April 19, 2024
Bitcoin's at $67,473, Analyst Sees 'Deep Value Over' Near $70K
Bitcoin price today

Bitcoin’s at $67,473, Analyst Sees ‘Deep Value Over’ Near $70K

Friday, March 8, 2024: Bitcoin price is at $67,473, experiencing a notable shift in its price dynamics, with on-chain data indicating a departure from its “deep value” zone. Charles Edwards, the founder of Capriole Investments, a quantitative Bitcoin and digital asset fund, took to X (formerly Twitter) on March 7 to highlight what he sees as a significant development for the market, heralding a “new chapter.”

Despite the recent surge, Bitcoin’s current price represents a departure from the past few months’ price action. Edwards, through on-chain analysis, suggests that bulls have successfully rebalanced the market. At around $70,000, Edwards argues that Bitcoin is now “fairly priced” based on the energy expended by miners to participate in the network.

Edwards introduces Capriole’s Bitcoin Energy Price metric, describing it as “Bitcoin’s intrinsic value-priced from the pure Joules of energy into the network only.” He emphasizes its simplicity, stating, “No wacky formulas, no power laws.”

This metric indicates a phenomenon unfolding for the first time since late 2020. Edwards emphasizes that Bitcoin has broken out of the cost of production in recent months, making Bitcoin mining highly profitable once again. Even as the upcoming block subsidy halving approaches, miners continue to sell significant amounts of BTC while enjoying solid profit margins. Edwards wrote.

“As you can see, these breakouts often lead to repricing a lot higher. But the era of value Bitcoin is over.”

According to Edwards, the era of bargain Bitcoin buying opportunities has come to an end, stating, “Bitcoin deep value is gone. That ship has sailed. You had 2 years to pick up undervalued Bitcoin. Instead, an exciting new chapter has begun.”

However, amidst this optimism, not everyone shares the same positive outlook for the immediate future of Bitcoin. Some view the all-time highs as a potential trigger for a prolonged correction, challenging the prevailing narrative of institutional demand driving further market growth.

Venturefounder, a contributor to CryptoQuant, an on-chain analytics platform, is revising his outlook in the coming months. He suggests that both Bitcoin and the leading altcoin, Ether (ETH), must decisively breach their current highs. He points to the upcoming decision on whether to allow spot Ether exchange-traded funds (ETFs) in the United States as a crucial factor.

Venturefounder states, “If BTC and $ETH fail to make a definitive new ATH breakout in March, I think it’s more likely we see more downside in April/May leading to the halving and ETH ETF approval.” He underscores the significance of March as a pivotal month in this market cycle, especially following the bullish momentum of February.

Bitcoin’s recent surge has shifted its price dynamics, bringing it to what Edwards considers a fair valuation based on energy consumption. The optimism is tempered by cautious voices, emphasizing the need for sustained market momentum and the resolution of critical factors like ETF approval for a more positive outlook.

Image by Eivind Pedersen from Pixabay

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