Bitcoin’s price action, while choppy in recent days, is still a topic of discussion for analysts. Earlier today, CryptoQuant analyst turned The spotlight has fallen on Bitcoin’s NVT Golden Cross, an indicator that signals potential local highs and lows in the Bitcoin price.
Analyst Burak Kesmeci believes that this indicator is already a cause for concern, as it is currently struggling to break through previous peaks.
How is NVT’s Golden Cross a warning to Bitcoin?
To answer this question, it is worth first understanding what NVT Golden Cross stands for. It is worth noting that NVT (Network Value to Transactions) Golden Cross is the main indicator used to determine the health of the Bitcoin market.
It is calculated by dividing the network value (market capitalization) by the daily trading volume and then applying a moving average to the resulting ratio.
Traditionally, when the NVT Golden Cross rises above 2.2 points, it indicates a local top, while a drop below -1.7 points indicates a local bottom.
According to a report shared by a CryptoQuant analyst, NVT Golden Cross has been showing a disturbing trend for several months now.
This metric has consistently failed to break above its previous highs, which has historically been a bearish sign. Since March 2024, NVT Golden Cross’s highs have been steadily failing.
Kesmeci revealed that on March 31, the indicator dropped to 3.17, on April 29, it decreased to 3.08, on May 27, to 2.67, on July 29, to 2.03, and on August 26, to 1.46. According to Kesmeci, this downward trend suggests that the current uptrend in Bitcoin price may be losing momentum.
The analyst noted:
It looks like Golden Cross NVT needs to break through the previous high and pull the bulls along with it to regain momentum.
BTC Future Prospects
Despite the warning signs from NVT Golden Cross, not all analysts are sounding the alarm. Prominent crypto analyst Ash Crypto recently shared a more sanguine view of X, suggestion that the current price declines should be viewed in the context of a broader upward trend.
Ash Crypto emphasized that Bitcoin’s bull flag pattern remains intact and that investors should focus on long-term charts rather than short-term volatility. Ash Crypto further supported his bullish stance by pointing to global liquidity indicators.
He excellent that global liquidity (M2) reached a record high of $95 trillion, which historically correlates with significant upward swings in Bitcoin price.
BEATING
GLOBAL LIQUIDITY (M2) HAS REACHED A NEW HISTORICAL RECORD OF $95 TRILLION.
BITCOIN ALWAYS FOLLOWS GLOBAL LIQUIDITY SO BTC WILL SOON REACH $125,000 AND MORE photo:twitter.com/NGGhxD38g2
— Ash Crypto (@Ashcryptoreal) August 29, 2024
According to his analysis, this could push Bitcoin to $100,000 sooner than many expect, with the potential for even greater gains, potentially reaching $125,000.
Featured image created with DALL-E, chart from TradingView
