Bitcoin price action despite being wobbly in the past days, is still being discussed by analysts. Earlier today, a CryptoQuant analyst turned the spotlight to the Bitcoin’s NVT Golden Cross, a metric that has been known to signal potential local tops and bottoms in Bitcoin’s price.
According to the analyst, Burak Kesmeci, this metric is now showing a reason for concern as it is currently struggling to surpass its previous peaks.
To answer this question, it is worth first understanding what the NVT Goden Cross means. Notably, the NVT (Network Value to Transactions) Golden Cross is a major metric used to determine the health of Bitcoin’s 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 signals a local top, while dropping below -1.7 points indicates a local bottom.
According to the report shared by the CryptoQuant analyst, the NVT Golden Cross has been showing a concerning trend over the past few months.
The metric has consistently failed to surpass its previous peaks, which has historically been a bearish sign. Since March 2024, the peaks of the NVT Golden Cross have been steadily declining.
Kesmeci disclosed that on March 31, the metric plunged 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 declining trend suggests that the current uptrend in Bitcoin’s price may be losing steam.
The analyst noted:
It seems that for the momentum to be regained, the NVT Golden Cross needs to surpass the previous peak and bring the bulls behind it.
Despite the cautionary signals from the NVT Golden Cross, not all analysts are sounding the alarm. Prominent crypto analyst Ash Crypto recently shared a more optimistic outlook on X, suggesting that the current price dips should be viewed within the context of a broader bullish pattern.
Ash Crypto emphasized that the Bitcoin bull-flag pattern remains intact and that investors should focus on long-term charts rather than short-term volatility. Ash Crypto further supported his bullish stance by pointing to global liquidity metrics.
He noted that global liquidity (M2) has reached an all-time high of $95 trillion, a factor that historically correlates with significant upward movements in Bitcoin’s price.
BREAKING
GLOBAL LIQUIDITY (M2) REACHED A
NEW ALL-TIME HIGH RECORD OF $95
TRILLION.
BITCOIN ALWAYS FOLLOW GLOBAL
LIQUIDITY, SO BTC TO $125k+ SOON pic.twitter.com/NGGhxD38g2
— Ash Crypto (@Ashcryptoreal) August 29, 2024
According to his analysis, this could propel Bitcoin to reach the $100,000 mark sooner than many expect, with potential for even higher gains, possibly reaching $125,000.
Featured image created with DALL-E, Chart from TradingView
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