Bitcoin News – Bitcoin Price Analysis: Why Experts Believe It’s Time to Buy

Bitcoin News – Bitcoin ETF Outflows: What It Means for Future Price Movements

Bitcoin News – Bitcoin has recently exhibited signs of undervaluation relative to its network fundamentals, presenting potential buying opportunities for investors, according to analysts. Illia Otychenko, lead analyst at CEX.IO, noted a significant 39% surge in active Bitcoin addresses over the past week, indicating a rise in demand and liquidity.

Network Value to Metcalfe Ratio Decline Indicates Potential Undervaluation

Otychenko highlighted a sharp drop in Bitcoin’s Network Value to Metcalfe Ratio (NVM), a metric that measures the relationship between Bitcoin’s market value and the activity on its network. Currently, the NVM is at levels not seen since its all-time high, suggesting that the cryptocurrency might be trading below its intrinsic value. “Historically, when active addresses surge like this, it often precedes or accompanies price increases,” Otychenko stated.

Historical Context of NVM as a Reliable Indicator

The NVM metric has proven to be a reliable indicator in previous market cycles. For example, similar drops in NVM in late 2022 and September 2023 preceded recoveries in Bitcoin’s price. Currently, Bitcoin is trading down 0.6% at $62,120, and is struggling to maintain levels above critical technical indicators, remaining caught between the 200-day simple moving average (SMA) and the 50-day SMA.

Breakout Strategy and Volume Considerations

For Bitcoin to break out of this consolidation phase, it needs to surpass the 200-day SMA with higher trading volume. Otychenko emphasized that “Bitcoin needs to push above the 200-day SMA and sustain those levels to see further upward momentum.” However, recent gains have occurred alongside decreasing volume, which suggests a lack of strong bullish momentum.

Bitcoin’s Evolving Narrative in Investment Portfolios

Analysts, including Brian Dixon, CEO of OTC Capital, are rethinking Bitcoin’s traditional role as a purely risk-on asset. Recent analyses, particularly from major financial institutions like BlackRock, are challenging the perception of Bitcoin solely as a risk asset. Dixon pointed out that Bitcoin is increasingly behaving like gold during economic downturns, suggesting it could serve as a risk-differentiated or even risk-off asset.

This evolving narrative may redefine Bitcoin’s role in investment portfolios, potentially making it a more attractive option for long-term diversification. “Bitcoin might offer protection against market volatility in ways that traditional assets might not,” Dixon noted.

Institutional Flows and ETF Performance

In terms of institutional flows, Bitcoin ETFs have shown mixed results. On Tuesday, the total net outflow from Bitcoin spot ETFs reached $18.6 million, with the Fidelity Bitcoin ETF (FBTC) leading the outflows at $48.8 million. Conversely, the BlackRock ETF (IBIT) saw an inflow of $39.5 million on the same day. Spot ETFs tracking Ethereum also experienced a total net outflow of $8.1 million from spot ETFs on October 8.

Upcoming Economic Data as Potential Price Triggers

As of now, Bitcoin is trading at $62,050, down 0.6%, while Ether remains stable at $2,432. The immediate price action for Bitcoin hinges on upcoming macroeconomic data. Alex Kuptsikevich, senior market analyst at FxPro, pointed out that the Federal Reserve’s meeting minutes and the forthcoming Consumer Price Index (CPI) inflation data could serve as catalysts for Bitcoin’s next move. “Potential triggers to break out of this range could be Fed minutes or U.S. inflation data if they lead to a reassessment of expectations in traditional markets,” Kuptsikevich noted.

In summary, Bitcoin’s current market conditions, characterized by increasing active addresses and a declining NVM, suggest an environment ripe for potential growth, provided it can break through critical resistance levels with sufficient trading volume.

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