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Stuck in a downturn, could bitcoin retain its “deep value”?

Stuck in a downturn, could bitcoin retain its "deep value"?

The $20,000 bar no longer serves as support.

The $100,000 sum did not happen to be the price of bitcoin.

Bitcoin expansion is 562 days away.

The bears simply refuse to loosen their grip on the market. The Federal Reserve’s policy of raising interest rates and quantitative tightening is only adding fuel to the fire.

Despite these difficulties, i TwitterSpace hosted by Cointelegraph on September 15, Charles Edwards, founder of the Capriole Fund, explained why he is still bullish on bitcoin.

Edwards said that several on-chain indicators suggest that BTC is undervalued:

“I see incredible deep value and a kind of trifecta. Three positive things are happening in my mind. The first is the timing of the cycle, between the second and third year, which has historically been the lowest point of every bitcoin cycle. The second is that we have reached 90% of the normal drawdowns of the cycle. Of course, all of these things can go lower, but that alone is a sign of good value. And thirdly, readings for almost every indicator in the channel, whether Mayer Multiple, Puell Multiple, NVT, or dormancy, are all at the four-year discount level. So to me, it’s a unique cycling opportunity that we’re seeing right now. »

When asked what he thought of bitcoin’s previous spread and how the current economic environment might affect the spread to come, Edwards replied:

“I think it was successful because it made bitcoin one of the hardest assets in the world amid the massive money printing. And we saw a lot of the old school mainstream finance, legendary investors, Druckenmiller, etc. get into bitcoin because of it. Because it’s kind of the cover more or less. And that kind of drove the next 6 to 12 month increases. I also think that the cryptocurrency industry is still operating on the bitcoin halving cycle. I don’t think it will continue forever, but right now I think it has weight and influence on how people invest in this space. With each successive halving, the incremental value of reduced inflation for bitcoin is negligible because it is already – unlike Ethereum – the hardest asset, or harder than gold. »

The year 2022 proved that risk management and building a balanced portfolio is still a skill set that crypto investors are working to develop. Edwards said:

“No matter what method you do, how you trade or invest, whether you use stop-losses as a strategy or not, you need to do detailed modeling with as much data as possible. And not just over two years, as entities have exploded in the past. Do as much as you can, like at least 10 years worth of Bitcoin, and assume the worst, then add a buffer element below that again to manage your site size. »

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