Bitcoin has seen notable gains, rising 3% in the last 24 hours to trade at $71.1k at press time. Despite encountering resistance at $71.4k, there are strong bullish indicators in the higher timeframes. The key question is whether Bitcoin is currently overvalued.

The Thermo Cap metric, which reflects the cumulative value of all Bitcoins mined to date, suggests strong network fundamentals. The ratio, which divides Bitcoin's market capitalization by the Thermo Cap, has been on an upward trend for the past eight months. According to CryptoQuant CEO Ki Young Ju, this indicates that Bitcoin is not overvalued based on network fundamentals.

Another useful tool to assess Bitcoin’s potential overvaluation is the Net Unrealized Profit/Loss metric. Currently above 0.5, this metric shows that most investors are in profit, a common scenario during a bull run that often leads to profit-taking. However, a value above +0.7 typically signals an approaching cycle top and the potential for a significant correction.

The Network Value to Transactions (NVT) ratio, which measures market capitalization divided by transaction volume, has also been rising recently. This suggests that Bitcoin might be overvalued in terms of its transactional capacity. However, this might not necessarily lead to a correction, as entities like Michael Saylor and MicroStrategy view Bitcoin as an inflation hedge rather than a transactional network, potentially reinforcing the rising NVT ratio without indicating overvaluation.