Despite the recent Bitcoin price setback (BTC) that tension some, the Trader Scott Melker considers that «Bitcoin is not in a bubble.» That is why the specialist still sees space to follow his climb.
A bubble in the market is when the prices of an asset rise excessively and speculatively over the real foundations, so then its price falls abruptly.
Now, How to know if Bitcoin is in a bubble? To do this, Melker evaluates in a report different aspects that suggest that this is not what is happening in the market.
To begin with, it emphasizes that different technical indicators show that Bitcoin is not at overvalued levels. Among them, it distinguishes the MVRV indicator and the stock-to-flow model.
The MVRV indicator compares the BTC market value with its value performed, helping to identify whether it is overvalued or undervalued. The Stock-To-Flow model measures Bitcoin’s scarcity, dividing its total supply by the amount produced annually to foresee its future price.
«Things paint well,» Melker points out about the behavior of these indicators, which can be observed below. He emphasizes that «none of these graphics seems worrying.»
«This tells me one of two things: or our existing models are broken, which I don’t think, or we are simply not in bubble territory.»
Scott Melker, cryptocurrency investor.
«There is no excess foam in Bitcoin,» he insists
Melker stands out in addition that, beyond the technical indicators, Bitcoin has not shown great impulse due to Donald Trump’s government movements In favor of the market. This reinforces his idea that he is not in a bubble, but is acting calmly, which catalogs optimistic.
Trump ordered, among other issues, the creation of a presidential team dedicated to digital assets that will evaluate its inclusion in the National Reserve. In addition, as Cryptonoticias reported, a Senate team was formed that considers urgent to discuss the formation of a strategic Bitcoin (SBR).
«If Bitcoin had risen to USD 150,000 or USD 200,000 with executive order news, it would be preaching caution, especially because we are still in the research phase of an SBR or reserve of digital assets,» says Melker.
But, as that did not happen, The only real risk you see is for those who remain subexposed to this kind of assets. «Investing in this space is difficult, especially at this time, but the good news is that we are not even close to the foam,» he adds from his perspective.
«There is no excess foam in Bitcoin at this time (if not he cannot fall),» says Melker. And consider that the Altcoins are even further from it, since they have not had great bullish volatility.
He also adds that there is still no general consensus that Bitcoin’s success is inevitable these days, which reflects positive signs. Otherwise, the market could be in a situation of Fomo (fear of losing an opportunity) that leads to a bubble.
These comments take place while BTC remains contributing around USD 96,000, 12% below the historical maximum that touched Trump’s presidential assumption day. With this, as seen below, it continues within the consolidation range that has been more than two months ago.
«The market can be bored at this time, but it is often the perfect configuration for an important movement,» says Melker. He maintains that, whether there is an upward reaction or the short -term loss, The long -term trend is clear: «We are much higher.»