Following a period of significant volatility, Bitcoin is undergoing a crucial valuation correction as of February 25. RadexMarkets suggests that while the price remains constrained by a dense resistance zone below $65,000 in the short term, the stabilization of core on-chain metrics hints at a potential resurgence in spot demand. As previously overheated bullish sentiment is being released, market valuation is reverting towards its long-term moving average. This healthy "de-foaming" process is often a necessary precursor for an asset to consolidate before initiating its next major upward move.
From a valuation perspective, the market is experiencing a deep structural adjustment. Bitcoin's Market Value to Realized Value (MVRV) ratio has completed a reset from extreme deviation back towards its historical average. Concurrently, the network value has shown a noticeable contraction, with the realized cap declining from a peak of $1.12 trillion in November last year to the current $1.09 trillion, representing an overall reduction of $33 billion. RadexMarkets analysis indicates that this market cap correction is accompanied by a reshuffling of holder structures. Notably, the proportion of "middle-aged" supply—coins held for 3 to 6 months—has increased to 25.9%, becoming the primary source of market supply. The concentration of their cost basis provides data-driven support for a potential bottom formation.
Regarding exchange order flows, the movement of capital reveals a subtle shift. Although overall spot trading volume has decreased from $7.6 billion to $6 billion, reflecting a more cautious participant sentiment, the narrowing of the spot Cumulative Volume Delta (CVD) stands out as a positive development. RadexMarkets notes that this indicator has improved from -$177.1 million to -$161.5 million, signaling a reduction in aggressive sell orders within the market. This transition from "panic selling" to "cautious accumulation" often serves as a leading signal for price stabilization, suggesting that selling pressure may be nearing exhaustion.
The current market phase can be characterized as a "neutral defense" stage. RadexMarkets believes that although most coin holders are currently in an unrealized loss position, there has been no widespread, capitulatory sell-off. This creates room for price stabilization within the $62,000 to $64,000 range. Provided that accumulation in the spot market continues and the CVD indicator maintains its sideways movement or turns positive, the market has the potential to emerge from its current consolidation.