{"id":8349,"date":"2024-03-06T16:11:42","date_gmt":"2024-03-06T16:11:42","guid":{"rendered":"https:\/\/www.bitrabo.com\/discover\/bitcoin-on-chain-data-signals-end-of-deep-value-era-hedge-fund-ceo\/"},"modified":"2024-03-06T16:11:42","modified_gmt":"2024-03-06T16:11:42","slug":"bitcoin-on-chain-data-signals-end-of-deep-value-era-hedge-fund-ceo","status":"publish","type":"post","link":"https:\/\/www.bitrabo.com\/discover\/bitcoin-on-chain-data-signals-end-of-deep-value-era-hedge-fund-ceo\/","title":{"rendered":"Bitcoin On-Chain Data Signals \u2018End Of Deep Value Era\u2019: Hedge Fund CEO"},"content":{"rendered":"

In a recent series of posts<\/a> on X (formerly Twitter), Charles Edwards, the founder and CEO of Capriole Investments, has declared the end of the \u201cdeep value era\u201d for Bitcoin, introducing what he refers to as the beginning of the \u201cBitcoin Momentum era.\u201d Edwards\u2019 detailed analysis involves ten on-chain metrics he developed, which collectively suggest a significant shift in the cryptocurrency\u2019s valuation and market dynamics.<\/p>\n

<\/span>What Bitcoin On-Chain Data Says<\/span><\/h2>\n

One of the core metrics, Bitcoin\u2019s Energy Value, now places BTC\u2019s value at $70,000. Edwards explains, \u201cBitcoin\u2019s intrinsic value priced from the pure Joules of energy into the network only. Currently at $70K, making Bitcoin fairly valued for the first time in 2 yrs.\u201d<\/p>\n

The SLRV Ribbons, another metric presented by Edwards, tracks the ratio of short-term to long-term holders, with current trends indicating strong potential for high-return periods in BTC investments. \u201cSLRV Ribbon uptrends usually isolate the best returning Bitcoin risk-on periods. The trend still looks very strong today, Edwards noted.<\/p>\n

Dynamic Range NVT Signal adds value bands to BTC\u2019s \u201cPE Ratio\u201d (NVT), which compares on-chain volume to market cap. According to Edwards, this metric has recently returned to a state of relative value after being overvalued. This suggests a normalization in valuation metrics after a period of overvaluation.<\/p>\n

In the context of Production Cost, the cryptocurrency has surpassed its production costs, buoyed by the Ordinals fee boost, indicating that mining is again highly profitable and potentially leading to higher repricing. Edwards noted that \u201cBitcoin broke out of the cost of production in recent months\u2026 But the era of value Bitcoin is over.\u201d<\/p>\n

The Hash Ribbons indicator, which Edwards described as his first on-chain metric, shows \u201cwidening growth in Hash Rate locally,\u201d an indicator of miners\u2019 confidence and network health.<\/p>\n

A significant observation came from the Miner Sell Pressure metric. Edwards pointed out, \u201cIt\u2019s VERY high right now, comparable to 2017. This highlights a few things: miners are v. profitable and locking that in, and ETF demand is draining supply.\u201d<\/p>\n

The BTC Yardstick and Hodler Growth Rate metrics indicate that BTC might be in the early stages of a bull run, with a growing number of holders beginning to sell into profits. However, Edwards suggests, \u201cBased on prior durations to cycle peaks, we should have some time to go.\u201d<\/p>\n

Supply Delta and Bitcoin Heater, respectively, provide insights into the ratio of short-term to long-term holders and the aggregated market leverage. Both metrics suggest conditions that historically precede significant market movements.<\/p>\n

<\/span>Early Innings, But Deep Value Is Gone<\/span><\/h2>\n

Lastly, Edwards favors the BTC Macro Index, a machine learning model aggregating over 60 on-chain and macro metrics, which currently signals strong market expansion. \u201cWe are in strong expansion, in the very early innings of a typical Bitcoin cycle,\u201d Edwards noted.<\/p>\n

<\/p>\n

Summarizing, Edwards\u2019 analysis foresees a multi-month uptrend for BTC, albeit with potential for volatility and pullbacks due to the accelerated pace of market developments in 2024 and the approach of the next Halving. Edwards boldly states, \u201cAll metrics generally agree that a very large multi-month uptrend will likely emerge from here.\u201d<\/p>\n

\"Summary:<\/p>\n

Edwards concludes, \u201cBitcoin\u2019s deep value is gone. That ship has sailed. You had 2 years to pick up undervalued BTC. Instead an exciting new chapter has begun\u2026 Welcome to the Bitcoin Momentum era.\u201d<\/p>\n

At press time, BTC traded at $66,262.<\/p>\n

\"Bitcoin