“Bitcoin’s low price disappeared. The ship has sailed. They had 2 years to acquire undervalued BTC. Instead, an exciting new chapter has begun… Welcome to the Bitcoin Momentum era,” says the founder and CEO of Capriole Investments,
In a series of posts on X (formerly Twitter), Charles Edwards, founder and CEO of Capriole Investments, has announced the end of the declared “Low Price Era” for Bitcoin and the beginning of the “Bitcoin Momentum Era” begun, as he calls him.
Edwards’ detailed analysis includes ten on-chain metrics he developed that together indicate a significant shift in cryptocurrency valuation and market dynamics.
What Bitcoin On-Chain Data Says
One of the main metrics, the Bitcoin energy value, now places the value of BTC at $70,000. Edwards explains it in the following terms:
“Bitcoin’s intrinsic value is only valued by the pure joules of energy that enter the network. It is currently at $70,000, which is the first time Bitcoin has been fairly valued in 2 years.”
SLRV tapes, another metric introduced by Edwards, tracks the ratio of short- and long-term holders, and current trends indicate strong potential for periods of high returns in BTC investing.
“SLRV Ribbon bullish trends typically isolate higher-performing Bitcoin risk periods. The trend still seems strong today,” Edwards said.
The dynamic range NVT signal adds bands of value to BTC’s “PE Ratio” (NVT), which compares on-chain volume to market cap. According to Edwards, this metric has recently returned to relative value after being overvalued. This suggests a normalization of valuation metrics after a period of overvaluation.
In terms of production costs, the cryptocurrency has surpassed its production costs, supported by rising Ordinal fees, suggesting that mining is once again very profitable and will potentially lead to further appreciation.
The Hash Ribbons indicator, which Edwards described as its first on-chain metric, shows “increasing hash rate growth on the site,” an indicator of miner confidence and network health.
An important observation comes from the Miner Selling Pressure metric. Edwards noted the following:
“It’s VERY high right now, comparable to 2017. That highlights a few things: miners are very profitable and holding on, and ETF demand is depressing supply.”
The BTC Yardstick and Hodler Growth Rate metrics suggest that BTC may be in the early stages of a bull market, with a growing number of holders starting to sell for profits. However, Edwards notes that “Based on the length of previous cycle peaks, we should still have some time.”
The supply delta or Bitcoin Heater provides information on the proportion of short-term and long-term holders and the aggregate leverage of the market. Both metrics suggest conditions that historically precede significant market movements.
First Tickets, But Low Price Disappeared
Finally, Edwards favors the BTC Macro Index, a machine learning model that aggregates over 60 macro and on-chain metrics and is currently indicating strong market expansion. “We are in a strong expansion, in the early stages of a typical Bitcoin cycle,” Edwards said.
In summary, Edwards’ analysis predicts a multi-month bullish trend for BTC, although with potential for volatility and pullbacks due to accelerated market developments in 2024 and the proximity of the next halving. Edwards boldly states that “Overall, all metrics agree that a major multi-month uptrend is likely to develop from here.”
By Leonardo Perez
