- Bitwise experts have published their weekly crypto market report.
- They pointed to improving sentiment, as well as Bitcoin's undervaluation relative to tech companies.
- Also, according to the report, the market shows signs of a recovery in activity.
Following the statement by US President Donald Trump about a deal with Iran, the crypto market in general and Bitcoin in particular posted gains. In their report, Bitwise Investments experts noted the asset's undervaluation relative to the semiconductor and AI sectors, and also pointed to a shift in investor sentiment.
As a reminder, Bitcoin broke through the $66,000 level amid the de-escalation of the conflict and, as a result, the reduction of global uncertainty. At the time of writing, the asset is trading at $66,626.
The news served as a catalyst for the growth of not only the crypto market but also the stock market. In particular, the S&P 500 index rose by 1.6% over the past 24 hours. WTI crude oil futures fell by nearly 3%, Brent by 2.6%.
In effect, there was a recovery of high-risk markets, including cryptocurrency, against the backdrop of a decline in hedge assets such as gold, and in the energy sector due to inflated prices in the latter.
Despite this, Bitcoin remains undervalued, the experts believe. They use a metric known as the Mayer Multiple. The indicator tracks the deviation of the current market price from the 200-day moving average (200DMA).
A value below 1 points to an accumulation zone, above 2.4 to a bubble zone. The report shows that Bitcoin has once again dropped below this threshold. NVIDIA shares, in turn, are trading at a premium relative to the 200DMA.
At the same time, as the experts stated, the SpaceX IPO, as well as the upcoming listings of Anthropic and OpenAI, could put additional pressure on the markets, including cryptocurrency. The report indicates that these three public offerings will "drain" roughly up to $200 billion in liquidity.
The company also noted the upcoming Federal Reserve meeting on interest rates. Bitwise agreed with the forecast of most experts, pointing to a high probability that rates will be kept within the current range.
Market Sentiment Is Shifting
While bearish sentiment prevailed last week, at the start of this week it shifted toward a bullish stance, the report says.
"Our internal “Crypto Asset Sentiment Index” has recovered to a neutral level after a negative spike in the middle of last week. At present, 10 of 15 indicators remain above their short-term trend," the organization emphasized.
The company noted the rise of several indicators pointing to this. These are: Bitcoin's one-month implied volatility, the funding rate, and inflows to exchanges. The fact that these indicators have turned positive signals a renewal of investor speculation, as well as growing interest in leverage and derivatives, Bitwise believes.
Notably, sentiment in the stock market toward high-risk positions remained largely unchanged.
Outlook
Long-term Bitcoin holders (LTH) continue to hold their positions, not reacting to the correction, the company stated. Their supply reached an all-time high of 14.9 million BTC. The main wave of capitulation came from new investors, while these traders continue to hold their assets.
Analysts point to the $53,500-$62,000 range as the likely zone for the formation of a local bottom — that is where the realized price and the 200-week moving average lie, which have historically coincided with the lows of bear cycles.
For the uptrend to resume, the market needs to return above the $73,100-$77,000 levels — the average purchase prices of short-term and active investors, respectively.
Source: Incrypted
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