Glassnode CTO Rafael Schultze-Kraft deduces that Bitcoin could manage a tenfold increase based on six key figures.
Rafael Schultze-Kraft, the German CTO of crypto market research institute Glassnode, sees several Bitcoin (BTC) metrics at „extremely promising“ levels, so promising in fact that he predicts a tenfold increase in the price over the course of this uptrend.
On December 9, Schultze Kraft posted a Twitter thread in which he arrives at the very optimistic assessment and explains the logic behind it. Accordingly, he cites six „of the most important metrics“ that are currently at similar levels as they were at the beginning of Bitcoin’s 2017 record run.
1/ Where are we in the #Bitcoin market cycle?
A look at some of the most important on-chain market indicators.
TLDR: Insanely bullish, most metrics are far from the top. If things develop anything like 2017, we could see more than 10x $BTC from here.
For every single metric, Schultze-Kraft derives a multiplication of the bitcoin price into the six-figure range, with all but one even pointing to a price value of more than $200,000.
To arrive at these forecasts, Schultze-Kraft took as a starting point for each metric the value that the metric currently has. He looked at this for 2017, calculating the percentage gain in the bitcoin price from its then level to its record high. He has in turn applied this percentage gain to the current bitcoin price, which leads him to the price targets he predicts.
First, Schultze-Kraft points to the „Net Unrealized Profit/Loss“ (NUPL), a metric that „shows the difference between unrealized gains and losses since the last movement of the Bitcoin currency units under consideration.“ The NUPL is currently back at 78% of its 2017 record high.
At that time, a gain of 1,400% followed, which in turn allowed the NUPL to capture its previous record high of 201. If similar this time around, such a gain would carry Bitcoin’s price up to $286,000.
Net Unrealized Profit/Loss of Bitcoin.
The next metric is the „Market Cap to Thermocap Ratio,“ which relates Bitcoin’s market capitalization to the total profit made by Bitcoin miners. The MCTC currently stands at a quarter of its record high in 2017, when Bitcoin gained 625%, which also catapulted the ratio to new heights. Currently, a similar increase would result in a price of $138,000.
The „MVRV Z-Score“, which in turn compares whether Bitcoin is overvalued or undervalued relative to its „fair“ market value, currently stands at 34% of its 2017 record high, which was followed by a price increase of 1,150%. Such an upswing would see the market-leading cryptocurrency currently climb to $240,000.
As Kraft-Schultze explains, the metrics that track the long-term behavior of Bitcoin investors are quite indicative of strong gains.
For example, the long-term „MVRV,“ which shows the average gain or loss of all circulating bitcoin, and the long-term „SOPR,“ which breaks down the total gain and loss since certain bitcoin last moved, each show a value 13% of the 2017 record high. At that time, the price gained 1,340% and 1,620%, respectively, which would mean values of $274,000 and $328,000 for the current bitcoin price.
„Reverse Risk“ a metric that measures long-term investor confidence relative to the price, also suggests the price could jump as high as $240,000, as it currently stands at just 11% of its 2017 record high.
Despite all the „promising“ metrics, however, Kraft-Schultze cautions his followers to „take them with a grain of salt“ because each is just a single data point. Nonetheless, his conclusion remains very optimistic:
„What I’m saying is that these bitcoin metrics are currently far from their levels during the record high of 2017.“
So there is still a lot of upside for the price, if Schultze-Kraft and the metrics he presents are to be believed.
Meanwhile, his crypto market research firm, Glassnode, released a report on Dec. 8 that predicts Bitcoin will initially experience a downturn before continuing upward to new record highs. It states:
„Initially, there will be a downward or sideways move as investors unwind the gains they made during the recent climb.“