Similar setup on the first cryptocurrency’s chart caused a run to $69,000
As Bitcoin continues to trade in the notorious $45,000-$39,000 rangebound, the market has faced a new record of on-chain volume. The range of $38,000-$39,000 reached the highest level of on-chain volume at any price since $3,400 for the first cryptocurrency, and here’s why it is important.
Concept of fair value
Throughout the trading history of the first cryptocurrency, many analysts and experts have discussed what the “fair price” is for “digital gold.” Because of its volatile nature, it was close to impossible to determine at which value traders consider BTC “fair.”
$38K-$39K is the largest level of on-chain volume at any price level since $3.4K.
— Will Clemente (@WClementeIII) March 15, 2022
4.46% (832,457 BTC) of Bitcoin's supply has moved here. pic.twitter.com/fDPkMrbBHO
With on-chain volume reaching an all-time high at approximately $39,000, we may assume that most of the market, including traders and long-term and institutional investors, consider the price the most fair for Bitcoin.
Why does fair value change?
The main reason for the constant change in the fair value of assets like Bitcoin is the immaturity of the asset compared to commodities like gold or currencies like the United States Dollar.
Besides a constantly changing fair value, Bitcoin’s volatility is also an important factor, which becomes a subject for change during the development of the market. The average volatility of Bitcoin has already decreased significantly compared to previous years.
The “old fair value” for the cryptocurrency, or the previous point of on-chain volume concentration, was $3,432, with 5.2% of total Bitcoin supply moved there, which was considered fair value before the bullrun to $69,000.
Following the retrace of the market in 2017, Bitcoin in fact reached $3,400, which was the point of the long-term reversal that allowed the digital gold reach new highs in 2021.
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Original Source : u.today
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