Bitcoin is now significantly below the estimated average cost basis of spot ETF holders, which is important. When price drops below the realized cost of a large, influential group of investors, market psychology shifts from confidence to caution. A notable portion of ETF holders are now in unrealized losses.
At the same time, MVRV has fallen below 1, signaling that, on average, ETF-linked capital is underwater.
Why MVRV < 1 Matters
MVRV > 1: Investors hold unrealized profits; selling is discretionary.
MVRV < 1: Investors hold unrealized losses; behavior becomes defensive and emotional.
Being underwater increases the likelihood of:
Selling into rebounds
Weaker conviction during rallies
Fragile upside attempts
This doesn’t mean a collapse is guaranteed, but it does create psychological resistance.
The ~$80K Realized Price Wall
The realized price around ~$80K is now structurally important. Historically, these zones act as:
Support during bull runs
Resistance during corrective phases
If price tries to reclaim this area while ETF investors are still underwater, selling pressure could turn it into overhead resistance rather than support.
Short-Term Outlook
As long as MVRV < 1:
Sentiment remains cautious
Rallies may struggle to gain momentum
Positions remain fragile
Recovery attempts could occur, especially if derivatives become oversold, but lasting structural repair requires ETF holders to move back into profitability.
Medium-Term Inflection Zone
If MVRV stabilizes around 0.8–0.9:
Selling pressure may ease
Volatility could compress
Price may revert toward realized cost
This usually results in a relief rally rather than a full trend reversal.
If MVRV Falls Further
A deeper drop would widen the gap between price and realized price:
ETF-driven selling could accelerate
Defensive behavior intensifies
Downside momentum may extend
Markets often see the sharpest declines when loss realization spikes.
The Bigger Picture
This is about ownership psychology, not just price. When a major investor group shifts from profit to loss, the market enters a transitional phase: absorption could build or selling could continue. Over the long term, Bitcoin typically repairs these gaps through volatility and time. Until the gap narrows or MVRV sustainably rises above 1, structural pressure remains a key factor.
