Bitcoin breaks $71k: Should you cash in today or HODL?
What is the current trading price of Bitcoin and what resistance level is it facing?
The current trading price of Bitcoin is $71.1k, and it is facing resistance at the $71.4k zone.
Can you explain the significance of the Thermo Cap ratio in assessing Bitcoin's market valuation?
The Thermo Cap ratio is a significant metric in assessing Bitcoin's market valuation as it provides insights into the relationship between the market capitalization of Bitcoin and the total investment cost into the network. The Thermo Cap metric represents the cumulative value of all the Bitcoin mined thus far, showing the total investment into the network. By dividing the market capitalization of Bitcoin by the Thermo Cap, the Thermo Cap ratio offers a perspective on whether Bitcoin is trading at a premium or discount relative to the amount spent by miners6.
A rising Thermo Cap ratio indicates that the market capitalization is growing at a faster pace than the total investment cost, suggesting that Bitcoin may be undervalued. Conversely, a declining Thermo Cap ratio implies that the total investment cost is increasing faster than the market capitalization, indicating that Bitcoin may be overvalued.
In the context of the news article, the Thermo Cap ratio has been steadily trending higher in the past eight months, suggesting that the current Bitcoin prices might not be at the end of the bull run. This information can be useful for investors as they consider whether to hold onto their Bitcoin or take profits.
How has the Thermo Cap metric contributed to the understanding of Bitcoin's network fundamentals?
The Thermo Cap metric has significantly contributed to the understanding of Bitcoin's network fundamentals by providing a unique perspective on the cumulative investment in the network. It represents the total value of Bitcoin mined to date, which is a strong indicator of the overall investment cost into the network. The Thermo Cap ratio, which is derived by dividing Bitcoin's market capitalization by the Thermo Cap, has been on a consistent upward trend over the past eight months1. This ongoing trend suggests that the current phase might still have further potential, indicating that the bullish run might not be over yet1.
By analyzing the Thermo Cap metric, investors and analysts can gain insights into the strength and resilience of Bitcoin's network, as well as assess its current valuation and potential future trajectory. This metric negates any notions of overvaluation and supports the argument that Bitcoin's market status is underpinned by strong network metrics. As a result, the Thermo Cap metric has become an essential tool for understanding Bitcoin's network fundamentals and making informed investment decisions.