Bitcoin “Deeply Undervalued” but Bear Market Likely to Persist Without a Clear Catalyst

Despite being widely viewed as fundamentally undervalued, Bitcoin is expected to remain stuck in a bear market phase as analysts see no immediate catalyst for a strong upside move.

After a highly volatile period in October and November 2025, Bitcoin has entered a phase of consolidation, trading within a narrow $85,000–$90,000 range for several consecutive weeks. Market observers say this sideways action could continue well into 2026.

Analysts Expect Range-Bound Bitcoin Price Action

According to Gerry O’Shea, Head of Global Market Insights at Hashdex, potential catalysts do exist — including shifts in U.S. monetary policy or progress on crypto regulation in Congress — but none appear imminent.

“For now, Bitcoin is firmly range-bound,” O’Shea said, adding that while bullish developments are possible, the market lacks the momentum needed to break higher in the short term.

Jim Ferraioli, Director of Crypto Research at Schwab’s Center for Financial Research, shared a similar outlook. While Schwab remains constructive on Bitcoin’s long-term prospects, Ferraioli expects 2026 to be a quieter year for crypto markets.

Market Digesting a Massive Multi-Year Rally

Ferraioli noted that the current slowdown reflects a natural cooling period after an extended bull run.

“From the November 2022 lows to the October 2025 peak near $126,000, Bitcoin delivered nearly an 8x return in three years,” he said. “The market is still absorbing those gains.”

Since that peak, on-chain activity has declined, transaction fees have remained low, and long-term holders have gradually reduced exposure. At the same time, spot Bitcoin ETF flows have become the dominant price driver, replacing organic network usage as the primary market signal.

ETF Flows Now Drive Bitcoin’s Short-Term Direction

The rise of Bitcoin ETFs has increased accessibility for investors but may also be distorting short-term market dynamics.

“Exchange balances hit historic lows, long-term holders were selling, and price action became almost entirely dependent on ETF flows,” Ferraioli explained. “But true institutional capital is still largely absent.”

According to Ferraioli, clearer regulatory frameworks could unlock deeper institutional participation — a development he views as essential for a sustainable next rally.

Bitcoin Narrative Stalls as Institutional Demand Cools

Hyunsu Jung, CEO of Hyperion DeFi, said Bitcoin’s investment narrative has lost urgency, particularly as ETF inflows slowed after an early-2025 surge. Without renewed demand from institutions or a significant macroeconomic shift, Jung expects continued sideways movement.

Will Reeves, CEO of fintech firm Fold, described the situation as a waiting game. “Bitcoin is deeply undervalued,” he said. “But the market needs persistent sellers to fully exhaust before a new wave of buyers can step in.”

Is Bitcoin Still in a Bear Market?

Whether the current phase qualifies as a full-blown crypto winter remains debated. Ferraioli believes Bitcoin meets the classic definition of a bear market, though he emphasized that sharp corrections are normal given the asset’s volatility.

“A 30% drawdown is almost expected for Bitcoin,” he said.

While Bitcoin often shows periods of correlation with equities, Ferraioli stressed that its long-term drivers remain unique — including fixed supply growth, global liquidity conditions, and adoption trends.

“The biggest unknown for 2026 is adoption,” he concluded. “That’s what will ultimately determine Bitcoin’s next major move.”