Bitcoin's MVRV Z Score has just triggered an oversold signal at the two-year level—a rare occurrence that's only happened six times throughout BTC's entire history. This metric carries significant weight because it measures the average unrealized profit or loss across all holders, and when it flashes oversold, it typically signals that investors collectively are sitting on substantial unrealized losses.

What makes the current reading particularly notable is the comparison to past cycle bottoms. By this measure, Bitcoin appears to be priced even lower than during the 2022 FTX collapse, one of the most severe capitulation events in recent memory. The gap between current valuation and historical lows suggests the market may be pricing in extreme pessimism.

These oversold conditions don't guarantee immediate rebounds, but they do highlight the tension between widespread losses and potential mean reversion opportunities in Bitcoin's price discovery process.