Bitcoin (BTC) is “seriously cheap” at $ 56,000 relative to network activity – and that means only one thing, says one analyst.
In one tweet 24, Philip Swift, creator of the LookIntoBitcoin analytics platform, has displayed a bullish flag on Bitcoin Advanced NVT Signals.
Bitcoin “enters 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 given price.
As Swift explains in introducing the index, it builds on the original NVT and takes into account changes in investor habits as Bitcoin matures over time.
Therefore, Enhanced NVT is the total Bitcoin market capitalization divided by the 90-day average network transaction volume. Right now it is “deep in the oversold zone” and if that happens the price will rise shortly thereafter.
Swift writes, “Bitcoin looks cheap compared to network activity here over high time frames.
“Expect a strong response in the not too distant future.”
An accompanying graphic shows that the upgraded NVT is currently at its lowest level since early 2020, excluding this year’s coronavirus incident and the 2021 miners’ failure in China.
The old hand is still in control
As Cointelegraph reported, the NVT is not the only online indicator that signals a trend reversal under the current conditions.
Related: Bitcoin is seeing a new spike in a moment as analysts say it’s almost time for BTC to move up.
Relative Strength Index (RSI) readings also suggest an uptrend in BTC, while several others refuse to reverse the bear market despite marking sentiment.
In its latest weekly newsletter, The Week On-Chain, published Tuesday, online chain analyst Glassnode also identified the “unique case” of short-term (STH) owners. ) has controlled the smallest amount of Bitcoin in three years, while spot prices remain relatively close to all-time highs.
STH wallets are those that have been using Bitcoin within the last 155 days.
“A low supply of STH is typical at the end of bear markets and in early bull markets, often after long periods of accumulation,” the analysts wrote.
“To see a low supply of STH while prices are close to ATHs is a relatively unique case.”