Bitcoin’s Momentum at Risk? NVT Golden Cross Sends Warning Signals
August 29 2024 - 6:00PM
NEWSBTC
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. Related
Reading: Bitcoin’s Sudden Drop: Could This Be a Setup for a Massive
Rally? Analyst Weighs In How Is The NVT Golden Cross Signalling a
Warning For Bitcoin? 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. Outlook On
BTC Future 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. Related Reading: Crypto Crash: $320
Million Wiped Out As Bitcoin And Ethereum Nosedive 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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