Since early October, Bitcoin (BTC) has entered a downtrend, with its price dipping below the network value, indicating a potential recovery by 2026.
Key takeaways:
The price of Bitcoin has fallen below its fair value, a situation that has often led to positive returns over the following year.
Increased network activity points to strong adoption beyond mere speculation.
Bitcoin spot CVD has turned positive, reflecting renewed buying interest.
Bitcoin’s network value suggests a price recovery for BTC
The Bitcoin price is currently 31.4% lower than its all-time high of $126,000, which was achieved on October 6, based on data from Cointelegraph Markets Pro and TradingView.
This decline has resulted in the BTC price falling beneath its network value (Metcalfe) for the first time in two years, a trend that, according to economist Timothy Peterson, has historically forecast Bitcoin recoveries with high reliability.
Related: Bitcoin struggles with the $50K price target as the Fed injects $13.5B in overnight liquidity
Metcalfe Value for Bitcoin is the theoretical fair price based on Metcalfe’s Law, which suggests that the value of BTC rises in relation to the growth of active addresses and transactions, or network value. In other words, as more wallets and transactions emerge, the fair price of Bitcoin rises.
This discrepancy indicates that Bitcoin is undervalued compared to its growing network (e.g., active addresses), often following a speculative bubble.
“While this may not necessarily indicate a bottom, it does suggest that most leverage has been eliminated and the ‘bubble’ has deflated,” Peterson stated in a post on X, adding:
“The price to Metcalfe Value ratio has reliably predicted future performance. Historically, when price is below the Metcalfe value, performance one year later has been positive 96% of the time.”
Interestingly, when the BTC/USD pair fell below its fair value in 2019 and 2020, significant recoveries followed in the months after. The last instance of this was in early 2023, preceding a remarkable over 340% BTC price surge to its previous all-time high of $74,000, reached in March 2024.
The odds for Bitcoin’s recovery seem strong, with network growth stable, as indicated by an increase in investors holding BTC for over six months.
There is hope. The first uptick in 6M holders since the lows in April. pic.twitter.com/vFijIByTZI
— Charles Edwards (@caprioleio) December 2, 2025
Additional insights from Nansen show that the number of transactions on the Bitcoin network has increased by 15% in the past week, reaching 3.06 million, a positive signal for adoption and utility.
Looking ahead to 2026, a combination of factors, such as ongoing institutional buying and favorable macroeconomic conditions like Fed easing, could propel BTC back above the Metcalfe value trendline by mid-year, with aspirations for new all-time highs.
Signs of recovery in Bitcoin spot activity
Data from the spot market also supports the bullish case for BTC’s recovery.
Spot CVD (cumulative volume delta), which tracks the difference between buying and selling volumes over time, reversed from -$106.6 million to $29 million over the past week, according to data from Glassnode.
This reflects “stronger buy-side flow and an improving sentiment,” noted the onchain data provider in its latest Weekly Market Impulse report, adding:
“With CVD turning positive for the first time in several weeks, it signals renewed buying interest despite lower liquidity.”
As Cointelegraph reported, Bitcoin must regain momentum with higher trading volumes and a sustained recovery in spot CVD to achieve six-figure prices.
This article contains no investment advice or recommendations. Every investment and trading decision carries risks, and readers are encouraged to do their own research.
