Bitcoin (BTC) has witnessed the worst week in history. After peaking at $ 9,200 on March 8, the king fell to as low as $ 3,800 – marking a 60% loss in less than seven days.
Although the price of BTC recovered to $ 5,400 when the asset showed significant strength after the “surrender” event, some people still expressed concern that the price would return to $ 3,000, citing contextual background. Macro discount on global market.
However, there are some compelling cases that Bitcoin may not fall to $ 3,000 again. Here are 3 reasons.
Reason # 1: Extremely high funding rates may have hit a bottom
Firstly, after the fall of Bitcoin on March 12, the futures market of BitMEX has shown signs of extremely high selling.
As trader SmartContracter pointed out, the funding rate quickly reached -0.37%, meaning that the short side had to pay an amount of more than 1% to the Long side to keep their position. At the same time, the BTC price on BitMEX has dropped below the level of the spot market, resulting in a significant gap.
This is important because the last time funding and price spreads were very high was in 2017 when Bitcoin peaked at $ 20,000, according to SmartContracter.
daily dose of $ btc hopium.
funding is now 0.37% and has been for almost 24hrs, the last time we saw funding and premium this insanely high was 2017 at the top except it was longs> shorts
this time its the opposite, shorts> longs and btc is rekt, make of it what you will. pic.twitter.com/CMk7gIApNK
– 🍄🌲Benjamin Blunts🌲🍄 (@SmartContracter) March 13, 2020
This suggests that we may have seen a reflection of the $ 20,000 macro peak, which means that Bitcoin is likely to have just established a macro bottom.
Reason # 2: This week has witnessed the true “surrender” of Bitcoin investors
Moreover, this week has recorded a record trading volume on some exchanges.
Here's a chart from Joe McCann – a Cloud and AI expert at Microsoft and a well-known electricity market commentator. This chart is for Coinbase's Bitcoin market – relevant because the trading volume on the exchange has reached a record.
The record volume level on the exchanges is related to price action because the extremely large fluctuations in market activity are often signals marking peaks and bottoms; 2018's bottom of $ 3,150 was found due to a surge in selling pressure, while the $ 14,000 peak of 2019 witnessed a strong sell-off shortly thereafter, and so on.
Reason # 3: Bitcoin has been undervalued for the first time since the bottom of 2018
And finally, Bitcoin was fundamentally undervalued for the first time since the bottom of 2018, with two indices from digital asset manager Charles Edwards – daily active users and transaction value by Metcalfe's law, currently tends to be higher than the price of BTC.
This has received support from ByteTree's Charlie Morris – who on Thursday commented that Bitcoin's fair value – stems from on-chain activity and that the total number of coins in existence, is currently at $ 6,400. , clearly outstripping BTC's current levels – $ 4,900.
Bitcoin is currently undervalued for the first time since Dec 2018 bottom at $ 3500.
Price dipped below both DAA (Daily active users) Fair price and TV (Transaction value) Fair price per Metcalfe's law.
– Anondran (@AnondranCrypto) March 14, 2020
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According to CryptoSlate
Translated by ToiYeuBitcoin