CVDD Model Signals Bitcoin Is Not Yet Deeply Undervalued: Drawdown Lags Historical Cycles
Bitcoin has been consolidating since late November, struggling to determine a transparent directional bias because the market searches for stability forward of the subsequent volatility wave. After failing to maintain momentum above the October 2025 highs, worth motion has shifted right into a broad vary, reflecting rising uncertainty amongst traders. While some market contributors interpret this pause as a possible base for continuation, others stay cautious, pointing to historic bear market conduct for context.
According to a report by high analyst Axel Adler, the present Bitcoin drawdown from the October peak stays traditionally shallow. The Bitcoin Bear Market Correction Drawdowns chart, which compares drawdown depth throughout cycles since 2011, highlights how totally different this cycle has been to this point. In the continuing 2025+ cycle, the drawdown stands at roughly −27%, with the utmost correction reaching about −33%.
By distinction, earlier bear markets have been way more extreme: the 2011 cycle collapsed by −92%, each the 2013–2015 and 2017–2018 cycles noticed drawdowns close to −82%, and the 2021–2022 bear market bottomed round −75%.
This relative resilience might level to a structural shift in Bitcoin’s market dynamics. The rising presence of spot ETFs and institutional capital could possibly be dampening volatility and decreasing the magnitude of corrections. Still, Adler cautions that the present bear section is comparatively younger. As a end result, it stays too early to conclude that Bitcoin has definitively entered a brand new regime the place deep drawdowns are now not a part of the cycle.
Bitcoin Still Trades Above Long-Term On-Chain Fair Value
Adler additional explains that the Bitcoin Cumulative Value Days Destroyed (CVDD) mannequin gives vital context for evaluating the place the market presently sits inside the broader cycle. CVDD is a long-term on-chain valuation framework derived from “destroyed” coin days, which captures intervals when older, long-held cash are spent. Historically, this conduct has been intently related to main market transitions and macro bottoms.
The CVDD chart plots Bitcoin’s worth towards a number of valuation bands, together with the bottom CVDD degree and its 5x and 10x multiples. At current, Bitcoin is buying and selling close to $91,000, which locations it at roughly 2x above the bottom CVDD, presently estimated at round $46,600. This zone has traditionally aligned with bear market backside formation phases slightly than full capitulation occasions. In previous cycles, deep undervaluation and panic promoting sometimes occurred when the value approached or briefly dipped beneath the bottom CVDD degree.
The indisputable fact that Bitcoin stays properly above this elementary assist means that the market has not but entered a real capitulation regime. Instead, long-term holders seem largely intact, and promoting strain from older cash stays comparatively contained. As Adler notes, the bottom CVDD degree continues to behave as a long-term structural flooring for the asset.
Taken collectively, the shallow drawdown profile and Bitcoin’s place above key CVDD valuation bands point out that the continuing correction is actual however nonetheless in step with an early-stage bear cycle, slightly than a completely developed market backside.
BTC Consolidates As Structure Remains Weak
Bitcoin worth continues to commerce in a good consolidation vary after the sharp sell-off from the October highs, with the chart displaying BTC hovering across the $90,000–$91,000 space. This zone has acted as a short-term equilibrium following the aggressive breakdown from above $100,000, however the broader technical construction stays weak. Price continues to be buying and selling beneath the 100-day and 200-day shifting averages, that are each sloping downward, reinforcing the concept the dominant pattern has shifted from bullish to corrective.
The latest bounce from the December lows close to $86,000 lacked sturdy follow-through, suggesting that demand stays cautious slightly than aggressive. While consumers have managed to defend increased lows within the brief time period, every upside try has been capped close to the descending shifting averages, highlighting persistent overhead provide.
Volume has additionally declined throughout the consolidation section, signaling a scarcity of conviction from each bulls and bears.
From a market construction perspective, Bitcoin seems to be forming a basing sample slightly than initiating a reversal. Holding above the $88,000–$90,000 assist zone is vital to keep away from a deeper retracement towards the mid-$80,000s.
However, a sustained restoration would require a decisive reclaim of the $95,000–$98,000 area, the place key shifting averages converge. The present worth motion is greatest interpreted as consolidation inside a broader corrective section slightly than the beginning of a brand new uptrend.
Featured picture from ChatGPT, chart from TradingView.com
