While Bitcoin price may be struggling to reclaim recent highs, according to one prominent market researcher, all of the first-ever cryptocurrency’s fundamentals are screaming “buy,” just ahead of the asset’s halving.
Is this the last chance crypto investors will have to buy Bitcoin at low prices ahead of the next bull run starting?
The Differences Between Traditional Fundamental Analysis And Bitcoin Explained
Investors and analysts often perform detailed technical and fundamental analysis before taking a position in an asset, and also revisit their analysis to ensure the asset as tracking along in a healthy manner.
Technical analysis involves trading indicators, chart patterns, Japanese candlesticks, and more. Fundamental analysis, however, looks at both qualitative and quantitative data, to try to make sense out of key metrics related to an underlying asset.
In stocks, this type of analysis involves reviewing revenue figures, operating expenses, and even a close look at the executive management team of a company.
With Bitcoin, however, there are no company shares, no board of directors, no CEO leading the charge. This makes applying fundamental analysis to the crypto asset a bit more challenging.
Many have developed unique models, such as the highly popular Bitcoin stock-to-flow valuation model, basing the asset’s value on the hard-coded digital scarcity.
While others have relied solely on on-chain metrics, and other statistics related to mining.
According to well-known market researcher Charles Edwards, when looking at “pure Bitcoin fundamentals” alone, “everything screams buy.”
Looking at pure Bitcoin fundamentals only.
Basically everything screams “buy”. pic.twitter.com/hpHGUjYq0m
— Charles Edwards (@caprioleio) April 28, 2020
BTC Fundamentals All Scream Buy, According to Market Research
Looking at the researcher’s chart can be a little overwhelming, with all of the various data points and unusual indicators.
The very bottom of the chart is a modified version of the Bitcoin NVT or Network Value to Transactions ratio, which has been developed to spot Bitcoin tops and bottoms. A bottom was just signaled on the indicator.
Above it, is the Bitcoin Energy Value Oscillator, which attempts to provide Bitcoin with a fair value based on energy spent.
The next indicator above, directly under the price action, is the Hash Ribbons indicator, which recently triggered a buy signal after days of miner capitulation.
Finally, along with price action, the Bitcoin Cost of Production indicator is showing that price is now on par with the cost to produce each BTC, which suggests that the price would need to double soon to prevent miners from operating at a loss.
Also depicted, in the blue line, is the Tether market cap, which has shown a correlation in the past that Bitcoin pumps when more Tether is printed. The stablecoin’s market cap just reached