TechFlow news, on August 12, according to Cointelegraph, Bitcoin has shown a "local bottom" signal for the third time in 2024. According to recent research by on-chain analytics platform CryptoQuant, the Network Value to Transaction Golden Cross (NVT-GC) tool is indicating a bullish trend. This week, BTC/USD faces renewed downside risk as moving averages have formed what's known as a "death cross." However, the long-term market outlook remains unclear, while other market indicators suggest a rebound could persist.
The NVT-GC is described as a volatility indicator similar to Bollinger Bands. The NVT indicator compares Bitcoin’s market capitalization with transaction value over a specific period, while the Golden Cross version compares long-term and short-term NVT values. The result provides rough guidance on market tops and bottoms, with three such bottom signals having appeared in 2024 so far.
Burakkesmeci, analyst at CryptoQuant, explained: "If the NVT GC rises above 2.2 points (the red zone), it indicates that prices are overheated in the short-term trend and are in a local top area. Conversely, if the NVT GC drops below -1.6 points (the green zone), it suggests prices are excessively cooled off and are in a local bottom region."
The previous two bottom signals occurred on January 18 and July 12, after which BTC prices rose 78% and 23%, respectively. Currently, according to NVT-GC, we are in a local bottom zone. Although prices may decline further, the short-term trend is expected to turn positive within this area.
