en.bitcoinsistemi.com
As declines in the leading cryptocurrency Bitcoin deepened, the price fell below $70,000 for the first time in almost 15 months since November 2024.
Bitcoin ($BTC) is erasing all the gains it made since the November 2024 US presidential election, and it is predicted that Bitcoin is in a bear market and the decline will continue.
However, one analyst argues that Bitcoin is trading at a discount of over 40% compared to its long-term historical trend value.
An analyst named David used a power law valuation model to determine Bitcoin’s fair value to be $122,762.
Based on the current price level, this represents a difference of approximately $53,000, or 70%.
The analyst argued that the current price declines are due more to forced flows in derivatives markets, such as hedging and liquidation-related sales, rather than long-term investors selling $BTC.
One of the metrics highlighted by the analyst was Bitcoin’s z-score. This data measures how much the current price has deviated from the long-term trend, and the analyst stated that its current value is -0.76. This indicates that the price has diverged from the long-term trend and fallen well below it.
The analyst concluded by highlighting the high volatility, noting that the 20-day implied volatility was above 43, and the total open interest in futures and options exceeded $2.3 billion.
Under these conditions, the analyst estimated a 70% probability of a squeeze if the Bitcoin price starts to rise, noting that positions could change very quickly. He also added that a sharp reversal in Bitcoin could occur at this point.
*This is not investment advice.