Key Takeaways
The volatility of the BTC/Gold ratio has dropped to a record low of 2, an ‘undervalued’ level that could push BTC to $126K, per JP Morgan analysts.
Bitcoin’s [BTC] price swings or volatility have cooled off significantly, from over 60% to record lows of 30% in 2025.
In August, Bitcoin’s price dropped by 11%, falling from above $124,000. Despite this decline, it has yet to show strong support or a decisive rebound at the $110,000 level.
According to JP Morgan analysts, led by the Managing Director Nikolaos Panigirtzoglou, this was ‘too low’ and deemed the current BTC price as ‘undervalued’ against gold.
Source: Deribit
Bitcoin to swing back to $126K?
According to the analysts, a strong accumulation of over 6% by corporate treasuries played a huge role in suppressing volatility.
Compared to gold, the volatility of the Bitcoin/Gold ratio has also dropped to a record low of 2. This meant that BTC consumed twice as much risk capital as gold in client portfolios, the analysts added.
Source: JP Morgan
Analysts noted that Bitcoin’s lower volatility presented a strong buying opportunity.
This was further supported by high inflows from exchange-traded funds (ETFs) and crypto treasuries. Together, these factors signaled favorable market conditions for accumulating BTC.
“Lower volatility makes it easier for institutions to allocate capital, with bitcoin and gold now closer than ever in risk-adjusted terms.”
JP Morgan estimates that Bitcoin needs to rise by 13% to match gold’s $5 trillion private allocation.
At press time, Bitcoin’s market cap stood at $2.2 trillion, a 13% increase would push BTC’s fair value to around $126,000.
Analyst Nikolaos Panigirtzoglou suggests this target could be reached by the end of the year.
On-chain data shows that Bitcoin remains undervalued and is approaching a local bottom, provided current 2025 trends continue.
The True MVRV valuation metric supports this view, showing that previous local bottoms in May and June occurred when the indicator hit 1.6.
The indicator dropped to the same level at the time of writing, suggesting a bottom could be reached if upcoming inflation data favors risk assets.
Source: CryptoQuant
Hence, if July inflation (PCE) data comes in cooler than expected, it could boost September rate cut expectations and BTC price recovery.
On the contrary, a hotter or higher inflation print could trigger a bearish sentiment in the short term.
