Bitcoin is trapped in a downtrend, however a ‘trifecta of positives’ scream ‘deep value’
$20,000 is now not assist.
$100,000 didn’t occur.
The Bitcoin halving is 562 days away.
Bears merely refuse to launch their vice grip in the marketplace and the Federal Reserve’s coverage of rate of interest hikes and quantitative tightening is including gas to the fireplace.
Regardless of these challenges, in a Sept. 15 Twitter Space hosted by Cointelegraph, Capriole Fund founder Charles Edwards defined why he’s nonetheless bullish on Bitcoin.
Edwards stated that a number of on-chain metrics recommend that BTC is undervalued:
“I see incredible deep value and I kind of call it a trifecta and that we have three positive things happening in my mind. One is cycle timing, where between years two and three, which historically has been where all of the Bitcoin cycles are bottomed. The second is that we’ve hit 90% of normal cycle down draws. Now, obviously, all of these things can go lower, but that alone is a bit of a good value signal. And then thirdly, just the readings across pretty much all on-chain metrics, whether it be Mayer Multiple, whether it be Puell Multiple, or NVT or dormancy, everything is at kind of one in four year level discounts. So for me, it’s kind of that once a cycle opportunity that we see at the moment.”
When requested about his ideas on the earlier Bitcoin halving and the way the present financial atmosphere may influence the subsequent halving, Edwards stated:
“I think it was successful because it placed Bitcoin as one of the hardest assets in the world in the midst of massive monetary printing. And we did see a lot of the old school traditional finance, legendary investors, Druckenmiller, etc. kind of get into Bitcoin because of that as it’s kind of a hedge more or less. And that kind of triggered the next 6 to 12 months of rallying. I also think that the crypto industry still does run on the Bitcoin halving cycle kind of time frame. For now. I don’t think they will continue forever, but for now I do still think it holds weight and impact in how people invest in the space. With each subsequent halving the incremental value of the drop in inflation for bitcoin is negligible because it’s already — barring Ethereum — now the hardest asset, or harder than gold.”
2022 has proved that threat administration and constructing a balanced portfolio remains to be a skillset crypto traders are working to develop. Edwards stated:
“Whatever your method is, however you are trading or investing, whether using stop losses or not as a strategy. You need to do some detailed modeling over as much data as you can and not just two years of data, because that’s how entities have blown up in the past. Do as much as you can, like 10 years of Bitcoin at least, and assume the worst and then add again an element of buffer below that to manage your position sizing.”
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