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

Bitcoin (BTC) saw a notable price decrease, dropping from $87,241 to $81,331 between March 28 and March 31. This marked a significant decline that erased the gains made over the previous 17 days. The correction of 6.8% led to the liquidation of $230 million in bullish BTC futures positions and was largely influenced by declining trends in the US stock market, where S&P 500 futures hit their lowest point since March 14.

While Bitcoin struggled to maintain a price above $82,000 on March 31, four important indicators suggest that investor confidence remains strong, indicating a potential decoupling of Bitcoin from traditional markets in the near future.

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

Traders are increasingly uneasy about the potential effects of the global trade war on economic growth, especially following the announcement on March 26 of a 25% US tariff on imported vehicles. Notably, analysts at Goldman Sachs have lowered their year-end target for the S&P 500 for the second time, changing it from 6,200 to 5,700, while Barclays analysts have adjusted their forecast from 6,600 to 5,900.

Amidst these economic concerns, gold prices surged to a record high above $3,100 on March 31. This increase in the price of gold, a $21 trillion asset often viewed as a secure investment, is especially relevant as traders look for alternatives to cash in times of uncertainty. Concurrently, the US dollar has weakened against a range of foreign currencies, with the DXY index dropping from 107.60 in February to 104.10.

Strong Bitcoin Metrics Amid Confident Long-Term Investors

Despite some skepticism regarding Bitcoin’s reputation as “digital gold” and its status as an “uncorrelated asset,” the cryptocurrency has experienced a 36% gain over the last six months, while the S&P 500 index fell approximately 3.5% during that same timeframe. Several Bitcoin metrics continue to show resilience, suggesting that long-term investors are not alarmed by short-term correlations with traditional assets as central banks adopt more expansionary strategies to stave off economic crises.

The mining hashrate of Bitcoin—indicating the computing power dedicated to the network's block validation—has recently reached an all-time high. The seven-day moving average of the hashrate peaked at 856.2 million terahashes per second on March 28, a rise from 798.8 million in February. This suggests that miners are not engaged in panic selling, as evidenced by the minimal flows of Bitcoin from known entities to exchanges.

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

In the past, downturns in Bitcoin's price were often linked to fears about a “death spiral,” where miners were compelled to sell their holdings due to unprofitability. On March 30, the 7-day average net transfers from miners to exchanges registered at 125 Bitcoin, which is significantly lower than the 450 Bitcoin typically mined daily according to data provided by Glassnode.

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

Additionally, Bitcoin mining company MARA Holdings submitted a prospectus on March 28 to raise up to $2 billion through stock sales to increase its Bitcoin reserves and for general corporate purposes. This follows a trend seen in the video game sector, where GameStop (GME) filed a $1.3 billion convertible debt offering on March 26 and updated its investment approach to include potential acquisitions of Bitcoin and stablecoins.

Declining Crypto Exchange Reserves

The reserves of cryptocurrency exchanges fell to their lowest levels in over six years as of March 30, reaching 2.64 million Bitcoin according to Glassnode. This decline in the number of available coins usually indicates a preference among investors to hold their assets, a trend that is particularly noteworthy given that Bitcoin's price decreased by 5.1% over the preceding week.

Finally, near-zero net outflows from US spot Bitcoin exchange-traded funds (ETFs) between March 27 and March 28 reflect a solid confidence among institutional investors.

In conclusion, Bitcoin investors remain upbeat due to high mining hashrate records, growing corporate adoption, and a six-year low in exchange reserves, all of which signal a trend toward long-term holding.

Bitcoin, Investors, Market, Confidence