Bitcoin and the overall cryptocurrency market have experienced a tremendous run-up over the past 45 days since the start of July 2022.
In a series of tweets on Friday, Jurrien Timmer, director of Global Macro, in the global asset allocation section of Fidelity Investments, discussed his analysis of the Bitcoin and Ether prices.
Timmer explained the low price of Bitcoin and asserted that the price per million non-zero addresses, which is how the value of Bitcoin is calculated, shows that valuation has returned to 2013 levels, despite the price having only reached 2020 levels. This is shown in the chart below.
Valuation vs. Price
He further explained that even at its recent low of $17,600, Bitcoin is now lower in comparison to his more conservative S-curve model, which is based on the Internet adoption curve.
The adoption curve for Bitcoin is clearly following the more asymptotic Internet adoption curve rather than the more exponential mobile phone curve, according to Timmer’s analysis of the network’s expansion. However, according to Metcalfe’s Law, slower network growth indicates a more moderate price increase.
However, according to the director, “based on a simple power regression line, Bitcoin’s network appears to be intact.” The value of Bitcoin is declining as a result of the network’s ongoing expansion and falling pricing.
Ether Nearing Bottom?
The Global Macro director of Fidelity also tweeted about his expectations for the Ether price.
How Do Bitcoin and Gold Correlate?
Timmer dug into the Bitcoin and Gold correlation to understand the market sentiments of the cryptocurrency in the bearish phase. The head of Fidelity explains that it would be crucial to look at the Bitcoin/Gold ratio if Bitcoin and Gold were to be put side by side. He continued by saying that the most oversold conditions in recent years were created by the most recent sell-off.
At the time of writing, Bitcoin is at $21,584 up 11% over the last seven days but down by 29% over the previous 30.
Meanwhile, Ether is at $1,217, up 14% in the previous week but down by 32% in the last 30.