Bitcoin experienced its second largest difficulty adjustment after the drop in hash rate on ‘Black Thursday’ (March 12th) with a decline in difficulty of 16%. As the hash rate has been dropping inefficient miners have been cleared off of the network, known as miner capitulation.

The upcoming block reward halving (which is 43 days away) will increase the average cost of production for a single bitcoin to the range of $10,000 to $15,000, leaving only the most efficient miners standing and purging even more miners from the network.

BTC and the wider cryptocurrency market has recovered from the lows of March 12th-13th, but the correlation between BTC and the S&P500 remains elevated.

The table above shows the fundamental metrics for the top 5 crypto-assets. The average fees across BTC, ETH and XRP fell week-on-week while BCH and BSV experienced an increase in the mean transaction fees. BCH’s fees have shot up over 500% as compared to last week, despite a 63% drop in the number of transfers.

Active addresses grew for BTC and BSV, while they dropped for the rest of the top 5. The 7-day average number of active addresses for BTC has rebounded from the lows seen on March 25th. While for ETH and XRP, the 7-day average is falling or remains about the same as last week.

For the number of transfers, only ETH showed positive growth this week. However, ETH’s 7-day moving average of the number of transfers has fallen from the 2020 highs realised during mid-March. For BTC, this metric has fallen to the lowest level since March 2019 but looks to be reversing and heading higher.

For the 7-day total transfer value in USD, all of the top 5 crypto-assets have seen a decline in this metric over the past month as the number of transactions and prices have fallen.

Fundamentals: Bitcoin

A summary of key metrics for bitcoin.

Mayer Multiple = 0.78

The Mayer Multiple has historically been higher than today’s value 78.53 percent of the time.

The Mayer Multiple has remained the same as last week at 0.78.

Typically, tops in the price of bitcoin are indicated when the Mayer Multiple exceeds 2.4 (shown on the chart).

The average value over Bitcoin’s trading history is 1.37.

Market Value to Realised Value (MVRV) ratio = 1.16112

The MVRV ratio indicates that the market is likely to be overvalued when it exceeds 3.7. On the other hand, the market is suggested to be undervalued if the ratio is less than 1 (shown on the chart).

After falling below the key threshold level at 1.0000, the MVRV ratio has recovered and moved back above this important level — which has historically provided a buy signal. The MVRV ratio has hardly changed from last week.

Network Value to Transactions Signal (NVTS) = 60.24820

A high NTVS (above 72) indicates that the network value is over-valued in relation to the daily transaction value on the Bitcoin network and identifies tops in the market.

Conversely, a low NVTS (below 38), suggests that bitcoin is under-valued in relation to the daily transaction value andidentifies bottoms in the market.

The downtrend in the NVTS indicator has reversed this week moving away from the recent low of 47.89548 on March 16th.

Days until next halving = 43

The highly anticipated block reward halving for bitcoin is estimated to occur during May 13, 2020. The market has typically responded positively, reaching new all-time highs 10–20 months following previous halving events in 2016 and 2012.

You can find a countdown here.

Metcalfe’s Law Fair value of Bitcoin = $5,133.52 (based on Daily Active Addresses)

(based on Daily Active Addresses) Metcalfe’s Law Fair value of Bitcoin = $5,899.65 (based on Transaction Value)

(Source: TradingView)

Technicals

The recent price action for bitcoin and ether.

Bitcoin and Ether Snapshot