Analysis: Bitcoin MVRV Z-Score has dropped to a multi-year low, indicating that the market has entered the undervalued zone but has not yet completed the bottoming process

July 27th, Crypto Quant analyst Axel Adler Jr posted that the current valuation indicator MVRV Z-Score of Bitcoin has dropped to a multi-year low but has not yet fallen into the negative territory, indicating that the market is in an undervalued state rather than a capitulation phase typical of a market cycle bottom.

The data shows that the BTC MVRV Z-Score is currently around 0.42, much lower than the historical average of 1.7, and has been hovering around zero for 30 consecutive days. Since the end of 2025, this indicator has been on a downward trend, hitting a phase low of around 0.185 on June 30th, but has not entered the negative territory representing large-scale sell-off. Meanwhile, the BTC 7-day Realized P/L indicator has shifted from a loss to a positive value, currently around +$239 million. In the past month, this indicator has mostly been negative, with losses reaching as high as $8.5 billion in June and a weekly loss of around $3 billion in mid-July.

The rebound in realized P/L indicates that selling pressure in the market is easing, but the MVRV Z-Score has not yet experienced a capitulation below zero, indicating a stage closer to "undervaluation + stabilization" rather than confirming the bottom of the cycle. If the MVRV Z-Score subsequently recovers towards the historical average of 1.7 and the Realized P/L remains positive, it could be a signal of a market strengthening. Conversely, if it falls below the June low of 0.185 and enters the negative territory, it may signify a new round of pressure release.