The past few days in the cryptocurrency market has been something of a rollercoaster with the prices dropping substantially after a prolonged sideways movement. Bitcoin [BTC], which has fallen to a yearly low, has sent shockwaves across the market leading many to believe that the cryptocurrency is losing its stronghold.
In an interview with CNBC, Lou Kerner, a Partner at CryptoOracle, spoke about how Bitcoin will be accepted in the future and the recent market crash. The financial official stated that cryptocurrencies have been weak because there is no value in an undervalued commodity.
He claimed that Bitcoin is “the greatest store of value ever created” and can even surpass gold. Kerner explained that the cryptocurrency market is compared to the internet bubble which had occurred in the early 2000s.
“Commodities such as cryptocurrencies will reach highs and lows. For example, Amazon had fallen by a massive 95% and look where they are right now. Prices will fall, it is only the long run benefits that we need to keep a lookout for.”
The discussion also covered the way in which people in the industry want blockchain technology and Bitcoin to save the world right now. Kerner also informed users that the value of the industry is not just determined by Bitcoin or another cryptocurrency but it rather encompasses everything ranging from blockchain technology to smart contracts.
The CryptoOracle official also touched upon the recent market crash that saw a lot of cryptocurrencies fall to record lows. Kerner went on to say that the excitement shown by people should be consistent and that users and holders need to be patient with the market. According to him:
“A lot of the users thing Bitcoin and cryptocurrencies need to evolve to achieve a certain purpose. Bitcoin does not need to evolve to compete with gold. It is already there”
Lou Kerner added that people in the space tend to get ahead of themselves about the profits they will get. He assured that HODLers will be rewarded sooner or later.
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Bitcoin’s on-chain/off-chain valuation indicators the key point of focus as coin heads to $13,000
With the rise in Bitcoin’s price, the rest of the cryptocurrency market has followed suit by displaying a green trend across the board. In a recent series of tweets by popular cryptocurrency analyst Adam Tache, users were informed about the top Bitcoin on-chain and off-chain valuation indicators, derived from on-chain valuation models.
The analysis touched on the Mayer Multiple created by dividing the price by the all-important – 200 day moving average. The current average Mayer Multiple stands at a figure of 1.39, which may climb higher. Looking at previous figures, the normal Mayer Multiple figures stated that if the value shoots up to 2.4, then Bitcoin eventually retraces back to a comfortable 1.5. The Mayer Multiple is usually considered as the original indicator used to clock the valuation of Bitcoin.
Another major indicator discussed in the thread was the NVT Ratio invented by Willy Woo, Partner at Adaptive Fund. The indicator is used to calculate Bitcoin’s prominence or value in the cryptocurrency space by evaluating the amount transacted on the blockchain as a “proxy for investment flow and bear and bull market cycles.”
At the moment, the NVT ratio for Bitcoin is in an abnormal region compared to the start of previous bullish patterns. The NVT ratio was above the “bear market” separator, which meant that the cryptocurrency was overbought. When Bitcoin is overbought, it usually means that the buying pressure is much higher than the selling pressure. Adam Tache opined,
“NVT signaling overbought is likely due to a number of factors — namely the proliferation of exchange-based, purely off-chain txs driving short-term price action.”
The analysis also pointed out the liveliness of the Bitcoin indicator created by Tamas Blummer. The indicator showed the inverse count of lost or ‘HODLed’ Bitcoin, while stating that when the ratio increases, long-terms holders of the cryptocurrency decrease their positions. The indicator conveyed accumulation of Bitcoin when the ratio decreased.
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