As much as I hate to say, bitcoin and the other cryptoassets might still be overvalued at these levels. They also might be extremely undervalued though. We have no real way to know for sure.
In traditional markets, there are developed methods for understanding what an asset should be worth. As with many things in the crypto space, this is still under construction. This article from ZeroHedge does a pretty good job explaining this.
Hopefully, within the next few years, we’ll have developed a much more methodic way to understand crypto pricing. I’ve recently posted a video which introduces some of the concepts that can be used to begin. In my view, tools like the new CoinDesk Crypto Economics Explorer go a long way in helping us visualize the various factors which influence cryptoasset prices. But we still have a long way to go.
In the meantime, the only solid indicator that we have is price history, which is why technical analysis is so popular among crypto-analysts. By looking at the crypto charts right now, in contrast to what’s been said about the stocks, we can empirically notice that the crypto markets are considerably closer to the bottom at the moment than they are to the top.
Today’s Highlights
Bouncy Bounce
A nice bounce was affected this morning during the Asia session. Both stock markets and cryptos have come off their lows. This certainly looks like a much-needed relief rally at this point but could also turn out to be a dead cat bounce.
These four graphs serve to demonstrate that on a short enough time frame, everything is rising.
Hash War Continues
The battle for Bitcoin Cash continues and as of this writing, there is still no clear winner. As we know, this is more of a sideshow but since several analysts have pointed to this as a contributing factor to the recent volatility, we might as well explore it further.
