Jurrien Timmer, Fidelity’s director of global macro, has argued that Bitcoin (
$84,408.00 ) (BTC) may be “cheaper than it looks”, highlighting evidence on Tuesday that the cryptocurrency may be both undervalued and oversold.
Addressing his 126,000 Twitter followers, Timmer explained that while Bitcoin ( $84,408.00 ) has fallen back to 2020 levels, its price-to-network ratio has reeled all the way back to 2013 and 2017 levels, which he said may indicate it is undervalued.
Is BTC cheaper than it looks? If we consider a simple “P/E” metric for BTC to be the price/network ratio, then that ratio is back to 2017 and 2013 levels, even though BTC itself is only back to late 2020 levels. Valuation often is more important than price. /THREAD pic.twitter.com/6XMPrtRUzF
— Jurrien Timmer (@TimmerFidelity) June 15, 2022
Bitcoin ( $84,408.00 ) undervalued
The price-to-network ratio is a crypto-riff on a popular metric used by traditional stock market investors called the price-to-earnings (P/E) ratio, which is used to determine whether a stock is over or undervalued.
A high ratio could suggest an asset is overvalued, whilst a low ratio could signal an undervalued asset.
Timmer highlighted a chart of Bitcoin ( $84,408.00 ) ’s demand curve overlaid with Bitcoin ( $84,408.00 ) ’s non-zero addresses against its marketcap, noting that the “price is now sitting below the network curve.”
Technically oversold
The macro analyst also shared a graph making use of Glassnode’s dormancy flow indicator, which he said suggests “how technically oversold Bitcoin ( $84,408.00 ) is.”
Entity-adjusted Dormancy Flow is a popular metric for judging Bitcoin ( $84,408.00 ) value by comparing the price to spending behavior.
According to Glassnode, a low dormancy flow value can suggest increased long-term holder conviction — meaning long-term Bitcoin ( $84,408.00 ) HODLers are buying up from queasy short-term sellers.
“Glassnode’s dormancy flow indicator is now to levels not seen since 2011.”
Morgan Creek Digital co-founder and Youtuber Anthony Pompliano gave a similar view to Fox Business Monday, explaining that Bitcoin ( $84,408.00 ) ’s “value and price are diverging” and that “weak hands are selling to strong hands.”
“What we’re watching right now is the transfer from weak, short-term oriented people with weak hands into the long-term oriented strong hands.”
Bitcoin ( $84,408.00 ) ’s Fear and Greed Index fell to 7, indicating “Extreme Fear” on Wednesday, falling to its lowest levels since Q3 2019. In the past, low index numbers have often suggested a buying opportunity.
Related: Bitcoin ( $84,408.00 ) price climbs to $22.5K after Fed 75 basis point hike aims to cap runaway inflation
Fidelity Investments and its analyst Timmer have been bullish on Bitcoin ( $84,408.00 ) . The investment giant has been working on launching a Bitcoin ( $84,408.00 ) retirement investment plan, which would allow 401(k) retirement saving account holders to invest in Bitcoin ( $84,408.00 ) directly. Timmer has been predicting that Bitcoin ( $84,408.00 ) may soon see a revival.
I joined Fox Business to discuss Bitcoin ( $84,408.00 ) and the macro environment.
Value and price are diverging. Weak hands are selling to strong hands. We have been here before.
Thanks @LizClaman for having me. pic.twitter.com/1S6TckUguE
— Pomp (@APompliano) June 13, 2022
$1,978.26 ) 
