Bitcoin volatility has dropped to multi-year lows, and JP Morgan analysts say BTC is currently undervalued versus gold; a 13% rebound would target roughly $126,000 if institutional flows and cooler inflation support risk assets.
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Record low BTC volatility and BTC/Gold ratio point to institutional accumulation
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On-chain True MVRV and ETF inflows indicate BTC may be approaching a local bottom.
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JP Morgan projects a fair-value target near $126,000 if BTC captures parity with gold’s private allocation.
Meta description: Bitcoin volatility drops to record lows; BTC price target $126K as JP Morgan sees BTC undervalued vs gold—read analysis and next steps.
What is Bitcoin volatility doing in 2025?
Bitcoin volatility has cooled significantly in 2025, falling from peaks above 60% to near 30% as institutional demand and ETF inflows reduced intraday swings. This lower volatility has made BTC more attractive to large allocators and is cited by analysts as a catalyst for higher price discovery.
Source: Deribit (volatility index data)
How could Bitcoin reach $126K?
JP Morgan analysts led by Nikolaos Panigirtzoglou argue that BTC is undervalued versus gold on a risk-adjusted basis. Their model estimates that a 13% increase in market capitalization—driven by continued ETF inflows and corporate treasury accumulation—would push BTC to roughly $126,000.
Source: JP Morgan (risk allocation analysis)
Why does the BTC/Gold ratio matter now?
The BTC/Gold ratio measures how much risk capital Bitcoin consumes relative to gold. At a record low ratio of 2, BTC is consuming twice the risk capital of gold in client portfolios, signaling increased institutional willingness to allocate to digital assets in place of traditional safe havens.
Analysts note corporate treasury purchases exceeding 6% and substantial ETF inflows as key drivers that suppressed volatility and improved market depth.
What on-chain signals support a local BTC bottom?
On-chain metrics such as the True MVRV show previous local bottoms near a value of 1.6. The indicator recently returned to comparable levels, aligning with JP Morgan’s assessment and suggesting a potential local bottom if macro factors—especially July PCE inflation—favor risk assets.
Source: CryptoQuant (True MVRV)
Frequently Asked Questions
Is Bitcoin undervalued compared to gold?
JP Morgan analysts state Bitcoin is undervalued on a risk-adjusted basis versus gold. Their model suggests a 13% market cap increase could align BTC with gold’s private allocation, implying a fair-value near $126,000.
How does inflation data affect BTC short-term?
Cooled inflation (e.g., lower-than-expected PCE) would likely lift rate-cut expectations and benefit risk assets, helping BTC recover. Conversely, hotter inflation could trigger short-term bearish pressure on BTC.
What metrics indicate a BTC local bottom?
Metrics such as True MVRV hitting prior bottom levels (around 1.6), sustained ETF inflows, and corporate treasury accumulation are commonly used to identify local bottoms.
Key Takeaways
- Volatility has declined: Bitcoin’s volatility dropped to record lows, reducing execution risk for large allocators.
- Undervalued vs gold: JP Morgan sees BTC as undervalued on a risk-adjusted basis and estimates a fair value near $126,000 with sustained flows.
- Macro and on-chain alignment: True MVRV levels and ETF/corporate inflows suggest a potential local bottom if inflation favors risk assets.
Conclusion
Lower Bitcoin volatility, strong institutional accumulation, and on-chain metrics combine to present a compelling case that BTC may be approaching a local bottom. If macro data—particularly PCE inflation—comes in cooler, BTC could retest $126,000 this year. Continue monitoring ETF inflows, corporate treasury activity, and True MVRV for confirmation. Published by COINOTAG; sources cited: JP Morgan, CryptoQuant, Deribit.
