Nuclear Crypto Market Winter is “Confirmed” Over, Bitcoin Jumps Ahead of its “Intrinsic Value”


  • 13 reasons why – crypto winter is over
  • Bitcoin mirrors the boom-bust pattern of 2017

The ongoing month has proved to be a month of great greens as Bitcoin surged from around $5,200 to $8,200. Moreover, it has been now “confirmed” that the crypto winter is finally over.

 

Thomas Lee, co-founder and head of research at Fundstrat Advisors and a Bitcoin bull explained on Sunday in a Tweet how the certain events that occurred over past six months give the clarification that crypto winter is over.

“After a disturbing pullback to ~$6,200, Bitcoin back >$8,000 further cementing positive trend intact,”

said Lee.

13 Reasons Why

It all started with the capitulation to $3,150 in December 2018, the yearly low BTC saw after the hash war of Bitcoin Cash in November 2018. During this period we also saw Grayscale’s Bitcoin trust’s NAV premium falling to 5 percent, the lowest level since 2017. Since then, the fund premium has surged over 40 percent.

Other prominent reasons involve daily on-chain transactions turning positive for the first time since January 2018 while over the counter (OTC) volumes started surging as well. Many brokers even reported 60-70 percent increase in new client activity versus four months ago.

Fundstrat’s Bitcoin Misery Index also crossed above 67 first time since August 2017. More recently, we saw Bitcoin closing above the 200 days moving average. The “golden cross” in late April gave us the sign that trend has reversed.

We also saw how the negative news, Bitfinex, and Tether involved in manipulation and Binance hack of 7,000 BTC, had little to no effect on Bitcoin price.

An event that is ongoing is the US-China trade war that has spurred investors into buying bitcoin as it presents itself as a safe store of value that is outperforming traditional assets.

Adamant Capital's “Bitcoin in Heavy Accumulation” report stated that Bitcoin has hit its bottom while the recent Consensus event has Tom Lee confirming that the winter is over.

Bitcoin Mirroring Boom & Bust Cycle of 2017 – JP Morgan

In the wake of Bitcoin’s recent rally, JPMorgan Chase & Co. says the leading cryptocurrency is getting ahead of itself. In a note on Friday, strategists including Nikolaos Panigirtzoglou said the world's top cryptocurrency has surged beyond its “intrinsic value” reflecting a move similar to that of 2017’s.

The strategists treated Bitcoin as a commodity and calculated it as the cost of production by using estimated computational power, hardware energy efficiency, and electricity expense as inputs.

“Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”

Currently, Bitcoin is trading at $7,887 with 24-hours loss of over 1 percent after going to almost $8,200 level today at one point.

“Defining an intrinsic or fair value for any cryptocurrency is clearly challenging. Indeed, views range from some researchers arguing that it has no fundamental value, to others estimating fair values well in excess of current prices.”

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