A digital analyst asserts Bitcoin is undervalued despite uncertain market conditions. Significant institutional investments and decreased exchange reserves indicate a bullish trend. Factors such as rising steady demand and increased whale accumulation suggest potential price increases ahead, while funding rates may also signal upward price pressure.
A digital asset analyst has highlighted bullish on-chain metrics for Bitcoin (BTC) amidst current market challenges. Significant institutional inflows combined with reduced exchange reserves suggest that Bitcoin is undervalued compared to previous market cycles. The increased profit supply and optimistic projections indicate potential price growth, thereby signalling a bullish trend ahead.
Following a recovery in the crypto market, Bitcoin bulls are boosting trader confidence through substantial exchange withdrawals. Analyst Boris Vest observed that exchange reserves have dwindled to levels not seen since 2018, indicating a trend towards long-term holding. Currently, around 2.43 million BTC are held on exchanges, with older assets, typically aged seven days, being moved to different custodians.
In contrast, during the 2021 bull cycle, BTC reserves were at 3.4 million. This significant reduction points to Bitcoin being undervalued, especially in light of recent market conditions. Vest notes that the declining supply is likely indicative of a potential price increase. Additionally, major crypto holders, or whales, have been accumulating and shifting large amounts of Bitcoin off exchanges.
The current stablecoin supply ratio of 14.3 indicates a rising availability of capital for purchasing assets. Despite fluctuations in price, the SSR remains on an upward trajectory and has not reached levels of the 2021 bull cycle, supporting the argument that Bitcoin is still undervalued.
Funding rates have surged alongside price increases, suggesting that long positions on Bitcoin have grown excessively inflated, indicating a prime selling opportunity for market makers. Following the all-time high, these funding rates have reverted to lower levels, approximately 0.01-0.00. Should these rates turn negative, it may signal increased short positions and possible upward price pressure.
As of the latest update, Bitcoin is trading at $83,783, having decreased by 0.5% today but showing over 9% gains for the week. Key factors, including a rebound in institutional demand, have led traders to anticipate a price increase this quarter. Furthermore, CryptoQuant reports that Bitcoin’s supply in profit exceeds 70%, indicating stability in price. For long-term holders, the next target is the 80% profit range, showing increased bullish momentum. This week’s inflows into spot Bitcoin ETFs further support positive sentiment for a rise in prices.
