Charles Edwards, founder of Capriole Fund, has flagged a historic turning point in a key Bitcoin metric: electrical cost. He notes that Bitcoin has hit its electrical cost, and based on historical precedents, every time this happens, it has been a "generational investment opportunity."
As reported, Edwards stated that the Bitcoin Yardstick, a rare Bitcoin indicator, was painting a very familiar pattern similar to the 2019 lows.
Every time the Bitcoin price has hit its Electrical cost in the past, it has been a generational investment opportunity. Without fail. This is by far my most trusted long-term Bitcoin metric because of this. pic.twitter.com/z8eeZdlRUP— Charles Edwards (@caprioleio) April 5, 2023
In a recent tweet, on-chain analytics firm Glassnode also made the case that another key Bitcoin metric points to an inflection point, signaling a changing of the tide.
Glassnode says that the current structure of the Bitcoin RHODL ratio suggests a notable abrupt rotation of capital beginning from the FTX collapse, with coins shifting from long-term holders toward a new cohort of buyers.
"This sharp decline in the RHODL ratio can be seen in prior cycles to be an inflection point, suggesting a changing of the tides," Glassnode stated.
Another popular valuation model for Bitcoin is the Market Value to Realized Value (MVRV) Ratio. MVRV is currently trading at 1.4, which aligns more closely with a recovery phase, Glassnode said in its weekly report.
Bitcoin price action
The price of Bitcoin tends to move up toward the top of its recent range of about $28,000. Early on Wednesday, the biggest cryptocurrency by market value reached intraday highs of $28,799.
Since breaking through that barrier last month for the first time since June, Bitcoin has been trading at around $28,000.
According to CoinMarketCap statistics, Bitcoin had gained 1.5% the previous day and is currently trading at $28,529.
Even though a growing U.S. regulatory crackdown and the failure of a few crypto-adjacent banks have dampened some investors' enthusiasm, Bitcoin's recovery this year after falling in 2022 made it the best-performing commodity in the first quarter.