Similar setup on the first cryptocurrency’s chart caused a run to $69,000
As Bitcoin continues to trade in the notorious $45,000-$39,000 range, the market faced a new on-chain volume high. The range from $38,000 to $39,000 reached the highest level of chain volume at any price since $3,400 for the first cryptocurrency, and here’s why it matters.
Concept of fair value
Throughout the trading history of the first cryptocurrency, many analysts and experts have discussed what the “fair price” is for “digital gold.” Because of its volatile nature, it was close to impossible to determine at which value traders consider BTC “fair.”
With on-chain volume reaching an all-time high at around $39,000, we can assume that most of the market, including traders and long-term and institutional investors, consider the fairest price for Bitcoin.
Why does fair value change?
The main reason for the constant change in the fair value of assets like Bitcoin is the immaturity of the asset compared to commodities like gold or currencies like the United States Dollar.
Besides an ever-changing fair value, the volatility of Bitcoin is also an important factor, which becomes a subject of change during market development. Bitcoin’s average volatility has already decreased significantly compared to previous years.
The “old fair value” for the cryptocurrency, or the previous point of on-chain volume concentration, was $3,432, with 5.2% of total Bitcoin supply moved there, which was considered fair value before the bullrun to $69,000.
Following the market retracement in 2017, Bitcoin actually reached $3,400, which was the long-term reversal point that took digital gold to new highs in 2021.
