The next Bitcoin halving is due in 286 days, and if previous halvings have taught us anything, it’s this-
Historically, Bitcoin halvings have triggered significant price rallies. It reduces the block rewards, leading to a decrease in new supply entering the market.
- First halving – Bitcoin skyrocketed from around $12 to over $1,000 within a year.
- Second halving – Bitcoin’s price surged from approximately $650 to a peak of nearly $20,000 in the subsequent year.
- Third halving – The recent halving in May 2020 propelled Bitcoin to an all-time high of over $64,000 in April 2021.
These instances demonstrate the potential for significant price appreciation in the aftermath of halvings.
So if you have been thinking about investing in Bitcoin, this is the time. Mudrex’s zero fee spree is on and Bitcoin halving is just around the corner.
#Day 5 – Bitcoin (BTC) Coin Of The Day Report
Bitcoin Score
All other cryptocurrencies originated from Bitcoin, so it will always have a special place in the cryptizens’ heart and portfolios. It currently dominates around 50% of the total crypto market cap and drives the direction of the overall crypto market.
How Did We Arrive at This Score?
Like all other cryptocurrencies, we evaluate BTC also on 4 important parameters.
1. Price Performance ✅
Despite the volatility, Bitcoin’s value has been on an uptrend since its launch in 2009. It did have some dry periods, but people that held onto it through those periods reaped good returns.
2. Fundamental Analysis ✅
When it comes to price performance, Bitcoin ticks all the boxes but does its on-chain data show the same strength? Let’s find out.
2.1. Active Addresses Count
This indicates the overall activity on the network. A growing active address count signals a growing network and impacts the price of the network token positively.
Monthly active addresses on Bitcoin went from ~ 12M to around 18M between May 2018 to April 2023 at an annual growth rate of ~9%.
2.2. NVT and MVRV Ratio
NVT Ratio: The NVT ratio compares a cryptocurrency’s market cap to its transaction volume. A high ratio suggests a potential bubble since the market cap is outpacing the transaction volume. A low ratio indicates an undervalued token.
MVRV Ratio: This helps determine if a cryptocurrency is overvalued or undervalued by comparing the market cap of a crypto to its realized cap. Realized capitalization is the total value of all cryptocurrency coins that have been moved in the past.
P.S. The NVT ratio for each cryptocurrency varies. Also, one shouldn’t look at these ratios in isolation and must always combine them with other indicators.
2.3. Blockchain Network Profitability
Blockchain network profitability is calculated by deducting the net incentives provided to network participants, from the revenue generated by the platform. 100% of the fees charged by the Bitcoin network goes to the miners. In May 2023 alone, the Bitcoin network generated over $125M in fees exhibiting a 672% year-over-year growth.
3. Community Sentiment
The below pie chart measures the sentiment for Bitcoin across Telegram and Twitter. Over the last 7 days, Bitcoin was mentioned ~1.08M times across Telegram and Twitter, of which ~316k mentions were positive, ~50.6k were negative, and about 721k were neutral.
4. Technical Analysis ✅
Oscillators: They suggest a buy signal when an asset is oversold, indicating that the security may be underpriced and vice versa.
Moving Averages: When a moving average crosses above another moving average, it indicates that the trend is bullish and vice versa.
💡Although technical analysis suggests that BTC may experience a short-term sell pressure, its strong fundamentals make it a valuable long-term investment.
Key Highlights for Jan-March
- Q1 of 2023 had Bitcoin as the best-performing asset with over 70% gains, outperforming the average ROI of five major U.S stock indexes by ~170%.
- Bitcoin’s hashrate swelled 35% in Q1 2023, marking a significant increase in computational power on the network, and in turn network security.
- The surge in BTC price in the first quarter saw Bitcoin addresses with non-zero balance surpass 44 million, while addresses holding 1 BTC or more approached 1M.
Disclaimer: None of the information in the email is intended to be financial advice. Please do your own research before making any investments.
