Mar 08, 2024

Bitcoin’s Deep Value is Fading as BTC Nears $70K, Analysts Warn

Bitcoin (BTC) Breaks Out of “Deep Value” Zone as On-Chain Data Signals Major Shift in Price Dynamics The emergence of Web 3.0 has sparked a new era for Bitcoin (BTC), with on-chain data indicating a significant change in the market’s price dynamics. In a recent Xthread, Charles Edwards, the founder of Capriole Investments – a…

Bitcoin ‘deep value is over’ says analyst as BTC price nears $70K line

Bitcoin (BTC) Breaks Out of “Deep Value” Zone as On-Chain Data Signals Major Shift in Price Dynamics

The emergence of Web 3.0 has sparked a new era for Bitcoin (BTC), with on-chain data indicating a significant change in the market’s price dynamics.

In a recent Xthread, Charles Edwards, the founder of Capriole Investments – a quantitative fund specializing in Bitcoin and digital assets – celebrated this “new chapter” for the market.

Bitcoin Reaches Fair Market Value for First Time in Two Years

Bitcoin’s recent surge to all-time highs marks a significant shift from its previous price action, but on-chain analysis suggests that bulls have simply restored balance to the market.

According to Edwards, Bitcoin’s current price of around $70,000 reflects a fair valuation based on the amount of energy used by miners to participate in the network.

Capriole’s Bitcoin Energy Price metric confirms this trend, showing that for the first time since late 2020, Bitcoin is trading at its intrinsic value based solely on the energy input into the network.

Edwards describes this metric as a straightforward calculation of Bitcoin’s value in terms of the energy required to maintain the network, without any complicated formulas or power laws.

Energy price is just one example of several market indicators that are now pointing towards even higher BTC prices.

Even miners, who are currently selling significant amounts of BTC despite the upcoming block subsidy halving, are enjoying healthy profit margins once again.

“Bitcoin has broken out of its production cost in recent months, and with the added boost of Ordinals fees, mining is once again a highly profitable venture,” Edwards explains.

Based on this, Edwards believes that those waiting for a dip in Bitcoin’s price to make a purchase have missed their chance.

“The opportunity to get Bitcoin at a deep discount has passed. That ship has sailed. Instead, we are now entering an exciting new chapter,” he concludes.

Concerns over BTC price correction continue to linger

As Cointelegraph continues to report, there are mixed feelings about the immediate future of the cryptocurrency market.

While some believe that the recent all-time highs will lead to a prolonged correction, others are confident that institutional demand will keep the market afloat.

According to Venturefounder, a contributor to on-chain analytics platform CryptoQuant, both Bitcoin and Ether (ETH) need to break their current highs in a more definitive manner in order to avoid a potential decline.

He also pointed out the upcoming decision on whether to approve spot Ether exchange-traded funds (ETFs) in the United States as a potential factor in the market’s direction.

“If BTC and $ETH fail to break their current highs in March, it is likely that we will see a downward trend in April/May leading up to the halving and potential ETH ETF approval,” Venturefounder predicted.

He emphasized that March is a critical month in this cycle, especially after the bullish month of February.

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