4,561 total views
Analysts aren’t fooled by Bitcoin’s sluggish price performance, as Advanced NVT Signal joins those anticipating a spectacular BTC resurrection.
Bitcoin (BTC) is “extremely cheap” at $56,000 when measured against network activity, according to one researcher.
Philip Swift, the creator of analytics tool LookIntoBitcoin, noticed a bull flag on Bitcoin’s Advanced NVT Signal in a tweet on Nov. 24.
Bitcoin “deep into oversold territory”
Advanced NVT uses Bitcoin’s market capitalizatio and network volume to determine the extent to which BTC is overbought or oversold at a certain price point.
As Swift explains in an introduction to the metric, it builds on the original NVT, accounting for changes in investor habits as Bitcoin matures over time.
Advanced NVT is thus the total Bitcoin market cap divided by the 90-day moving average of network transaction volume. Currently, it is “deep into oversold territory,” and when that happens, a price rise soon follows.
“Bitcoin is looking seriously cheap relative to network activity here on high time frames,” Swift wrote.
“Expecting a strong reaction in the not too distant future.”
An accompanying chart shows that Advanced NVT is now at its lowest since the start of 2020, with the exception of that year’s coronavirus crash and the 2021 miner shutdown in China.
Old hands remain in control
NVT is far from the only on-chain indication showing a trend reversal in present conditions, as previously noted.
Relative strength index (RSI) values are also pointing to a BTC price increase, while a slew of others, despite waning mood, refuse to turn pessimistic.
In its latest weekly “The Week On-Chain” newsletter, released Tuesday, fellow on-chain analytics firm Glassnode further noted the “unique case” of short-term holders (STH) controlling the smallest amount of Bitcoin in three years, while spot prices remain relatively near all-time highs.
STH wallets are those that have spent Bitcoin within the past 155 days.
“Low STH supply is typical at the end of bear markets and in early bull markets, usually following long periods of accumulation,” analysts wrote.
“Seeing STH supply this low whilst price is near ATHs is a relatively unique case.”