NEWSLETTER
Even though the bitcoin price has been volatile over the past few days, analysts are still analyzing the price action. Earlier today, a CryptoQuant analyst twitter&utm_medium=sns&utm_campaign=quicktake&utm_content=burakkesmeci” target=”_blank”>turned The focus is on bitcoin’s NVT Golden Cross, a metric known to signal potential local tops and bottoms in the bitcoin price.
According to analyst Burak Kesmeci, this metric now shows cause for concern as it is currently struggling to surpass its previous peaks.
How the NVT Golden Cross is Sending a Warning Signal for bitcoin?
To answer this question, it is worth first understanding what NVT Golden Cross means. It is worth noting that the NVT (Network Value to Transactions) Golden Cross is an important metric used to determine the health of the bitcoin market.
It is calculated by dividing the network value (market cap) by the daily transaction volume and then applying a moving average to this ratio.
Traditionally, when the NVT Golden Cross rises above 2.2 points, it indicates a local maximum, while if it falls below -1.7 points it indicates a local minimum.
According to the report shared by CryptoQuant analyst, the NVT Golden Cross has been showing a worrying trend over the past few months.
The metric has failed to break above its previous peaks, which has historically been a bearish signal. Since March 2024, the NVT Golden Cross peaks have been steadily declining.
Kesmeci revealed that on March 31, the metric plummeted to 3.17, on April 29, it decreased to 3.08, on May 27 – 2.67, on July 29 – 2.03, and on August 26 – 1.46. According to Kesmeci, this downward trend suggests that the current uptrend in bitcoin price may be losing steam.
The analyst noted:
It seems that to regain momentum, the NVT Golden Cross needs to break above the previous peak and drag the bulls behind it.
Outlook on the future of btc
Despite the NVT Golden Cross warning signs, not all analysts are sounding the alarm. Prominent cryptocurrency analyst Ash crypto recently shared a more optimistic outlook on x, x.com/Ashcryptoreal/status/1829103588959744024″ target=”_blank”>suggestion that current price declines should be viewed in the context of a broader bullish pattern.
Ash crypto emphasized that bitcoin’s bullish flag pattern remains intact and that investors should focus on long-term charts rather than short-term volatility. Ash crypto further backed up its bullish stance by pointing to global liquidity metrics.
He x.com/Ashcryptoreal/status/1829063957060968873″ target=”_blank”>noted that global liquidity (M2) has reached an all-time high of $95 trillion, a factor that historically correlates with significant upward movements in the price of bitcoin.
<blockquote class="twitter-tweet”>
RIP
GLOBAL LIQUIDITY (M2) REACHED A NEW HISTORICAL RECORD OF 95 TRILLION USD.
bitcoin ALWAYS FOLLOWS GLOBAL LIQUIDITY, SO SOON btc WILL REACH $125,000+ image.twitter.com/NGGhxD38g2
— Ash crypto (@Ashcryptoreal) twitter.com/Ashcryptoreal/status/1829063957060968873?ref_src=twsrc%5Etfw” target=”_blank”>August 29, 2024
According to his analysis, this could push bitcoin to hit the $100,000 mark sooner than many expect, with potential for even bigger gains, possibly reaching $125,000.
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Featured image created with DALL-E, chart by TradingView
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