Bitcoin News Update: Expert Believes BTC Price Is Undervalued By Whopping 33%!

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Bitcoin

The post Bitcoin News Update: Expert Believes BTC Price Is Undervalued By Whopping 33%! appeared first on Coinpedia Fintech News

The Bitcoin market has made impressive gains of around 70% in the first quarter of 2023, raising hopes for further growth in Q2. Despite currently trading at $28.3k, Bitcoin bulls have faced difficulties in pushing past the $29k mark over the past two weeks. However, Bitcoin’s market dominance has closed the month on a bullish outlook, indicating the possibility of more uptrends in the near future.

Related: Bitcoin Preparing for the 2024 Bull Run-This is Where it May Trigger a Massive Upswing – Coinpedia Fintech News

From a technical perspective, Bitcoin bulls need to invalidate the possibility of a double top forming on the daily time frame. Moreover, the daily Relative Strength Index (RSI) indicator indicates a falling divergence on an overbought asset, which could lead to a price drop to $25k and below in the coming weeks.

Undervaluation of Bitcoin

According to Charles Edwards, the founder of Capriole Investments and the creator of the Hash Ribbons indicator, Bitcoin’s price is currently trading 33% below its fair value. Edwards believes that BTC‘s high organic demand has shown minimal signs of speculation, hence the historic undervaluation.

Perpetual Dominance Ratio Points to Potential Price Increase

Perpetual Dominance, a proprietary ratio of derivatives to spot trading, shows that the 2023 price action has been heavily driven by spot purchasing. As a result, Bitcoin’s price could potentially push toward $40k in the next leg.

Edwards argues that Bitcoin’s true value is to be determined through the energy spent by miners.

According to Capriole Investments, “Bitcoin Energy Value is the fair value of Bitcoin as calculated purely on the energy spent to secure the network. A clean, simple equation that values Bitcoin purely on watts of energy used to mine. Today Bitcoin Energy Value is $42K, suggesting Bitcoin is 33% undervalued.”