In terms of increased valuation and competitive growth, Bitcoin [BTC] has been one of the stand-out performers of this year. The digital asset witnessed major price surges which resulted in a massive hike, breaching the $8,000 range for the first time since August 2018. The digital asset also managed to reform the opinion of former critics of Bitcoin, such as Marc Faber and Mark Mobius, who had earlier criticized the functionality and value of Bitcoin from an economic standpoint.
The improved development can also be verified in terms of numbers and market comparison as Anthony Pompliano, CEO of Morgan Creek Digital recently shared a tweet which demonstrated the early half performance of Bitcoin.
Pompliano laid out a comparison between the stock market and Bitcoin, where it was observed that the stock market market cap was up by 12 percent in 2019, whereas Bitcoin exhibited a staggering 111 percent growth since January 1, 2019.
It was observed that the surge was particularly dominant between April and May, when the prices of Bitcoin improved by almost $2,000.
Mati Greenspan, an eToro Analyst, remarked,
“At this point, a $200 move in the price of Bitcoin could easily lead to a move of $2000.”
The general market sentiment towards crypto-assets also seemed to have collectively improved, as other virtual currencies such as Bitcoin Cash and Litecoin also exhibited major uptrends and their valuations doubled in a span of few months.
Hedge Fund Veteran Mark Yusko also reciprocated the positive opinion toward the largest virtual asset and said that Bitcoin was a “great diversifying asset” and that it should be present in every trader’s portfolio.
The risk and volatility definitely remain in the space of cryptocurrencies, but at the moment, the optimism around crypto-assets is evident and the capital flowing into the market is one of the potential factors.
Subscribe to AMBCrypto’s Newsletter
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.
Subscribe to AMBCrypto’s Newsletter