Bitcoin (BTC) is currently in an undervaluation zone, marked by an interesting trend where sharp sell-offs are followed by strong rebounds. However, despite the potential for recovery, Bitcoin may not break the $90,000 mark this quarter, as several key factors are at play.

Undervaluation Phase: A Signal of Potential Rebound?

Bitcoin is approaching an undervaluation phase, as indicated by its 30-day realized supply metric. This metric measures the total amount of Bitcoin that has remained unspent or inactive in the market for a certain period. A low realized supply indicates that a large portion of Bitcoin is being held by long-term investors or dormant addresses, while high realized supply suggests increased market activity and trading.

Historically, periods of low realized supply have often been followed by significant price movements, either in the form of capitulation-driven corrections or relief rallies. For example, during the COVID-19 market crash and the aftermath of China’s mining ban, Bitcoin’s 30-day realized supply dipped below the key threshold, signaling oversold conditions. Both of these events were followed by sharp rebounds. A similar setup is emerging now, as Bitcoin’s realized supply metric bottoms out, indicating that Bitcoin may be undervalued.

Macroeconomic Conditions and Bitcoin’s Price Movement

Despite these signals, Bitcoin is still facing several headwinds that may prevent it from breaking $90,000 this quarter. The cryptocurrency’s price has recently seen a nearly 11% drop in Q1, and although it has managed to maintain support above the $80,000 mark, the macroeconomic environment remains a significant challenge. Tariff news and the lingering effects of U.S. economic policies under President Trump are likely to dampen retail sentiment and reduce bullish momentum.

Moreover, the lack of retail participation remains a key factor holding Bitcoin back from a significant price increase. Institutional players and long-term holders (LTHs) have been accumulating and holding Bitcoin, as reflected in the “HODL” sentiment. However, without a notable shift in market sentiment from retail investors, it is unlikely that Bitcoin will experience a breakout to $90,000 in the short term.

Low Liquidity: A Sign of Market Maturation

The current low liquidity in the Bitcoin market could be a sign of its maturation. As fewer coins are actively traded, it suggests that more investors, particularly institutions and long-term holders, are adopting a more cautious stance, reducing the frequency of their trades. This reduction in trading activity may help Bitcoin solidify its status as a store of value, similar to gold, over time.

However, this low liquidity also means that Bitcoin’s price could be less responsive to short-term market changes. For a bull run to materialize, new buyers need to step in. The sell-side pressure from weaker hands must be absorbed, and the market needs a shift in sentiment, particularly from retail investors, to establish a solid market bottom and pave the way for a potential relief rally.

Conclusion

While Bitcoin’s current undervaluation signals a potential buying opportunity, the broader market conditions, including macroeconomic uncertainty and a lack of retail participation, suggest that Bitcoin may not break the $90,000 barrier this quarter. Although institutional accumulation and HODLing behavior are providing support above $80,000, the absence of strong retail inflows and the lingering effects of macroeconomic factors will likely keep Bitcoin’s price in a limbo, preventing a significant breakout in the short term. Without a substantial shift in market sentiment, Bitcoin’s journey to new highs may take longer to materialize.