Network reset complete: leverage flushed, LTHs accumulating and price back above fair value.
Dec 2, 2025, 9:10 p.m.
Bitcoin BTC$92,914.22 briefly slipped below its network value based on Metcalfe value modeling for the first time in nearly two years, according to network economist Timothy Peterson.
This is typically a signal that often marks the late stages of market resets, he said.
“While this does not necessarily signal a bottom, it does indicate that most leverage has been removed and the ‘bubble’ has deflated,” Peterson said.
Metcalfe value estimates the fundamental worth of a network using activity and user-based growth, and has historically offered useful context during major cycle turns.
The dip below network value coincided with bitcoin’s steepest pullback of the cycle, a drop of about 36% that pushed the price to roughly $80,000. That move drained leverage and unwound speculative excess, which set the stage for a sharp rebound. Bitcoin has since recovered back above $90,000 as buyers stepped in and network conditions stabilized.
During the 2022 bear market, bitcoin spent the entire period trading below its Metcalfe value while activity and sentiment weakened. Since the new cycle began in early 2023, the price had remained consistently above this benchmark, supported by rising participation and renewed capital inflows. The latest correction was the first meaningful break of that trend.
Historically, periods when bitcoin trades below its Metcalfe value have delivered strong forward returns. Twelve-month performance in these conditions has been positive 96% of the time, with an average gain of 132%, compared to 75% and 68% for other periods, according to Peterson.
Tailwinds for the Network Growing
In addition, long-term holder (LTH) supply has increased significantly over the past 10 days, rising by approximately 50,000 BTC. LTHs are defined as investors who have held their bitcoin for at least 155 days. This cohort has been one of the primary sources of selling pressure over the past 12 months. As coins continue to mature from short-term speculative hands and migrate into LTH wallets, and with LTHs now accumulating rather than distributing on an aggregate net basis, this reduction in sell-side pressure should serve as a meaningful tailwind for bitcoin’s price.
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