BTC Drops Under ‘Fair Value’ After Two Years, Past Data Points to Potential 132% Return Over 12 Months

Bitcoin Dips Below Metcalfe Value for First Time in Two Years, Signals Potential Upside

Bitcoin briefly fell below its network value, measured by Metcalfe value modeling, for the first time in nearly two years, according to network economist Timothy Peterson.

“This doesn’t necessarily indicate a market bottom, but it shows that most leverage has been cleared and the ‘bubble’ has deflated,” Peterson said, noting that such dips often occur during the later stages of market resets.

Metcalfe value calculates a network’s fundamental worth based on user activity and growth, historically providing insight during major market cycle shifts.

The decline coincided with bitcoin’s steepest pullback of the current cycle—a roughly 36% drop that pushed prices near $80,000. This unwound speculative excess and removed leverage, setting the stage for a swift recovery. Bitcoin has since climbed back above $90,000 as buyers stepped in and network conditions stabilized.

During the 2022 bear market, bitcoin traded below Metcalfe value throughout, amid declining activity and weak sentiment. Since early 2023, the price had consistently stayed above the benchmark, supported by increased participation and renewed capital inflows. The recent correction marked the first meaningful break of this trend.

Historically, trading below Metcalfe value has preceded strong gains. Twelve-month performance under these conditions has been positive 96% of the time, with an average return of 132%, compared to 75% and 68% for other periods, according to Peterson.

Adding to the bullish outlook, long-term holder (LTH) supply has grown by approximately 50,000 BTC in the past 10 days. LTHs—investors holding bitcoin for at least 155 days—have been a major source of selling pressure over the past year. As coins move from short-term speculative holders into LTH wallets, net accumulation rises, reducing sell-side pressure and providing a potential tailwind for bitcoin’s price.