Jurrien Timmer, the director of global macro at Fidelity Investments, has opined that Bitcoin no longer appears to be overpriced following the recent correction.
“When the price action gets noisy and volatile, it’s always good to return to the fundamentals of valuation,” he said on the X social media network.
Timmer uses two key approaches for determining the fair value of Bitcoin: the internet S-curve and the wallet power curve.
After the recent price drop, Bitcoin appears to be “right in the middle” of the path, according to Timmer. This suggests that the cryptocurrency is neither overpriced nor underpriced.
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“Since its inception, bitcoin’s price has been closely linked to the size and growth of its network, with the occasional over and under-shoots that are to be expected from an emerging asset going through price discovery,” Timmer explained earlier.
Last month, Timmer opined that the growth of the Bitcoin network has slowed down due to the dominance of Bitcoin ETPs.
The reason behind the correction
Timmer attributes the recent correction to the “tourists” who jumped on the Bitcoin train in late 2024:
Judging by open interest and ETP flows, this seems to be mostly caused by tourists who jumped on the momentum train last November,” he said.
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Earlier today, the price of Bitcoin plunged to an intraday low of $81,688, but it has since pared some of these losses. The cryptocurrency is currently trading at $85,369, according to CoinGecko data.
More than $1 billion worth of crypto longs and shorts have been liquidated over the past 24 hours.
