Coronavirus continues to take a heavy toll across asset classes, including cryptocurrencies. Many European countries have closed their borders and encouraged their citizens to quarantine as the outbreak begins to take its toll on the continent.

Correlations between stock markets and Bitcoin reached new highs last week although it seems to have de-coupled somewhat in recent days.

The 90-day correlation between the S&P 500 and BTC reached a high of 0.58 on March 14th as a market-wide sell off depressed asset prices. “Black Thursday” also saw liquidations force BTC as low as the $3,850, with the crypto-asset experiencing its second largest drop in a single day. Ether saw its worst daily performance since inception.

As a result of falling prices, inflows into exchanges increased substantially as traders/investors went short or sold off their crypto-assets for cash. Because of the sharp moves in the market, the Ethereum network became congested and had an adverse effect on DeFi player such as MakerDAO. The average gas price increased by a factor of 10 and this is bourne our by the table above, which shows an almost 50% jump in average fees on the Ethereum network.

On Sunday, the US Federal Reserve cut interest rates by 100 basis points and introduced a $700 billion package to buy treasuries and mortgage securities, which should be a positive, long-term fundamental for bitcoin given its rules-based, algorithmic monetary policy.

Fundamentals: Bitcoin

A summary of key metrics for bitcoin.

Mayer Multiple = 0.61

The Mayer Multiple has historically been higher than today’s value 89.72 percent of the time.

The Mayer Multiple has decreased from 0.91 last week to 0.61.

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 = 0.90056

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).

The MVRV ratio has continued downwards and has breached the important 1.0000 level — historically a buy signal. The MVRV ratio moved below 1 for the first time since March 2019 on March 12th as bitcoin fell more than $3,000.

Network Value to Transactions Signal (NVTS) = 47.89548

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 NVTS continues downward this week, suggesting BTC-USD is still overvalued when comparing the network value and daily transaction value. We’d want to see a test of the 38 level for a strong buy signal.

Days until next halving = 55

The highly anticipated block reward halving for bitcoin is estimated to occur during May 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 = $4,935.43 (based on Daily Active Addresses)

(based on Daily Active Addresses) Metcalfe’s Law Fair value of Bitcoin = $6,167.10 (based on Transaction Value)

(Source: TradingView)

Technicals

The recent price action for bitcoin and ether.

Bitcoin and Ether Snapshot