Top exec at Fidelity thinks Bitcoin’s current market standings misrepresent its actual valuation.
Bitcoin started on a good footing, but the events of the last few months have rolled back the gains made late last year.
The coin is now reeling in pain as the price dropped from $30k down to the $20k-$22k range in less than a week. However, there are still many who think the coin is strong and could rebound hugely in the future.
One of these people is Jurrrien Timmer who works as the director of global macro at one of the largest crypto investment firms, Fidelity Investments.
The fall of BTC has brought the entire market with it, with the crypto market cap now totaling less than $1 trillion down from the highs of $3 trillion at the peak of the bull run months ago.
Is Bitcoin Undervalued?
According to Timmer, technical analysis shows that BTC may be undervalued at current levels. He mentioned the price/network ratio that he claims is currently at par with that of 2017 despite the price being lower than in December 2020.
Is BTC cheaper than it looks? If we consider a simple “P/E” metric for BTC to be the price/network ratio, then that ratio is back to 2017 and 2013 levels, even though BTC itself is only back to late 2020 levels. Valuation often is more important than price. /THREAD pic.twitter.com/6XMPrtRUzF
— Jurrien Timmer (@TimmerFidelity) June 15, 2022
For this reason, Bitcoin’s real valuation may not be reflected by the current price levels. He went on to opine that actual valuation is always of more importance than the prevailing price.
Timmer sought to prove his assertion further by referring to the current numbers of non-zero addresses associated with Bitcoin as compared to its price. Apparently, the chart shows prices running below the network curve. This could be an indication that BTC is undervalued.
Is It Oversold?
At the same time, Timmer thinks BTC is currently oversold. He shared an analytical Bitcoin chart from Glasnode. It showed that the dormancy flow indicator for BTC is currently at levels last seen back in 2011.
“The next chart shows how technically oversold Bitcoin is.”
The next chart shows how technically oversold Bitcoin is. Glassnode’s dormancy flow indicator is now to levels not seen since 2011. /END pic.twitter.com/O5SevpQf4K
— Jurrien Timmer (@TimmerFidelity) June 15, 2022
At this particular time, BTC is trading at around $21,599 and recording a 3.7% decrease over the last 24 hours. The crypto has lost close to 30% of its value in 7 days.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
