Key Points
- Bitcoin (BTC) is now considered "fairly priced" at around $70,000 according to on-chain data.
- The era of "value Bitcoin" is over, marking the start of a new "Bitcoin Momentum era".
Bitcoin (BTC) has emerged from its “deep value” zone, as on-chain data indicates a significant change in BTC price dynamics.
Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, acclaimed a “new chapter” for the market on March 7.
Bitcoin's Fair Pricing
Bitcoin's all-time highs mark a drastic change from BTC price movements just a few months ago. However, on-chain analysis suggests that the bulls have merely restored equilibrium.
Edwards demonstrated that Bitcoin is “fairly priced” around $70,000, relative to the energy miners use to participate in the network.
Capriole’s Bitcoin Energy Price metric, which Edwards describes as “Bitcoin’s intrinsic value priced from the pure Joules of energy into the network only,” is presenting this phenomenon for the first time since late 2020.
Bitcoin's Momentum Era
Edwards believes that those who were waiting for bargain Bitcoin buying opportunities have missed their chance. He states, “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.”
Despite the optimism, some are apprehensive about what the immediate future holds. Some predict all-time highs as a turning point that will trigger a prolonged correction, contrasting with the idea that institutional demand will support the market further.
A contributor to on-chain analytics platform CryptoQuant, Venturefounder, suggested that both Bitcoin and the largest altcoin, Ether (ETH), need to make a more definitive breach of current highs. He referenced the upcoming decision over whether or not to allow spot Ether exchange-traded funds (ETFs) in the United 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 predicted. He added that “March is probably the most important month of this cycle following such bullish February month.”
