This bitcoin metric could trigger the next big BTC bull run

Bitcoin analysts use a number of different metrics to predict future asset price movements. A rarely used oscillator takes into account the BTC energy value – and it is currently flashing bullish.

What is the bitcoin energy value?

Okay, so: the key figure may not be as popular as others (such as the NVT ratios or unadjusted transaction values), but it is still worth a look.

The oscillator considers the Bitcoin price as a percentage in relation to its energy value. It is believed that raw joules alone can be used to estimate a fair value for BTC.

Digital asset manager Charles Edwards delved deeper into this little-known metric and found some great similarities to previous Bitcoin market patterns:

“2019 looks VERY similar to the initial characteristics of previous bull runs.”

Energy Value Oscillator.

Bitcoin's price as a percentage of its Energy Value.

2019 looks VERY similar to the starting characteristics of prior bull runs.

Just need to see that uptick in Hash Rates 🚀 pic.twitter.com/zd82aHMlXt

— Charles Edwards (@caprioleio) December 17, 2019

The chart shows a clear pattern when the values ​​fluctuate between 50% and -50% – just before the two previous big Bitcoin bull runs.

A detailed analysis of Edwards’ energy value model summarizes:

“The energy value model says that if all miners stopped mining Bitcoin tomorrow, the energy use would be zero and Bitcoin would be worthless.”

Using the energy value formula, Bitcoin’s current market value last week was $ 11,500 – well above the actual trading price.

Other factors come into play, such as BTC production costs, which are made up of the Bitcoin price and mining costs. It has been found that fluctuations in these areas are caused by the level of electrical energy use and the energy efficiency of the mining hardware.

For the past ten years, the chart shows a strong correlation between the Bitcoin energy value and its historical price including stock-to-flow.

Conclusion of the analysis: Everything that means an increase in energy use will drive up the Bitcoin price – as well as higher hash rates.

The hash rates have leveled off in the past two months, according to bitinfocharts.org. They are currently between 85 and 100 EH/s, which shows a certain network stability and contradicts the idea that miners would surrender.

If the story about energy metric repeats, the next BTC bull run could be imminent. This would be consistent with the stock-to-flow model and bitcoin halving in five months.

“If Bitcoin is successfully used in large quantities as an asset and / or currency store, there may be evidence in the financial marketplace that value is inextricably linked to effort – the joule of energy used for work.”