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Bitcoin price metric calls for ‘strong backlash’ as ​​$ 56,000 level begins to look ‘seriously cheap’

Bitcoin (BTC) is “really cheap” at $ 56,000 relative to network activity, and that means only one thing, says one analyst.

In a Tweet on November 24, Philip Swift, creator of the LookIntoBitcoin analytics platform, highlighted a bullish flag on Bitcoin’s advanced NVT signal.

Bitcoin is “deep in oversold territory”

Advanced NVT uses Bitcoin’s market capitalization and network volume to determine the extent to which BTC is overbought or oversold at a certain price.

As Swift explains in an introduction to the metric, it is based on the original NVT, and takes into account changes in investor habits as Bitcoin has matured over time.

Advanced NVT is therefore the total market capitalization of Bitcoin divided by the 90-day moving average of the network’s transaction volume. Currently, it is “deep in oversold territory”, and when that happens, a price increase soon follows.

“Bitcoin looks seriously cheap relative to network activity here over elevated time periods,” Swift wrote.

“Expecting a strong reaction in the not too distant future.”

An accompanying chart shows that Advanced NVT is now at its lowest level since the beginning of 2020, with the exception of that year’s Coronavirus crash and the 2021 mining shutdown in China.

Bitcoin advanced NVT signal chart. Source: Philip Swift / Twitter

Veterans stay in control

As Cointelegraph reported, NVT is far from the only on-chain indicator that indicates a change in trend under current conditions.

Relative Strength Index (RSI) values ​​also point to a rise in the price of BTC, while many others refuse to turn bearish despite the weakening trend.

In their latest weekly newsletter, The Week On-Chain, published on Tuesday, On-chain analytics firm Glassnode further noted the “unique case” of short-term holders (STHs) controlling the smallest amount of Bitcoin in three years, while spot prices remain relatively close to all-time highs.

STH wallets are those that have spent Bitcoin in the last 155 days.

“Low STH supply is typical at the end of bear markets and early bull markets, usually after long periods of accumulation.”the analysts wrote.

“Seeing the supply of STH so low while the price is close to ATH is a relatively unique case.”

Short-term Bitcoin holder supply ratio chart. Source: Glassnode

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HELEN HERNANDEZ

Helen Hernandez is our best writer. Helen writes about social news and celebrity gossip. She loves watching movies since childhood. Email: Helen@oicanadian.com Phone : +1 281-333-2229

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