, and growing institutional adoption—the current pullback may represent an attractive entry point. Analysts’ undervaluation calls offer a logical basis for buying.

Risks: While the price drop is supported by fundamentals, there’s no guarantee of an immediate rebound. Technical analysis suggests that losing key support levels could trigger a deeper correction. Crypto investments remain highly volatile and uncertain, so new investors should be prepared to manage these risks.

Advice for beginners: If you decide to build your position gradually, use a dollar-cost averaging approach to avoid being caught in short-term volatility after a single large purchase. Also, establish stop-losses or monitoring thresholds to limit potential losses.

Summary: Buying Opportunity or Wait and See

In summary, Bitcoin’s current price decline reflects market sentiment and macro volatility, not a breakdown in fundamentals. Analysts believe Bitcoin is likely undervalued now, which presents a reasonable entry window for long-term investors. However, short-term risks persist, and technical indicators and capital flows should be watched closely. For new investors, if you’re ready for long-term holding and comfortable with volatility, now may be a good time to gradually enter the market. If you prefer short-term trades or have lower risk tolerance, it’s wise to wait for a clearer rebound signal before getting involved.