Four Key Bitcoin Metrics Suggest $80K BTC Price is a Discount

Bitcoin (BTC) experienced a price decline from $87,241 to $81,331 between March 28 and March 31, erasing the gains it had made over the previous 17 days. This 6.8% correction resulted in the liquidation of $230 million in bullish BTC futures positions and closely followed the downward trend seen in the US stock market, where the S&P 500 futures dropped to their lowest levels since March 14.

Despite the struggle to maintain a price above $82,000 on March 31, four important indicators point to strong investor confidence in Bitcoin. These metrics suggest a possible decoupling of Bitcoin from traditional markets in the near future.

S&P 500 index futures (left) vs. Bitcoin/USD (right). Source: TradingView

Traders are increasingly concerned about the effects of the ongoing global trade war on economic growth. This anxiety was amplified by the March 26 announcement of a 25% US tariff on foreign-made vehicles. Goldman Sachs strategists have reduced their year-end S&P 500 target for the second time, dropping it from 6,200 to 5,700. Similarly, Barclays analysts revised their forecast from 6,600 to 5,900.

Despite the heightened risk perception in the market, gold has surged to a record high above $3,100, reaffirming its status as a leading hedge asset, especially as traders prioritize alternatives to cash. Additionally, the US dollar has weakened against a range of foreign currencies, with the DXY index falling from 107.60 in February to 104.10.

Strong Bitcoin Metrics Amidst Market Downturn

Concerns regarding Bitcoin’s identity as “digital gold” and an “uncorrelated asset” have arisen, even though Bitcoin has gained 36% over the last six months, while the S&P 500 index has fallen by 3.5% during the same timeframe. Several key Bitcoin metrics are showing resilience, suggesting that long-term investors are not swayed by the recent market correlations.

One of the significant indicators is Bitcoin's mining hashrate, which reflects the total computing power devoted to the network’s block validation. On March 28, the 7-day hashrate reached an all-time high of 856.2 million terahashes per second, increasing from 798.8 million in February. This indicates that miners are not engaging in panic selling; evidence of this can be seen in the flow of known entities to exchanges.

Bitcoin mining estimated 7-day average hashrate, TH/s. Source: Blockchain.com

Historically, downturns in BTC prices were often linked to fears of a mining “death spiral,” wherein miners were forced to sell their holdings due to decreased profitability. However, on March 30, the 7-day average of net transfers from miners to exchanges was only BTC 125, which is significantly lower than the daily BTC production of 450.

Bitcoin 7-day average net transfer volume from/to miners, BTC. Source: Glassnode

On March 28, Bitcoin mining company Marathon Digital Holdings filed a prospectus to sell up to $2 billion in stocks. This move is aimed at expanding its Bitcoin reserves and funding general corporate purposes. This filing comes in the wake of GameStop (GME), which recently announced a plan for a $1.3 billion convertible debt offering to update its investment strategy to include Bitcoin and stablecoin assets.

Declining Crypto Exchange Reserves

The reserves on cryptocurrency exchanges fell to their lowest levels in over six years by March 30, amounting to BTC 2.64 million, according to Glassnode data. This decrease in available coins for immediate trading usually indicates that investors prefer to hold onto their assets instead of trading, which is especially noteworthy as Bitcoin prices declined by 5.1% over the week.

Additionally, near-zero net outflows in US spot Bitcoin exchange-traded funds (ETFs) between March 27 and March 28 highlight confidence among institutional investors.

To summarize, Bitcoin investors show strong confidence due to the increasing mining hashrate, growing corporate adoption, and six-year low exchange reserves, all signaling a preference for long-term holding strategies.

Bitcoin, Investment, Market