Tag Archives: bitcoin news

Bitcoin At 7000 Undervalued Or Overvalued

Bitcoin At $7000, Undervalued Or Overvalued

Bitcoin At $7000, Undervalued Or Overvalued?

At $7,000, Bitcoin can be both undervalued or overvalued, depending on how the “intrinsic” value of the digital currency is calculated.

After testing the $6000-mark for a while, Bitcoin has staged a big comeback lately. In the last seven days, the digital currency has rallied 6.15%, trading close to the $7,000-mark. Other cryptocurrencies have rallied in sympathy—see table 1 and Table 2.

Table 1

Coin %7d

Bitcoin (BTC) 6.15%

Ethereum (ETH) 1.35

XRP 3.22

*As of 8/31/2018, at 4pm.

Source: Coinmarketcap.com

 

Table 2

Number of Cryptocurrencies That Advanced/Declined In The Top 100 Ranks Over The Last Seven Days

Cryptocurrencies Advance/Decline Number

Advance 84

Decline 16

*As of 8/31/2018, at 4pm.

Source: Coinmarketcap.com

The rally in cryptocurrencies have some experts cheering. One of them is Global Blockchain CEO, Shidan Gouran, who sees a 'hard value' at$6000. “What this means for the present is that motion is already happening. Because it costs about $6,000 to mine a Bitcoin, it couldn’t go too much lower than that. If no one sees any value in it, it will naturally only command its ‘hard value’ price of about that much. But as we can see, people clearly do see value in it. For example, the efforts to legalize a Bitcoin ETF are persisting. Further, story after story is hitting the news about big-name institutions taking steps to trade Bitcoin. While the idea of these big-time uses of Bitcoin were nothing more than a fantasy about a year ago, the signs are actually starting to emerge that it’s going to happen. So undoubtedly, this is stimulating demand to some degree.”

Clement Thibault, Senior Analyst at Investing.com, doesn’t share Gouran’s enthusiasm. "$7,000 is a level we've seen before so I don't regard it as a particularly noteworthy milestone,” says Thibault. “Psychologically, there might be something to it for speculators but the price is completely disconnected from any meaningful fundamentals. If the level was the result of an event, development, or adoption, that would be something more substantial — but at this point, we're trying to invent a narrative to explain the price action when there's nothing to explain."

What do econometric models say? My co-author of an academic paper on Bitcoin valuation, Greg Giordano, ran three econometric models — the Haye’smodel, the Wheatley model, and the Market Model (our own)—see table 3.

On the one side, the Hayes’ model and the Market Model estimate the Bitcoin’s intrinsic value to be $8,778.11 and $8,335.54 respectively. This means that at the current price level the digital currency is undervalued.

On the other side, Wheatley’s Model estimates Bitcoin’s value to be $1,080.58. This means that at the current price the digital currency is overvalued.

 

Table 3

Three Estimates Of Bitcoin’s Intrinsic Price*

Econometric Model Price Estimate

Hayes $8,778.11

Wheatley $1,080.58

Market Model $8,335.54

 

 

Panos Mourdoukoutas

Contributor

 

Alan Zibluk Markethive Founding Member

Bitcoin BTC Price Watch- Bulls Defend Uptrend Line Aiming Higher

Bitcoin (BTC) Price Watch-  Bulls Defend Uptrend Line, Aiming Higher

Bitcoin (BTC) Price Watch- Bulls Defend Uptrend Line, Aiming Higher

 

Bitcoin Price Key Highlights

 

  • Bitcoin price pulled back to the area of interest marked previously and bounced off support.

  • Price is setting its sights back on upside targets indicated using the Fibonacci extension tool.

  • Technical indicators are giving mixed signals in terms of direction, but bearish pressure appears to be fading.

Bitcoin price is resuming its climb after testing the rising trend line connecting the lows since mid-August.

Technical Indicators Signals

The 100 SMA is still below the longer-term 200 SMA on the 4-hour time frame to indicate that the path of least resistance is to the downside. In other words, there’s still a chance for the selloff to resume at this point.

However, the gap between the moving averages is narrowing to indicate slowing selling pressure. The 200 SMA, which lines up with the trend line, also held as dynamic support and could continue to do so moving forward.

In that case, bitcoin price could aim for the 38.2% extension at the swing high next or the 50% extension just past the $7,200 major psychological resistance. Stronger bullish momentum could bring it up to the 61.8% extension at $7,315 or the 78.6% extension at $7,457.70. The full extension is just above the $7,600 mark.

RSI is on the move up so bitcoin price could follow suit while buyers have the upper hand. This oscillator has some room to climb before hitting overbought levels, which means that buyers could stay in the game for a bit longer.

Meanwhile, stochastic just pulled up from the oversold area to indicate a return in bullish pressure. This has more room to head north, also suggesting that the bounce could be sustained.

A bit of month-end profit-taking flows could be seen so be mindful of any sharp dips as traders try to book profits off recent positions. In the meantime, traders still seem optimistic that the SEC could have a more positive decision in the pending bitcoin ETF applications.

 

 

 

SARAH JENN | AUGUST 31, 2018 | 4:32 AM

Alan Zibluk Markethive Founding Member

Bitcoin BTC Price Watch – Waiting for a Triangle Breakout

Bitcoin (BTC) Price Watch - Waiting for a Triangle Breakout

Bitcoin (BTC) Price Watch – Waiting for a Triangle Breakout

Bitcoin Price Key Highlights

  • Bitcoin price has formed higher lows and found resistance around $6,500 to create an ascending triangle pattern on its 1-hour chart.

  • Price is currently testing the resistance and is nearing the peak of the formation, so a breakout might be due soon.

  • Technical indicators are giving mixed signals on which direction the breakout might take.

Bitcoin price is consolidating inside an ascending triangle pattern and might be due for a breakout in either direction soon.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. This suggests that an upside break is more likely to occur than a break lower. Also, the moving averages are near the triangle bottom to add to its strength as a floor around $6,400.

RSI is heading lower to signal that selling pressure is in play and that resistance would likely hold for now. Stochastic is also in the overbought region and turning lower suggests a pickup in bearish momentum. The chart pattern is around $600 in height so the resulting rally or selloff after a breakout could be of the same size.

 

Market Factors

Bulls continue to defend long-term support levels for bitcoin, so there’s a strong chance that the floor won’t be giving way anytime soon. Buyers now have another attempt to spur a larger rebound, possibly one that could last longer on a break of nearby resistance levels.

The anticipation for the SEC decision on the bitcoin ETF applications put on hold is building up as the end of the month nears and September approaches. However, a denial could still lead to another round of losses for bitcoin and its peers while approval might see sustained gains.

Other factors pushing bitcoin around include trade-related updates and potential contagion coming from Turkey, so price could stay sensitive to headlines from here.

 

SARAH JENN | AUGUST 20, 2018 | 4:38 AM

Alan Zibluk Markethive Founding Member