Fidelity’s director of global macros, Jurien Timmer, has argued that bitcoin (BTC) could be “cheaper than it looks”, highlighting on Tuesday that the cryptocurrency could be both undervalued and oversold.
Addressing his 126,000 Twitter followers, Timer pointed out that while bitcoin has fallen back to 2020 levels, its price-to-network ratio is back to 2013 and 2017 levels, which he said could indicate that it has not been evaluated.
Is BTC cheaper than it looks? If we consider a simple “P/E” metric for BTC as the price/network ratio, that ratio has returned to 2017 and 2013 levels, even though BTC itself has only returned to late 2020 levels. . Pricing is often more important than price. /thread pic.twitter.com/6XMPrtRUzF
— Jurian Timmer (@TimmerFidelity) June 15, 2022
bitcoin not rated
The price-to-network ratio is a crypto-riff on a popular metric used by traditional stock market investors called the price-to-earnings (P/E) ratio, which is used to determine That the stock is over or undervalued.
A high ratio may suggest that an asset is overvalued, while a low ratio may indicate an undervalued asset.
Timer highlighted a chart of bitcoin’s demand curve with a non-zero address of bitcoin stacked against its market cap, noting that “the price is now sitting at the bottom of the network curve.”
technically oversold
The macro analyst also shared using Glassnode’s dormancy flow indicator to create a graph that he said was “technically how high is bitcoin.”
Entity-adjusted dormancy flow is a popular metric for estimating bitcoin value from price comparison spending behavior.
According to Glassnode, a lower dormancy inflow value may increase long-term holder confidence – meaning that long-term bitcoin HODLers are buying from restless short-term sellers.
“Glassnode’s dormancy flow indicator is now at a level not seen since 2011.”
Morgan Creek Digital co-founder and Youtuber Anthony Pompliano gave a similar view to Fox Business on Monday, noting that bitcoin’s “value and price are drifting apart” and that “weaker hands are selling to stronger hands.”
“What we’re seeing right now is a shift from weak, short-term oriented ones with weak hands to strong long-term oriented ones.”
Bitcoin’s fear and greed index dropped to 7 indicating “extreme fear” on Wednesday, hitting its lowest level since the third quarter of 2019. In the past, low index numbers have often suggested a buying opportunity.
related: Bitcoin price climbs to $22.5K after Fed hikes 75 basis points, aims to halt runaway inflation
Fidelity Investments and its analyst Timer are Bullish on Bitcoin. The investment giant is working on launching a bitcoin retirement investment plan, which will allow 401(k) retirement savings account holders to invest directly in bitcoin. Timer is predicting that bitcoin may soon see a revival.
I joined Fox Business to discuss bitcoin and the macro environment.
Price and price vary. Weak hands are selling strong hands. We’ve been here before.
Thank you @lizklaman to be near me. pic.twitter.com/1S6TckUguE
— Pomp (@APompliano) 13 June 2022
