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Timmer revealed how technically oversold Bitcoin is, stating that Glassnode’s dormancy flow indicator is now at levels not seen since 2011.
Jurrien Timmer, director of global macro at Fidelity Investments, has suggested that despite Bitcoin’s current woes, it might be even cheaper than it looks. Bitcoin hasn’t had the best of years so far. After starting the year with a good performance, the price of the biggest cryptocurrency on the market is now a pale shadow of itself.
Bitcoin’s plans to bounce back further took a hit on Tuesday as the price of the digital coin dropped to as low as $20,823, a level last attained in 2020. Bitcoin’s downward spiral, just like most times, has also sent the crypto market down with it, as the total crypto market value is now under $1 trillion, down from the $3 trillion high it recorded last November.
According to Jurrien Timmer, Bitcoin, irrespective of its current performance, might still be cheaper than what investors see it for. The analyst revealed that the price/network ratio is back to levels achieved in 2017, even though the cryptocurrency is trading at its lowest level since 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,” Timmer wrote on his Twitter page.
Timmer proceeded with a thread in which he explained his assertion that Bitcoin could be undervalued in today’s market. “Another way to highlight this is by overlaying Bitcoin’s non-zero addresses against its price. Price is now below the network curve”, he stated.
Timmer then revealed how technically oversold Bitcoin is, stating that Glassnode’s dormancy flow indicator, which shows the ratio of the current market cap to the annualized dormancy value, is now at levels not seen since 2011.
Bitcoin at press time was trading at $20,585, down 7.3% in the last 24 hours. Many experts are now predicting a further slide down the drain if the price of the digital coin drops below the $20,000 support level.
Renowned Futures trader, Chartist Peter Brandt recently stated that Bitcoin could possibly drop to $12,000 if bears were to breach the $20,000 support level, adding that the biggest cryptocurrency would then struggle to achieve a new price peak until 2024.
The current volatility in the crypto space has sent investors and firms into a frenzied state. The Celsius Network, a UK-registered company that holds almost $3.7 billion in assets, has now temporarily halted all withdrawals, crypto swaps, and transfers between accounts.
According to the platform, the extreme market conditions forced their hands and they are taking this necessary action for the benefit of their entire community to stabilize liquidity and operations while the company takes steps to preserve and protect assets.