Undervalued or Trapped? BTC Amid Macro Liquidity & Bear Patterns

• Bitcoin trades near key support as macro liquidity conflicts with bearish technical patterns.
• Bearish charts suggest a drop to $75K–$60K, while on-chain data hint at a recovery.
• Investors split on 2026 outlook, weighing risk from charts against broader economic tailwinds.

Bitcoin is trading near important support levels, with positive macro factors conflicting with bearish chart signals. This has split investors on whether Bitcoin is undervalued now or could fall further into 2026.

Crypto YouTuber Lark Davis highlighted this uncertainty in recent analysis, noting the tension between improving macro conditions and still-weak technical patterns in Bitcoin’s price.

Bitcoin Price Stalls After Record High

Indeed, Bitcoin’s momentum has weakened since reaching a record high in October. Prices have lagged behind gains in U.S. stocks and precious metals, and the pullback has dampened market sentiment, keeping risk appetite low across crypto.

According to analyst Davis, selling pressure increased in November due to stress in interbank funding markets, profit-taking after Bitcoin crossed $100,000, and short-term holders selling at a loss. Concerns about leveraged traders also added to volatility.

Market sentiment remains cautious. The fear and greed index has stayed below 30 since early November, signaling ongoing risk aversion.

Cost-basis data show clusters of Bitcoin purchases between $75,000 and $81,000. ETF inflows suggest an average entry price near $83,000 for some institutional buyers. These levels are close to areas that have historically provided support, but they haven’t yet sparked a strong rebound.

At the time of writing, Bitcoin is trading at $88,873, up 0.9% in the past day. Monthly losses have narrowed to 0.9%, and Bitcoin is still up 5.6% over the past month despite recent volatility.

Macro Liquidity Turns More Supportive

Although Bitcoin’s price has been relatively flat, broader economic conditions are becoming more supportive. Several major central banks have increased liquidity by expanding their balance sheets. In the U.S., the Federal Reserve has cut interest rates multiple times and restarted monthly Treasury bill purchases of about $40 billion.

Some large financial institutions estimate that total Fed purchases could reach roughly $500 billion by 2026. These moves usually make financial conditions easier and tend to support risk assets, including cryptocurrencies.

The analysis also notes that Bitcoin’s price has drifted away from global money supply trends. Historically, this gap tends to close over time, often through rising asset prices.

Additionally, proposed fiscal policies could inject more liquidity into the economy. Rebate programs tied to tariff revenue would put money back into households, increasing cash flow even if consumer spending stays uneven.

Manufacturing Weakness Clouds the Outlook

Despite easier liquidity, Davis mentioned that economic data highlight ongoing challenges. U.S. manufacturing has been contracting for much of 2025. The ISM Manufacturing Index fell to 48.2 in November, marking nine straight months below 50, which signals contraction.

New orders and employment also declined, pointing to weak near-term growth. Davis noted that manufacturing often leads broader economic trends, and a move back above 50 could improve market sentiment.

On the positive side, long-term investment in artificial intelligence is growing. Spending on data centers topped $400 billion in 2025 and is expected to reach about $600 billion in 2026.

These projects involve major construction, energy, and manufacturing work, which could help boost economic growth if activity picks up.

Bearish Chart Patterns Still in Play

Technical analysis presents a more cautious picture. Bitcoin is still trading below its 50-week moving average, near $100,000, which the analyst sees as a key level separating recovery from further weakness.

Davis pointed to two bearish patterns on the chart: a rising wedge and a larger bear flag. These patterns usually break lower about 60% of the time, with a 40% chance they fail.

If the rising wedge plays out, Bitcoin could drop toward $75,000 in the short term. If the bear flag confirms, it suggests a deeper decline into the low $60,000 range, possibly extending into early 2026, similar to past market cycles.

A clear weekly close above the 50-week moving average would cancel both bearish patterns. Until then, moves toward $100,000 may face selling pressure, as traders are likely to view rallies as temporary rather than a true trend change.

On-Chain Data Suggests No Market Excess

On-chain indicators show a different picture. Metrics like the MVRV-Z score suggest Bitcoin isn’t overvalued, and scarcity-based models indicate prices haven’t reached levels typical of market peaks.

Supporters of this view argue that current prices reflect caution, not structural weakness. The lack of extreme speculation or classic on-chain top signals suggests the market could still recover if macro conditions improve.

Bitcoin’s short-term direction will depend on which forces win out. A drop below key support would reinforce bear-market fears, while a sustained move above $100,000 could signal a recovery driven by broader economic conditions.

Related: Why’s the Crypto Market Up Today as Bitcoin Attempts $90K Once More