Bitcoin Caught in a Downtrend, But a ‘Trifecta of Positives’ Screams ‘Deep Value’

$20,000 is no longer support.

$100,000 didn’t happen.

Bitcoin halving is 562 days gone.

Bjørner simply refuses to let go of his grip on the market, and the Federal Reserve’s policy of interest rate increases and quantitative tightening adds fuel to the fire.

Despite these challenges, in a 15 Sept Twitter Space hosted by CointelegraphCapriole Fund founder Charles Edwards explained why he remains bullish on Bitcoin.

Edwards said that several on-chain metrics suggest that BTC is undervalued:

“I see incredibly deep value and I call it a trifecta and that we have three positive things happening in my mind. One is cycle timing, where between years two and three, which historically has been where all the Bitcoin cycles are the bottom. The other is that we’ve hit 90% of normal draws. Now of course all of these things can go lower, but that alone is quite a value signal. And then third, just the readings across pretty much every metric on the chain, either it’s the Mayer Multiple, whether it’s the Puell Multiple, or the NVT or the dormancy, it’s all at one of the four-year level discounts. So to me, it’s kind of a once a cycle opportunity that we’re seeing at the moment.”

When asked about his thoughts on the previous Bitcoin halving and how the current economic environment could affect the next halving, Edwards said:

“I think it was successful because it positioned Bitcoin as one of the most difficult assets in the world in the midst of massive money printing. And we saw a lot of old school traditional finance, legendary investors, Druckenmiller, etc. get into Bitcoin because of that, since it’s sort of a hedge more or less. And that kind of triggered the next 6 to 12 months of rallying. I also think the crypto industry is still running on Bitcoin’s halving cycle as sort of a time frame. For now. I don’t think they’ll go on forever, but for now, I still think it has weight and impact on how people invest in the space. With each successive halving, the incremental value of the inflationary drop for bitcoin is negligible because it’s already — barring Ethereum — now the hardest asset, or harder than gold.”

2022 has proven that risk management and building a balanced portfolio is still a skill that crypto investors are working to develop. Edwards said:

“No matter what method you are, no matter how you trade or invest, whether you use stop loss or not as a strategy. You need to do some detailed modeling over as much data as you can and not just two years of data, because that’s how entities has blown up in the past. Do as much as you can, like at least 10 years of Bitcoin, and assume the worst, then add a buffer element under that again to manage your position size.”

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