While the price of bitcoin has been surging exponentially so far this year and the cryptocurrency is now trading at a new all-time high above $39,300, an indicator suggests that its price is not overvalued and could be ready for another “explosive move upwards.”
According to the latest weekly report from Stack Funds, first spotted by Cointelegraph, the Bitcoin network’s value to transaction (NVT) ratio remains firmly bullish, despite bitcoin’s gains of well over 30% so far this year.
Per Stack’s analysts, the NVT indicator isn’t signaling the market is overvalued and due for a correction, but is instead reminiscent of the start of a bull run. The report adds it is now trading at the 70 handle and is roughly in the middle of its range. This, it says, suggests bitcoin is “not in the overvalued territory despite the recent price rally.”
The report adds:
If anything, a potential spike in the NVT ratio could mean that Bitcoin is ready for yet another explosive move upwards.
It also shows that the current divergence in NVT with the cryptocurrency’s price is similar to those of periods that preceded upward price movements both in 2017 and 2019. The analysts also pointed to the contrast between the bullish crypto markets and equities markets, which have been failing to firmly surpass their all-time highs this year.
As reported, the Head of Growth at cryptocurrency exchange Kraken, Dan Held, has revealed he believes the price of BTC is set to go much higher in the next couple of years, while well-known bitcoin bull Max Keiser predicted the price of the cryptocurrency will hit $220,000 this year.
These price predictions are based on growing demand from corporations and institutional investors, at a time in which even PayPal is letting its users buy, sell, and hold crypto on its platform. Indeed, record outflows from popular cryptocurrency exchange Coinbase suggest institutions have kept on buying BTC even as the price went above $30,000.
Outflows from the professional trading platform Coinbase Pro, have hit a new all-time high on January 2, with 55,000 BTC moving out of the exchange’s wallets. At the time the coins were worth $1.7 billion, and are now worth $2.1 billion.
Earlier this week, a team of J.P. Morgan global market strategists led by Nikolaos Panigirtzoglou reportedly wrote in a note to clients that over the long term Bitcoin’s price could get to $146,000 and higher. The team added this is a long-term target, and hitting it this year would be unsustainable.
Featured image via Pixabay.