Bitcoin rises to $59,000 but remains in low valuation territory

Despite Bitcoin's recovery to $59,000, Bitfinex analysts say BTC remains in undervaluation territory.

Bitcoin is currently trading at $59,300, with a slight increase of around 4% since hitting a low of $57,000 in the past 24 hours. Bitfinex analysts predict that post-halving, Bitcoin will continue to consolidate its price position, while other cryptocurrencies are attracting interest from investors thanks to their potential. ability to bring higher returns in value.

Bitcoin is undervalued

The latest market report from Bitfinex states that Bitcoin is undervalued, with the Market Value to Realized Value (MVRV) index currently reaching 2.21. This is considered a potential opportunity for investors as historical data shows that there are significant profits when MVRV falls below the 90-day average. However, Bitcoin's dominance is fading as Ethereum and other cryptocurrencies are gaining ground.

This shift in investment patterns is a result of a recent federal economic report highlighting slower-than-expected growth in the U.S. economy. Annual real GDP growth slowed to 1.6% in the first quarter of 2024, down from 3.4% in the final quarter of 2023. This has prompted investors to seek money Alternative currencies with higher profit potential.

Important macroeconomic factors

Macroeconomic factors are affecting Bitcoin's performance according to Bitfinex, with the United States' slowing economic growth assessed as being due to microeconomic factors, such as rising interest rates causing Investors are not encouraged. Avoid investing in assets like Bitcoin, which are volatile. The Fed's main inflation gauge, the personal consumption expenditures index (PCE), was flat in March, remaining steady at a 0.3% increase from the previous month. On an annual basis, PCE came in at 2.7%, above the Fed's 2% inflation benchmark and ahead of consensus forecasts.

The Bitfinex report also highlighted a shift towards altcoins, evidenced by the recent decline in inflows into Bitcoin ETFs in the United States. After the US Securities Exchange Commission (SEC) approved Bitcoin ETFs in January, these funds received widespread attention, with around $12 billion invested. However, this inflow decreased in April, leading to a shift in investor focus towards altcoins.

In short, although Bitcoin's price consolidation may continue for up to two months after the halving, the cryptocurrency's dominance is fading. This, coupled with slower US economic growth and reduced inflows into Bitcoin ETFs, is pushing investors to focus on altcoins in search of higher potential returns.