Bitcoin: energy value promises continuation of the rally
Bitcoin looks overvalued in terms of energy value.
Energy value suggests continued growth of the BTC rate, especially after halving.
To confirm a trend reversal, Bitcoin needs to close above the $ 10,500 level.
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There are a number of on-chain metrics to determine the direction of the Bitcoin market trend. One of these indicators is energy value, which signals the prospects for an even larger bullish breakout of the main cryptocurrency rate..
An analyst and asset manager Charles Edwards drew attention to the energy model of bitcoin, who argues that the fair value of bitcoin is determined by the scale of energy consumption, the growth rate of supply and a constant value representing the energy value in US dollars..
Bitcoin is overvalued?
When an energy value hits a bottom and bounces, it often signals a sustained uptrend. Especially after the halving. Already, we are seeing signs that the daily energy value exceeds the cryptocurrency rate itself. If this trend continues, Bitcoin growth can be expected to accelerate.
Previous bull markets in 2013 and 2017 saw a massive rise in bitcoin without a corresponding increase in the amount of energy expended..
Bulls in action
If this pricing model is to be believed, a similar situation could occur now. To reverse the trend, Bitcoin needs to confirm the recent breakout and show a close above $ 10,500.
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After an aggressive rally, the quotes partially corrected for profit taking, but remain above the important psychological level of $ 10,000, which gives hope for the rally to continue after a short pause. In case of resumption of purchases, quotes can test the above-mentioned $ 10,500 zone.
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