Bitcoin is finally seeing a glimpse of hope today with a decent 3% price increase climbing above $9,240 and eyes $9,292, the last daily high. Bulls are also facing some resistance at $9,260, the daily 26-EMA. If Bitcoin can see a clear break above $9,300 and close, the daily uptrend will be confirmed.
The daily MACD is also extremely close to a bull cross, almost inevitable as long as Bitcoin stays above $9,200 today. The RSI is only at 50 points, which means it will have no impact in the short-term, and EMAs are getting closer to each other, hinting at a possible bull cross within the next week if bullish action continues.
What is Bitcoin’s Energy Level Metric and How Does it Affect Its Price?
Bitcoin, as other Proof of Work (PoW) cryptocurrencies, consumes a lot of electricity around the world. People mining Bitcoin need to use electricity to run their hardware in order to mine Bitcoin.
The idea behind Bitcoin’s Energy-Value equivalence is that one can use energy or Joules to estimate the fair value of Bitcoin. If the energy input is higher, the value of Bitcoin should increase.
The logic behind this metric is that energy consumption basically translates into an intrinsic value for Bitcoin. Back in December 2019, the Energy Value formula calculated that the fair value of Bitcoin was around $11,500.
The energy value has increased significantly from December 2019, however, the price hasn’t. Unfortunately, it’s not clear if there is really any correlation between the Expected Value and the actual price as the value of Bitcoin will still be based on demand more than anything else.
Regardless of predictions, the increase in Energy Value shows that people are still interested in Bitcoin, in fact, more interested than before even though its price has been 50% lower than the ATH for the past two years. In a way, this translates into more demand which should push its price higher.