Bitcoin's realized capitalization has reached a record high of $1.125 trillion, even as its price recently underwent a significant correction of nearly 40% over the past 10 weeks. This metric, which measures the value of Bitcoin based on the price at which each coin last moved, indicates that the asset is still in a bullish phase despite market volatility. Data from Glassnode shows that the realized cap has continued to rise through this downturn, contrasting with the behavior seen during the 2022 bear market when it fell significantly as investors sold off their holdings. Andre Dragosch, from Bitwise, suggests that Bitcoin might be undervaluing the current macroeconomic conditions. He argues that strong global growth and the Federal Reserve's shift towards a more dovish stance could lead to increased liquidity and a weaker U.S. dollar, historically favorable for Bitcoin. Dragosch believes that these factors could challenge the traditional four-year cycle narrative, with potential for price increases in 2026. He draws parallels to previous market behaviors seen during the Covid recession and the FTX collapse, emphasizing that current indicators do not point to an impending recession. Despite a recent rebound in Bitcoin's price above $70,000, market sentiment remains cautious. The Crypto Fear & Greed Index still reflects “extreme fear,” signaling unease among investors. The market experienced a significant $8.7 billion in losses recently, which may indicate a capitulation event where weaker hands are selling their assets, potentially shifting Bitcoin supply to stronger holders. This mix of rising realized cap and market anxiety paints a complex picture for Bitcoin's near-term outlook.