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Bitcoin’s Advanced NVT signal and RSI levels show that a price recovery is in place as the BTC price has been hovering for a long time around $56,000 levels.
The broader crypto market and the world’s largest cryptocurrency Bitcoin (BTC) have been moving sideways for the last few weeks. Although, Bitcoin made a brief attempt at kickstarting the rally again, but faced stiff resistance at $60,000. After this rejection, BTC has tested support once again at $56,000. Some of the on-chain charts for Bitcoin show that the BTC price at this point could be seriously cheap.
On Wednesday, November 24, crypto analyst Philip Swift tweeted:
“Advanced NVT (blue line) has now dropped deep into oversold territory (green bands). #Bitcoin is looking seriously cheap relative to network activity here on high time frames. Expecting a strong reaction in the not too distant future.”
The Advanced NVT signal uses Bitcoin’s market capitalization and network volume to determine the extent to which BTC is oversold. In an introduction to this metric, Swift explains that the Advanced NVT builds on the original NVT, while accounting for changes in investor habits as Bitcoin continues to mature over time.
The Advanced NVT signal is basically the total market cap of Bitcoin divided by the 90-day moving average of the network transaction volume. Currently, Bitcoin seems to be in the “deep oversold territory”. Whenever this happens, a Bitcoin price surge follows soon.
The accompanying chart in the above tweet also shows that the Advanced NVT for Bitcoin is now at its lowest since the beginning of 2020.
On-Chain Charts: RSI Levels Suggest at BTC Price Reversal
Along with Advanced NVT, other on-chain metrics also show a strong reversal in place. Bitcoin’s Relative Strength Index (RSI) show that a price surge is in place.
Furthermore, in its recent newsletter on Tuesday, November 23, on-chain analytics platform Glassnode reported a “unique case” for short-term holders (STH). The players control the smallest amount of Bitcoin in three years, however, spot prices remain relatively at all-time high.
The short-Term Holders (STH) usually fall in the bracket who have spent their BTC in the last 155 days. The Glassnode report notes:
“Low STH supply is typical at the end of bear markets and in early bull markets, usually following long periods of accumulation. Seeing STH supply this low whilst price is near ATHs is a relatively unique case.”
As of press time, BTC is up 1% moving closer to $58,000 levels. The world’s largest cryptocurrency has relatively managed to holds its valuations above $1 trillion. Analysts have been giving $100K price targets for Bitcoin by the end of the year.