Explore the impact of Bitcoin network activity decline on its price valuation. Discover if Bitcoin's current price is justifiable based on key metrics like Metcalfe’s Law and MVRV ratio.
Bitcoin (BTC) has faced a price drop after crossing the $100,000 level, reaching $96,000. Despite exciting investors, on-chain data presents a different picture. The network activity of Bitcoin has hit its lowest level in the past year, raising questions about whether the current price of this cryptocurrency is justified. Key metrics like Metcalfe’s Law and Market Value-to-Realized Value (MVRV) ratio can indicate a potential price correction. Recent Bitcoin prices dropping below $98,000 suggest that the current price may exceed its real value. According to Metcalfe’s Law, Bitcoin’s fair value ranges between $48,000 to $95,000. Given Bitcoin’s price surpassing this range, concerns about the sustainability of these price levels have emerged.
