Bitcoin's Undervaluation and the Case for a $96K Rebound in Late 2025

Bitcoin's price action in late 2025 has sparked intense debate among investors and analysts. While the asset has faced significant volatility, on-chain metrics and technical patterns suggest a compelling case for a rebound toward $96,000. This analysis explores how value investing principles, combined with data from the Puell Multiple and MVRV Z-Score, indicate Bitcoin is in a "discount zone," while also weighing macro risks such as dead cat bounces and shifting monetary policy.

On-Chain Metrics Signal Undervaluation

The Puell Multiple, a critical indicator of miner profitability, has fallen below 1 as of late 2025, signaling that miners are earning less than their annual average according to on-chain data. Historically, this "discount zone" has preceded major price recoveries, as seen in late 2023 when a similar drop was followed by an 80% rally. The current Puell Multiple of 0.86 suggests miners are under financial pressure, increasing the likelihood of capitulation and subsequent buying opportunities.

Complementing this, the MVRV Z-Score, which compares Bitcoin's market value to its realized value, has dropped to 1.13, its lowest level in two years. This metric normalizes deviations between market value and realized value, with readings below 1 historically associated with extreme capitulation. While some sources report a slightly higher range of 2.4–2.6, the consensus across on-chain data underscores Bitcoin's undervaluation relative to its long-term fair value.

Technical Setup: The Bull Flag Pattern

From a technical perspective, Bitcoin has formed a bull flag pattern, a continuation pattern often seen during consolidation phases before upward breakouts. The pattern is characterized by a sharp price rise followed by a period of consolidation within a descending channel. As of late 2025, Bitcoin has been trading within a defined flag pattern, with key resistance levels at $98,000 and $100,000. A weekly close above $98,000 could invalidate the bearish narrative and confirm the pattern's bullish potential.

Historical precedents, such as the 2020–2021 bull run, show that bull flag formations often precede significant price surges. If Bitcoin breaks above the flag's upper boundary, it could target $135,000–$160,000, aligning with the MVRV Z-Score's historical correlation with major tops.

Macro Risks and Dead Cat Bounce Concerns

Despite the bullish signals, risks remain. A dead cat bounce-a temporary recovery within a larger downtrend-cannot be ruled out. Analysts warn that Bitcoin's current rebound may lack volume and conviction to sustain a long-term uptrend. Key resistance levels, such as $95,000–$100,000, must be decisively breached to confirm a sustained recovery.

Macro factors also weigh on the market. The Federal Reserve's shifting rate expectations have created uncertainty, with the probability of a December 2025 rate cut dropping to 22% by mid-November. Tightening liquidity expectations have disproportionately impacted risk assets like Bitcoin, which are sensitive to changes in global monetary policy. Additionally, rising Japanese 10-year yields have exacerbated pressure on cryptocurrencies.

Institutional Adoption and ETF Flows as Tailwinds

A counterargument to the bearish narrative is the potential for institutional adoption and ETF inflows to drive sustained bullish momentum. Improved macro conditions support Bitcoin's price recovery. Furthermore, declining RSI readings and oversold conditions on altcoins suggest market sentiment may be nearing a bottoming phase.

Conclusion: A Tactical Entry Opportunity

Bitcoin's current on-chain metrics and technical setup present a compelling case for a $96K rebound in late 2025. The Puell Multiple and MVRV Z-Score both indicate undervaluation, while the bull flag pattern suggests a potential breakout. However, investors must remain cautious of macro risks, including dead cat bounces and Fed policy shifts. For value investors, this represents a tactical entry point, provided they implement strict risk management and monitor key resistance levels.

As the market awaits pivotal macroeconomic data and institutional developments, Bitcoin's trajectory will likely hinge on whether it can reclaim $98,000 and confirm a sustained bullish trend.