Bitcoin Network Fundamentals Could Sustain $265,000 Price, CryptoQuant CEO Explains
08 Mayo 2024 - 9:00PM
NEWSBTC
The CEO of analytics firm CryptoQuant has explained how the Bitcoin
network fundamentals could support a market cap three times the
current size. Bitcoin Hashrate/Market Cap Ratio Could Reveal
Ceiling For Cycle In a new post on X, CryptoQuant founder and CEO
Ki Young Ju has talked about what the network fundamentals could
reveal about how much more market cap Bitcoin can sustain. Related
Reading: Cardano Offering Better Buying Window Than Other Top
Coins, Santiment Reveals BTC is a cryptocurrency that runs on the
proof-of-work (PoW) consensus mechanism, meaning that validators
called miners compete with each other using computing power to get
the chance to add the next block to the blockchain. Miners have to
pay constant electricity costs to run this computing power.
Generally, these chain validators do so by selling their block
rewards. These rewards are fixed in BTC value and given out at a
more or less constant rate, so the main variable in miner finances
is the asset’s USD value. Mining-related economics are very much
related to the cryptocurrency’s price. A metric central to the
miners is the Hashrate, a measure of the computing power this
cohort has connected to the Bitcoin blockchain. Below is a chart
that shows the trend in the 7-day average value of this BTC
indicator over the past year. The value of the metric seems to have
been going down in recent days | Source: Blockchain.com As the
graph shows, the Bitcoin Hashrate has been riding an uptrend during
this period, largely due to the rally that the asset’s price has
enjoyed in this window. To relate this fundamental metric with the
price of the asset, the CryptoQuant CEO has referred to the
“Hashrate/Market Cap Ratio,” which is an indicator that keeps track
of how the market cap (that is, the total valuation) of the
cryptocurrency compares against its Hashrate. Here is the chart
shared by Ju that shows the trend in this metric over the last few
years: Looks like the value of the metric has been at relatively
low levels recently | Source: @ki_young_ju on X The graph shows
that the Bitcoin Hashrate/Market Cap Ratio has been at low levels
compared to the highs the metric achieved during the 2021 bull run.
This is despite the fact that the asset’s price is currently at
similar levels to back then. The reason behind this trend is that
the network’s Hashrate is now more than three times what it was
then. Related Reading: PEPE Whales Move $21 Million Worth Of Coins
– Here Are The Destinations If the ratio’s high from the previous
cycle top is where the cycle peak will also be observed this time
around, then it means that the asset’s market cap could increase
over three times from its current value. Based on this, Ju suggests
that the current network fundamentals could potentially sustain a
price of $265,000. BTC Price At the time of writing, Bitcoin is
trading at around $62,300, up more than 9% over the past week. The
price of the coin appears to have registered a drawdown over the
last few days | Source: BTCUSD on TradingView Featured image from
Kanchanara on Unsplash.com, CryptoQuant.com, Blockchain.com, chart
from TradingView.com
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