Crypto Analyst Says Bitcoin Is Undervalued Despite On-Chain Data, Is An Uptick Ahead?

A digital asset analyst has pointed to bullish Bitcoin (BTC) on-chain metrics amid recent market uncertainty. Huge institutional inflows coupled with a drop in exchange reserves show that Bitcoin’s price holds greater value when compared to previous cycles. The asset’s profit supply and projected growth also point upwards, with bulls hinting at new targets. 

Exchange Outflows Fuel Bull Momentum

After the crypto market recovery, Bitcoin bulls have stretched exchange withdrawals pushing up trader confidence. A digital asset expert Boris Vest noted that exchange reserves have plummeted to 2018 levels showing positions of long-term holdings. At the moment, about 2.43 million BTC are held on exchanges with older assets of seven days being moved to other custodians.

In the 2021 bull cycle, BTC exchange reserves stood at 3.4 million assets. The wide reduction in present figures points to an undervalued asset in light of recent headwinds. According to Vest, the decrease in supply correlates with a potential price jump. Crypto whales have also accumulated huge amounts of assets and transferred the same out of exchanges. 

Furthermore, the stablecoin supply ratio at 14.3 shows the growing capital available to purchase more assets. In the event of a price drop, the SSR still points upwards and hasn’t tapped the 2021 bull cycle levels, suggesting the top crypto is still undervalued.

“The funding rate had significantly increased alongside a momentum-driven price rise. This indicated that long positions on Bitcoin had become overly inflated and that buying pressure was too high—presenting a good selling opportunity for market makers. Following the ATH, funding rates saw a pullback and are now quite low, around 0.01–0.00. If this rate turns negative, it would signal an increase in short positions and potential upward price pressure.”

Is An Uptick Ahead?

At press time, Bitcoin trades at $83,783, sliding 0.5% today although weekly gains are over 9%. Several factors have led to traders raising the odds for an uphill drive this quarter. A rebound in institutional demand tops trader’s list backed up by previous projections. 

Digital asset analytics firm CryptoQuant wrote that Bitcoin’s supply in profit above 70% places the price range in a stable position. However, the next target for long-term holders is the 80% range already marking heightened bullish momentum. This week’s inflows to spot Bitcoin ETFs and other products favors sentiments for an uphill push.