Bitcoin is exchanging hands above $10,000, but the Energy Value indicator suggests price is overvalued and another dip is very likely
Bitcoin’s Energy Value indicator screaming “overvalued”
The Energy Value indicator shows that Bitcoin’s last bull market was preceded by a correction that came after the values of this indicator also dipped. The same scenario is probable at the moment as conditions are similar, some say.
The last time Bitcoin hit a major correction before the 2017 bull run, the Energy Value indicator signalled the top cryptocurrency was tremendously overpriced.
Now the signal is back, and as argued by Charles Edwards, Bitcoin is overvalued in the same way for the first time since September 2019.
Bitcoin overvalued for first time since September 2019 per Energy Value.
Good news?
When EV bottoms and trends up, it is often a BIG up trend. Particularly after halving.
We are already getting signs of daily EV greater than price. If this continues, expect fast recovery. pic.twitter.com/lEU0n8knmM
— Charles Edwards (@caprioleio) June 1, 2020
Ordinarily, the signal signifies that a bearish trend is on the cards, but when the Energy Value bottoms post halving, its upside coincides with a spike in Bitcoin price. The uptrend has historically continued until the indicator and the leading cryptocurrency’s price top out.
According to Charles Edwards, from Digital asset management firm, Capriole, the EV is set to bottom, but an uptrend “is often a BIG” one. The analyst points out that although the asset is overvalued, uptrends following halvings have in the past come with quick price recoveries.
As per the Energy Value signal, Bitcoin’s price might yet experience a post-halving crash. The EV is bottoming and the price might have to
