Four Key Bitcoin Metrics Indicate $80K BTC Price is a Bargain

The price of Bitcoin (BTC) recently fell from $87,241 to $81,331 between March 28 and March 31, wiping out gains made over the prior 17 days. This 6.8% drop resulted in the liquidation of $230 million in bullish BTC futures positions and was largely in response to the downward trend in the US stock market, where the S&P 500 futures hit their lowest point since March 14.

Even though Bitcoin struggled to stay above $82,000 on March 31, four significant indicators suggest robust investor confidence and potential signs of Bitcoin breaking away from traditional market correlations in the near future.

S&P 500 index futures (left) compared to Bitcoin/USD (right). Source: TradingView

Traders are concerned about how the ongoing global trade war could impact economic growth, particularly after the announcement on March 26 regarding a 25% US tariff on imported vehicles. Reports from Yahoo News indicate that Goldman Sachs strategists have revised their year-end S&P 500 target down from 6,200 to 5,700. Likewise, Barclays analysts have also decreased their forecast from 6,600 to 5,900.

Despite these challenges in traditional markets, gold saw a significant rise, hitting a record high above $3,100 on March 31. This shows that gold, valued at $21 trillion, is perceived as a safe haven, especially as traders seek alternatives to cash. Concurrently, the US dollar weakened against various currencies, with the DXY index falling from 107.60 in February to 104.10.

Bitcoin Metrics Indicate Resilience from Long-term Investors

Despite some questioning of Bitcoin's narrative as "digital gold" and an "uncorrelated asset," it has achieved a 36% increase over the last six months, while the S&P 500 index has experienced a decline of 3.5% during the same timeframe. Notable Bitcoin metrics indicate that long-term investors are not overly concerned about this temporary correlation, especially as central banks shift towards more expansionary policies to avert an economic crisis.

One such indicator is Bitcoin's mining hashrate, which reflects the computational power securing the network's block validation. It reached an all-time high of 856.2 million terahashes per second on March 28, rising from 798.8 million in February, showcasing the strength and stability of the network.

Bitcoin mining estimated 7-day average hashrate, TH/s. Source: Blockchain.com

There are no signs of panic selling from miners, which is evident in the flow of known entities to exchanges. Historically, BTC price drops were associated with fear of a “death spiral,” where unprofitable miners were forced to sell. Moreover, on March 30, the 7-day average of net transfers from miners to exchanges stood at BTC 125, significantly less than the 450 BTC mined daily, according to data from Glassnode.

Bitcoin 7-day average net transfer volume from/to miners, BTC. Source: Glassnode

Additionally, Bitcoin miner MARA Holdings filed a prospectus on March 28 to issue up to $2 billion in stocks as part of efforts to increase its BTC reserves and for general corporate purposes. This follows GameStop (GME), which filed a $1.3 billion convertible debt offering on March 26 to diversify its investment strategy to include Bitcoin and stablecoin assets.

Decline in Cryptocurrency Exchange Reserves

As of March 30, cryptocurrency exchanges' reserves hit a six-year low, dropping to just 2.64 million BTC, according to Glassnode data. Such a decrease typically signifies that investors prefer to hold onto their assets, a noteworthy trend given Bitcoin's 5.1% decline over the previous week.

Lastly, near-zero net outflows recorded in US spot Bitcoin exchange-traded funds (ETFs) between March 27 and March 28 further indicate unwavering confidence among institutional investors.

To summarize, the combination of a record-high mining hashrate, increasing corporate adoption, and six-year low exchange reserves signals that Bitcoin investors are maintaining their confidence, portraying the current price of around $80K as a potential bargain for future gains.

Bitcoin, Investors, Markets, Gold, Hashrate