Bitcoin (BTC) has left its “deep value” zone as on-chain data points to a seismic shift in BTC price dynamics.
In an X thread on March 7, Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, hailed a “new chapter” for the market.
Bitcoin “fairly priced” for first time in two years
Bitcoin at all-time highs is a serious transformation from BTC price action just months ago, but on-chain analysis shows that bulls have simply redressed the balance.
At around $70,000, Edwards shows, Bitcoin is “fairly priced” in terms of the amount of energy used by miners to participate in the network.
Capriole’s Bitcoin Energy Price metric shows the phenomenon playing out for the first time since late 2020.
Edwards describes the metric as “Bitcoin’s intrinsic value priced from the pure Joules of energy into the network only.”
“No wacky formulas, no power laws,” he explained.
“Energy alone maps the fair value of Bitcoin from inception. Currently at $70K, making Bitcoin fairly valued for the first time in 2 yrs.”
Energy price is just one example of an extensive list of market gauges that are now pointing toward even higher BTC prices.
Even miners, currently selling significant amounts of BTC despite the upcoming block subsidy halving, are enjoying a return to solid profit margins.
“Bitcoin broke out of the cost of production in recent months, along with the Ordinals fee boost, Bitcoin Mining is once again highly profitable,” Edwards wrote.
“As you can see, these breakouts often lead to repricing a lot higher. But the era of value Bitcoin is over.”
On that note, Edwards believes that those waiting for bargain Bitcoin buying opportunities have missed their opportunity.
“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,” he concluded.
“Welcome to the Bitcoin Momentum era.”
Concerns over BTC price correction linger
As Cointelegraph continues to report, not everyone is feeling optimistic about what the immediate future holds.
Related: Bitcoin accumulation phase ends as ETFs fuel new $100K BTC price target
Some see all-time highs as a watershed that will instigate a protracted correction, contrasting with the idea that institutional demand will buoy the market further.
Updating his view of how events could pan out in the coming few months, Venturefounder, a contributor to on-chain analytics platform CryptoQuant, 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 forecast.
Venturefounder added that “March is probably the most important month of this cycle following such bullish February month.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
