The price of Bitcoin could rise tenfold from current levels. The technical director came to this conclusionGlassnode Rafael Schulze-Kraft based on six on-chain metrics.
The expert evaluated the dynamics of bitcoin from the moment when each of the metrics observed similar values, as now, to recorded when the first cryptocurrency record in 2017.Then he multiplied this price of bitcoin to its current level.
1/ Where are we in the #Bitcoin market cycle?
A look at some of the most important on-chain market indicators.
TLDR: Insanely bullish, most metrics are far from the top.If things develop anything like 2017, we could see more than 10x $BTC from here.
A THREAD? pic.twitter.com/d1jU0h5fxA
— Rafael Schultze-Kraft (@n3ocortex) December 8, 2020
One of the metrics is Net UnrealizedProfit/Loss (the difference between unrealized profits and losses based on the last coin movement) is now only 78% of what it was at its peak three years ago.
The first cryptocurrency rose in price by 1400% during this period of time, updating its historical maximum (ATN). When multiplying this dynamics by the current price value, the analyst received a target of $286,000.
Metric Market Cap to Thermocap ratio,estimating the premium of the price of the first cryptocurrency to the costs of miners, is now 25% away from ATH in 2017. By following the steps mentioned above, Schulze-Kraft received a target for Bitcoin of $138,000.
MVRV Z-Score, indicatingovervaluation or undervaluation of the first cryptocurrency relative to its “fair price”, today is equivalent to 66% of ATH in 2017. The algorithm described earlier may indicate the potential for Bitcoin to grow to $240,000.
Assessing the behavior of long-term holdersThe metrics MVRV (average profit/loss for all issued coins) and SOPR (spent output profitability ratio) are 13% below the record values of 2017. Using a similar methodology, the Glassnode CTO came up with “fair” Bitcoin values of $274,000 and $328,000.
According to the Reverse risk indicator, which evaluates the levelconfidence of long-term holders of the first cryptocurrency regarding its price, Schulze-Kraft received Bitcoin's power reserve up to $240,000. The metric is 11% away from ATH in 2017.
The expert called to treat the calculations critically and not to perceive his reasoning as a recommendation to action.He added that the purpose of his research is to show the growth potential of digital gold, based on the premise that the presented onchain metrics are far fromcritical values of 2017.
8/ Take these numbers with a grain of salt, it's a single datapoint.
What this aims to show: These #BTC cycle indicators are still far away from their values that indicated a $BTC top in 2017.
If things develop like 2017 and the metrics hold true, I expect over 10x from here.
— Rafael Schultze-Kraft (@n3ocortex) December 8, 2020
As a reminder, 156,000 traders surveyed by Cindicator are confident that Bitcoin will trade around $30,000 in 2021.
According to Bloomberg analysts, the range of fluctuations in the price of Bitcoin next year could be $10,000-$50,000, and its capitalization could increase to $1 trillion.
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