CVDD Model Indicates Bitcoin Is Not Deeply Undervalued: Current Drawdown History Lags Behind

Bitcoin has been stabilizing since late November, trying to find a solid direction while the market seeks stability in anticipation of the next volatility wave. After failing to maintain momentum above the highs seen in October 2025, price movements have entered a broad range, reflecting increasing uncertainty among investors. While some believe this lull could be a foundation for further upward movement, others remain cautious, referencing behaviors seen in past bear markets.

Key Takeaways

Bitcoin has been consolidating, exhibiting a range of price movements and uncertainty.
Current drawdown from the October peak is around -27%, historically shallow compared to past cycles.
The Bitcoin CVDD model suggests that the market remains above critical long-term support levels.
Current market indicators point towards a weak structure, with consolidation continuing around $90,000–$91,000.
Sustained recovery requires reclaiming the $95,000–$98,000 range.

Top analyst Axel Adler has reported that the current drawdown in Bitcoin from the high in October remains historically shallow. The Bitcoin Bear Market Correction Drawdowns chart compares drawdown depth across market cycles since 2011, showing how unique the current cycle has been. Currently, in the 2025+ cycle, the drawdown is around -27%, with a maximum correction of approximately -33%.

Bitcoin Bear Market Correction Drawdowns | Source: CryptoQuant

In comparison, previous bear markets experienced far more significant drops: the cycle of 2011 saw a collapse of -92%, while both the 2013-2015 and 2017-2018 cycles observed drawdowns nearing -82%. The 2021-2022 bear market ended with about -75%.

This relative resilience might hint at a structural shift in Bitcoin’s market dynamics. The increasing influence of spot ETFs and institutional investments could be softening volatility and minimizing the extent of corrections. However, Adler warns that the current bear phase is still relatively young, making it premature to conclude that Bitcoin has definitively moved into a new phase with less severe drawdowns.

Current Market Valuation of Bitcoin

Adler further elaborates that the Bitcoin Cumulative Value Days Destroyed (CVDD) model provides essential context for assessing Bitcoin’s current market status within its larger cycle. The CVDD is a long-term on-chain valuation tool that tracks “destroyed” coin days, which represent periods when long-held coins are spent. Historically, this activity has been linked to significant market transitions and macroeconomic bottoms.

Bitcoin Cumulative Value Days Destroyed | Source: CryptoQuant

The CVDD chart plots Bitcoin’s price against various valuation bands, including the basic CVDD level and its 5x and 10x multiples. Currently, Bitcoin is trading around $91,000, placing it approximately 2x above the base CVDD, which is estimated at roughly $46,600. Historically, this level has been associated with phases of bear market bottom formation instead of full capitulation events. In prior cycles, substantial undervaluation and panic selling typically happened when the price approached or dropped below the base CVDD level.

The fact that Bitcoin remains significantly above this essential support level indicates that the market has yet to enter a genuine capitulation phase. Long-term holders still seem largely intact, with selling pressure from older coins remaining comparatively modest. As Adler points out, the base CVDD level is serving as a long-term structural floor for Bitcoin.

In summary, the combination of a shallow drawdown profile and Bitcoin's position above crucial CVDD valuation thresholds suggests that the current correction is real yet consistent with an early-stage bear cycle and not indicative of a fully established market bottom.

BTC Consolidation Amid Weak Structure

Bitcoin continues to hover in a narrow consolidation range after the steep decline from October highs, with price levels around $90,000–$91,000. This area has created a short-term equilibrium following the significant drop from above $100,000, but the larger technical setup remains weak. Prices are still below the 100-day and 200-day moving averages, both trending downward, reinforcing the notion that the prevailing trend has shifted from bullish to corrective.

BTC price remains in a range | Source: BTCUSDT chart on TradingView

The recent rebound from the December lows around $86,000 lacked substantial follow-through, indicating that demand remains cautious rather than aggressive. While buyers have successfully defended higher lows temporarily, each upward movement has been constrained near the declining moving averages, underscoring persistent overhead supply.

Additionally, trading volume has decreased during this consolidation phase, suggesting a lack of conviction from both buyers and sellers.

From a market structure viewpoint, Bitcoin seems to be forming a basing pattern rather than triggering a reversal. It is essential for Bitcoin to stay above the $88,000–$90,000 support zone to avert a deeper pullback towards the mid-$80,000s. However, any sustained recovery would depend on reclaiming the $95,000–$98,000 area, where essential moving averages converge.

In conclusion, the current price movement is best understood as consolidation within a broader corrective phase, not as the beginning of a new uptrend.