Bitcoin (BTC) is “really cheap” at $ 56,000 compared to network activity – and that only means one thing, according to one analyst.
In one Tweeter On November 24, Philip Swift, creator of the LookIntoBitcoin analytics platform, highlighted a bullish flag on Bitcoin’s forward NVT signal.
Bitcoin “deep in oversold territory”
Advanced NVT uses Bitcoin’s market capitalization and network volume to determine how much BTC is overbought or oversold at a certain price.
As Swift explains in a introduction on the metric, it builds on the original NVT, accounting for changes in investor habits as Bitcoin matures over time.
Advanced NVT is therefore the total market capitalization of Bitcoin divided by the 90-day moving average of the volume of transactions on the network. Currently, it is “deep in oversold territory”, and when that happens, prices rise quickly.
“Bitcoin looks really cheap compared to network activity here on high time frames,” Swift wrote.
“While waiting for a strong reaction in the not too distant future. “
An attached graph shows that Advanced NVT is now at its lowest since the start of 2020, with the exception of this year’s coronavirus crash and the miner’s shutdown in 2021 in China.
Old hands keep control
As Cointelegraph reported, NVT is far from the only on-chain indicator signaling a trend reversal under current conditions.
Related: Bitcoin Sees New Split-Second Spikes As Analysts Say ‘Almost Time’ For BTC Rise
Relative Strength Index (RSI) values also hint at a rise in BTC prices, while a host of others refuse to tip lower despite the feeling of sagging.
In his latest weekly “The Week On-Chain” bulletin, released on Tuesday, chain analytics firm Glassnode further noted the “unique case” of short-term holders (STH) controlling the smallest amount of Bitcoin in three years, while spot prices remain relatively close to historic peaks.
STH wallets are those that have spent Bitcoin in the last 155 days.
“The low supply of STH is typical at the end of bear markets and at the start of bull markets, generally after long periods of accumulation,” the analysts wrote.
“Seeing STH providing this low when the price is close to ATH is a relatively unique case. “