Follow Expert Views on the Future of BTC
Bitcoin crosses $71k, leaving everyone in the space with the major question: should they cash out or HODL?
As much as BTC has been showing sound fundamentals, the fear of overvaluation still happens to be a topic of utmost concern.
Solid Network Investments in Bitcoin
New data indicates that the Bitcoin network is healthy.
CryptoQuant CEO Ki Young Ju shared a Thermo Cap ratio that tells investors Bitcoin is not overvalued on network fundamentals.
This ratio divides the Bitcoin market capitalization by the Thermo Cap. The Thermo Cap itself is the cumulative value of all mined Bitcoin, reflecting how strong the investments in the network are.
Although the Thermo Cap ratio has been rising steadily for the last eight months, it is yet to hit the previous cycle highs, signifying that the bullish trend that the coin is in might still have some room for growth.
Should Investors Lock in Profits?
The NUPL (Net Unrealized Profit/Loss) is another on-chain metric and is presently above 0.5, indicating that many investors are currently in profit.
Usually, an NUPL above 0.7 signals a cycle top. While Bitcoin hasn’t got to this level, bulls might be forced to retrace 20% from here with a rapid recovery, same as previous bull runs.
Another on-chain metric, the NVT ratio, or Network Value to Transactions, has been rising steadily of late.
Furthermore the NVT (Network Value to Transaction) ratio, which divides market capitalization by transaction volume, i.e which helps to detect whether coins are overvalued or undervalued points to a possible overvaluation.
But it also suggests that Bitcoin’s status as an inflation hedge and transaction network
Future Prospects and Market Sentiment
As Bitcoin crosses $71k, major figures like Michael Saylor are heard echoing optimism by suggesting Bitcoin as a hedge against inflation, the surging NVT could be pointing in this direction.
Therefore the rising NVT could be arguing this perspective. While there will obviously be corrections, the overall market sentiment is bullish, with strength in network fundamentals.
Conclusion:
With Bitcoin`s robust investment metrics and an impeccable historical performance; ergo, the decision to cash out or HODL should be predicated on the risk appetite of the investor.
Those who shy away from potential corrections might want to book some profits, while long-term believers in Bitcoin’s value proposition might find themselves HODLing through thick and thin.
