On Saturday, Bitcoin experienced a robust rally, climbing above $58,250. Despite this upward movement, it was unable to sustain the momentum and close above the 200-day Exponential Moving Average (EMA). This led to the formation of a bearish engulfing candlestick pattern on Sunday, signaling potential downside momentum. Currently, Bitcoin is trading below $56,000, positioning it at a critical juncture in terms of technical analysis and market sentiment.
Sina G, the COO and co-founder of 21st Capital, provided a breakdown of the factors influencing Bitcoin’s price trajectory today, particularly highlighting recent declines and evaluating its undervalued state through sophisticated metrics. Starting with a historical overview, Sina pointed out that Bitcoin had seen a drastic 26% decline from a March peak of $73,000, settling around $56,000 in recent weeks.
This sharp decrease has been attributed to several macroeconomic and sector-specific factors. According to him, Bitcoin’s fall from the $73,000 peak in March to $56,000 aligns with historical bull market corrections, which often see significant yet temporary retracements.
The influence of Bitcoin ETFs has been pivotal. Initially, these ETFs contributed significantly to the price surge from $16,000 to $73,000, as investors engaged heavily in a buy-the-rumor, buy-the-news strategy. “Up to mid-march ETF flows were very strong and the market moved up. Since then ETFs slowed down and bankruptcy outflows took over, causing a weak price action all the way down to $56K.
A notable recent impact on Bitcoin’s price has been the selling activity of the German government, which disposed of Bitcoin seized in 2013 from the pirated content platform Movie2k.to. “The government’s decision to liquidate approximately 10,000 coins across three transactions coincided directly with significant price drops on specific dates in June and July,” he noted. This selloff contributed to a steep 24% crash in June and July, exacerbated by the large volume of Bitcoin introduced into the market.
Is Bitcoin Undervalued?
To address whether Bitcoin is currently undervalued, Sina turned to the Volatility-Adjusted Price Level Index (VPLI), a proprietary metric developed by 21st Capital. “Currently, our VPLI is at -3.57, which indicates that Bitcoin is significantly below its fair price,” Sina stated. He further clarified that historically, a VPLI score of -10 corresponds with bear market bottoms, placing the current reading in a context that suggests Bitcoin is potentially undervalued.
“This puts us in the 41th percentile of values – i.e., Bitcoin has only spent 41% of below this VPLI reading (most of which during the bear markets). So the risk-reward balance is favorable,” he added.
Looking forward, Sina highlighted two critical short-term indicators that could dictate Bitcoin’s immediate price movements: the continuation of Bitcoin sales by the German government and the behavior of the perpetual swaps funding rate. “Recently, the funding rate has been negative, which is typically a bearish signal. This suggests that many traders are taking short positions, anticipating further declines, which paradoxically might indicate that the market is close to reaching a bottom,” he concluded.
At press time, BTC traded at $55,835.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
FAQs
Bitcoin is 29% overvalued. That's according to the valuation model that provides one of the most compelling and useful perspectives on bitcoin's price.
What are the experts saying about Bitcoin? ›
Bitcoin's frequent price fluctuations undermine its reliability as a store of value or as a hedge against inflation, at least in the short term. And without wider acceptance of bitcoin as a currency, its value seems to largely hinge on speculation and market sentiment, rather than intrinsic value.
What is the unbiased price prediction for Bitcoin? ›
Bitcoin Price Prediction 2024-2030
| Year | Minimum Price | Maximum Price |
|---|
| 2024 | $38,000 | $85,000 |
| 2025 | $50,000 | $102,000 |
| 2026 | $45,000 | $90,000 |
| 2030 | $95,000 | $160,000 |
Jul 19, 2024
Like any investment, Bitcoin is not risk-free. Cryptocurrency has many risks, from market to regulatory and cybersecurity risks. On July 18, 2024, WazirX, a crypto exchange platform in India, experienced a cyber attack on one of its multisig wallets, resulting in the theft of digital assets exceeding $230 million.
Did JP Morgan say Bitcoin is undervalued? ›
Despite the crypto slump, banking giant JPMorgan says bitcoin is massively undervalued. Maintaining its estimate of bitcoin's fair value at $38,000, the bank today reiterated the assessment it gave the asset in February when the cryptocurrency was trading around $43,400.
What is the true value of Bitcoin? ›
Products, services, wages, and salaries are not valued in bitcoin but in fiat currency. Bitcoin must be converted to a government-backed currency to be used, even in countries where it is recognized as legal tender. The argument here is that because Bitcoin is convertible, it doesn't have any underlying value.
How much will 1 Bitcoin be worth in 2025? ›
Bitcoin Price Prediction Table
| Year | Average Price* | Percent Increase |
|---|
| 2024 | $64,784.06 | -% |
| 2025 | $88,862.10 | 37.50% |
| 2026 | $125,935.23 | 42.05% |
| 2027 | $183,299.42 | 46.40% |
8 more rowsBitcoin Price Prediction 2024 – 2025
The market is expected to see a low price of $30,225, with a potential move to the $51,438 level in 2024. In 2025, the low is expected to be $39,512, with a high of $62,723. The average price in 2024 is roughly $40,000.
What is the realistic price target for Bitcoin? ›
Wood boldly predicted that BTC could surge 5,837%, reaching a price of $3.8 million per coin, by 2030. Her bullish projection, coupled with the recent resurgence in market sentiment, is igniting excitement among crypto enthusiasts and investors.
What will $1000 of Bitcoin be worth in 2030? ›
If Bitcoin continues this pattern into 2030, the price could peak around 2029 or 2030. If Wood is correct and Bitcoin reaches $3.8 million, if you invested $1,000 in Bitcoin now, it would be worth $54,280 in 2030. This would result in a compounded annual growth rate (CAGR) of nearly 95%.
For that reason, while current market conditions are favorable for anyone considering buying Bitcoin, it is an asset you should purchase only at your own risk. Because while Bitcoin may have the potential for significant returns, you may also lose most of your investment.
How much Bitcoin should I buy to become a millionaire? ›
While this is a lower-bound scenario, we can use it as a baseline to show what it takes for investors to become Bitcoin millionaires. Assuming an annualized return of 30%, one would need to invest roughly $85,500 annually for five years to hit millionaire status. Over 10 years, this number falls to around $18,250.
Why is Bitcoin overpriced? ›
Bitcoin's price is primarily affected by its supply, the market's demand, availability, competing cryptocurrencies, and investor sentiment. Bitcoin supply is limited—there is a finite number of bitcoins, and the final coins are projected to be mined in 2140.
Is Bitcoin have no intrinsic value? ›
Similar to Fiat currency, Bitcoin (or most of the cryptocurrencies) is also not backed by any gold or silver hence does not have any intrinsic value. The value of any currency comes from the backing of the state and the trust that people have over the government.
Does Bitcoin really have a future? ›
Bitcoin is most likely to remain popular with cryptocurrency speculators over the next decade. Bitcoin the blockchain will probably continue to be developed to address long-standing issues like scalability and security.
Which crypto is undervalued? ›
Another hot crypto on our list of top undervalued altcoins to buy this season is Pepe Unchained or $PEPU. At first glance, Pepe Unchained comes across as a meme coin. But beyond its outrageous exterior lies one of the most promising crypto projects of 2024.
