- According to Grayscale’s latest research report, cross-chain valuation metrics show that BTC is trading below its long-term average of $60,000.
- This indicator suggests that Bitcoin is cheap, but it is not As much as previous cyclical lows During previous crashes like the FTX drop in 2022.
- The company reported ongoing regulatory developments around the CLARITY Act and the stability of leveraged BTC holders.
On June 9, Grayscale shared a report regarding Bitcoin’s current price action amid bearish sentiment in the overall cryptocurrency market.
This bear market is less deep than previous cycles, grayscale research says
According to research By Grayscale On-chain data indicates that Bitcoin is currently trading below its long-term average, and appears to be undervalued. However, the company stated that the price Bitcoin Not as low as it was during the last bear market cycle during the FTX crash in 2022.
“On-chain metrics suggest that Bitcoin is undervalued, but not as cheap as previous cycle lows. Whether we have found a market bottom will depend on upcoming catalysts and the CLARITY Act, but we believe this is a buying opportunity for investors with longer-term horizons,” the research stated.
To conduct this research, Grayscale used an on-chain composite rating index. This is an average of several common metrics. According to this indicator, Bitcoin is selling at a discount compared to its previous standards. However, the company explained that the current bear market has been moderate compared to previous cycles.
“We believe this bear market may be less deep than in the past, given a more muted prior bull market, as well as improvements in market structure from ETP availability, wealth platform diffusion, and other types of institutional adoption,” the research said.
In the report, investors are currently focusing on regulatory developments around the digital asset sector and how leveraged BTC holders will perform in the short term. Grayscale mentioned two factors behind BTC’s price movement on the short-term chart.
The first is the progress of the Digital Asset Market Clarity (CLARITY) Act in the Senate. In May, the Senate Banking Committee approved the CLARITY Act after a long delay in the process.
Senator Cynthia Lummis stated in the post on X: “I’ve spent years building toward this moment. The Clarity Act is the most important financial legislation of this generation, and we will get it done.
The main factor for investors to keep an eye on is whether holders of leveraged Bitcoin will be able to stabilize their balance sheet.
“We believe that current price levels provide an opportunity for investors with long-term investment horizons to consider dollar cost averaging for their Bitcoin purchases. “More tactical traders may want to consider waiting for CLARITY,” said one researcher at Grayscale.
Bitcoin is struggling to recover amid major ETF outflows
according to CoinMarketCapBTC is currently trading at around $61,901 after seeing a 21% decline in the last 30 days.
This turmoil in the financial world created intense selling pressure in the cryptocurrency market as investors began withdrawing their funds. Exchange-traded funds (ETFs) such as Bitcoin Black Rock The ETFs experienced the longest string of outflows in their history, lasting 13 days. In total, investors withdrew investments worth approximately $4.4 billion.
Even BTC ETFs are still seeing significant outflows. On June 5, Bitcoin ETFs recorded an outflow of about $325.7 million, according to Father’s side. On June 8, it saw an outflow of about $91.4 million. This demonstrates the depletion of institutional investors’ confidence in the cryptocurrency market during periods of high volatility.
