Journalist
Posted:
- According to Bitcoin’s NVT Golden Cross, the latest price drop has not reset the local top risk signal.
- Demand from US investors turned negative for the first time since the election.
Bitcoins [BTC] The drop from approximately $100,000 to $90,000 was not surprising, as AMBCrypto had previously noted. overheated market signals just before the flash crash.
The recent shakeout was expected to normalize market conditions for a solid recovery. But a key local top/bottom metric signal, Bitcoin NVT Golden Cross, remained sticky and high.
Bitcoin’s NVT Golden Cross Warning
Source: CryptoQuant
For context, the indicator is a modified version of the Network Value to Transaction (NVT) valuation metric.
It correctly took past local BTC tops and bottoms earlier when it turned positive or negative. A reading above 2.2 (overselling) could indicate a likely top, while a low reading of -1.6 indicates a possible local bottom.
CryptoQuant analyst DarkFost marked it a few days ago when it turned positive, warning of a potential top if it remained high. At the time of writing, the benchmark was still high, but below the risky level of 2.2, despite BTC’s 9% decline.
If historical trends continue, the BTC NVT Golden Cross value (1.73, green bars) at the time of writing suggested that BTC could still undergo an additional correction.
That said, other overheated market signals, such as financing rates, normalized after the drop to $90,000.
According to IntoTheBlock, the shake out was a leverage flush, which could have run its course after clearing the highly leveraged positions and normalized financing rates.
Source: IntoTheBlock
That said, the weakening of BTC put stress on US investors as demand turned negative for the first time since the US elections. This was illustrated by the Coinbase Premium Index, which tracks US investor interest in the king coin.
Read Bitcoin [BTC] Price prediction 2024-2025
Will the trend change? Most market experts believed that the bottom had been reached and that a recovery attempt after the US Thanksgiving holiday was likely.
Source: CryptoQuant