5 On-chain Metrics That Prove Bitcoin Price Is Undervalued
- Linda HamiltonOriginal
- 2024-11-09 15:26:19438browse
With the Bitcoin price hitting a new all-time high, the asset has entered into a price discovery zone with no history of previous technical charts.
Bitcoin (BTC) bulls have been showing strength with the Donald Trump victory and the Federal Reserve rate cuts this week while also defending the $75,000 levels. Earlier today, the Bitcoin price hit a fresh all-time high shooting past the $77,000 levels. As BTC rallies towards $80,000, investors are curious whether this quick run-up could lead to some profit booking or if there’s more fuel left in the rally.
Bitcoin price hit a new all-time high. Now what?
The Bitcoin price has hit a new record high, entering into a price discovery zone with no history of previous technical charts. However, on-chain metrics can help us make the right decision as to what investors should do next. Let’s take a look at five metrics that prove Bitcoin is undervalued.
1. Rainbow Chart
Blockchain analytics platform Lookonchain showed that the BTC rainbow chart is a long-term valuation tool that will leverage a logarithmic growth curve projecting future BTC price trends. As per the updated Rainbow2023 chart, the Bitcoin price remains still undervalued.
2. Relative Strength Index (RSI) Chart
Currently, the Relative Strength Index for BTC is 70.83, which, in comparison to the previous data shows that the price hasn’t reached its peak yet. RSI is a crucial indicator in deciding whether the asset remains in the overbought or underbought zone.
3. 200-Week Average Heatmap for BTC Price
The 200-Week Moving Average Heatmap reveals that Bitcoin’s current price point remains in the blue zone, signaling that the price peak has not yet been reached. According to the heatmap, this indicates a favorable environment for holding and potentially buying.
4. Cumulative Value Coin Days Destroyed (CVDD)
CVDD is a metric that shows the total net profit or loss realized by all BTC holders. It is calculated by multiplying the realized net profit/loss by the coin age. As per Santiment, the net realized profit for Bitcoin hit a new all-time high on December 8. However, the Cumulative Value Coin Days Destroyed (CVDD) metric is yet to reach its peak.
5. Net Unrealized Profit/Loss (NUPL)
The Net Unrealized Profit/Loss (NUPL) metric shows the total unrealized profit or loss for all BTC holders. It is calculated by multiplying the unrealized net profit/loss by the coin age. As per Santiment, the Bitcoin NUPL hit a new all-time high on December 8. However, the Net Unrealized Profit/Loss (NUPL) metric is yet to reach its peak.
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