Analyst Benjamin Cowen says that the cryptocurrency market is 50% off the value it deserves. He shares his predictions for when the Bitcoin price will rise to its “fair value.”
“50% below Bitcoin real value”
The prominent crypto analyst says that Bitcoin (BTC) is largely undervalued. In a recent interview with Real Vision Crypto, he attributes the depreciation of his market to the logarithmic regression model. Sharing the chart below, Cowen says his market is currently 50% off what it deserves:
I’ve shown this chart several times before. The overall market cap for cryptocurrencies is shown in the blue line. The fair value logarithmic regression trend line is represented by the red line. The basic principle is that we bounce around the fair value of the cryptocurrency market, which is expected to grow monotonously over time. According to the data, we are currently 50% worthless compared to our fair value.
Long-term investors can see the current prices of the cryptocurrency market as an opportunity. But Cowen says there’s still a 15% chance of a drop:
But the chart also hints that key lows are typically approaching, perhaps 60% to 65% undervalue before we can effectively drive another bull market… We need a little more time before we really get out of this bear market.
Here is the date when the bulls will take the stage again
Regarding Bitcoin, Cowen estimates that it will likely take more than 14 months for the leading cryptocurrency to return to its fair value:
The price of Bitcoin has always been at its fair value when it halves. As a result, whenever there is a bear market, we fall below the fair value and the price returns to that level during the next Bitcoin halving. Therefore, I argue that this will happen so that we get back to fair value; My guess would be 2024. Early 2024 is my best guess.
Whale trading peaks as prices bottom
Both Bitcoin and Ethereum saw large transactions that took place when investors were at a huge loss. According to Santiment, Bitcoin reached the lowest loss-to-profit transaction rate in 4.5 months. Ethereum, on the other hand, recorded historical lows.
Here, investors opened large short positions, as evidenced by the funding rates. Santiment noted that liquidations tend to be common and surprise jumps can occur in such scenarios. This means that the market could be in a rebounding state.
Meanwhile, whale watching bot Whalemap flagged a transaction involving 32,000 BTC. These whales have been dormant since 2018.
cryptocoin.comAs you follow, most experts, like Benjamin Cowen, expect Bitcoin to decline in the short term. However, like Cowen, a more positive picture emerges in the long term.
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