Bitcoin price could rise tenfold from current levels. Technical Director Raphael Schultze-Kraft of Glassnode arrived at this conclusion based on six on-chain metrics.
1/ Where are we in the #Bitcoin market cycle?
A look at some of the most important on-chain market indicators.
TLDR: Insanely bullish, most metrics are far from the top. If things develop anything like 2017, we could see more than 10x $BTC from here.
A THREAD 👇 pic.twitter.com/d1jU0h5fxA
— Rafael Schultze-Kraft (@n3ocortex) December 8, 2020
The expert assessed Bitcoin’s trajectory from the moment each metric recorded values similar to those seen today, up to Bitcoin’s all-time high (ATH) reached in 2017. He then multiplied this price move by its current price to derive a target.
One metric — Net Unrealized Profit/Loss (the difference between unrealized profits and losses based on the last movement of coins) — currently stands at only 78% of the value observed at the peak three years ago.
Over this period, the first cryptocurrency rose by 1,400%, having updated its all-time high (ATH). If this momentum is applied to its current price level, the target would be around $286,000.
Data: Glassnode.
The Market Cap to Thermocap ratio, which assesses Bitcoin’s price premium relative to miners’ costs, is currently 25% below its 2017 ATH. By applying the steps above, Schultze-Kraft derived a Bitcoin target of $138,000.
The MVRV Z-Score, indicating whether Bitcoin is overvalued or undervalued relative to its “fair value,” is today equivalent to 66% of its 2017 ATH. The previously described algorithm could point to room for Bitcoin to reach $240,000.
Long-term holder metrics MVRV (average profit/loss across all issued coins) and SOPR (profitability of spent outputs) are about 13% below their 2017 peaks. Using a similar methodology, the Glassnode technical director obtained ‘fair’ Bitcoin values of $274,000 and $328,000.
How to calculate the future price of Bitcoin and other crypto assets (Part 2)
According to the Reserve Risk metric, which assesses long-term holders’ confidence relative to price, Schultze-Kraft arrived at Bitcoin’s upside to $240,000. The metric sits 11% below its 2017 ATH.
The expert urged readers to approach these calculations with caution and not treat his reasoning as investment advice. He added that the aim of his inquiry is to illustrate the growth potential of digital gold, based on the premise that the presented on-chain metrics are far from the critical levels observed in 2017.
8/ Take these numbers with a grain of salt, it’s a single datapoint.
What this aims to show: These #BTC cycle indicators are still far away from their values that indicated a $BTC top in 2017.
If things develop like 2017 and the metrics hold true, I expect over 10x from here.
— Rafael Schultze-Kraft (@n3ocortex) December 8, 2020
As noted, 156 000 surveyed Cindicator traders, that Bitcoin will trade around $30,000 in 2021.
According to Bloomberg analysts, the price range for Bitcoin next year could be $10 000-$50 000, and its market capitalization could rise to $1 trillion.
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