- BTC’s miners’ balance gained upward momentum.
- Market indicators turned bearish, which increased the chances of a price drop.
The current bear market has been the longest since the inception of Bitcoin [BTC]. While historically there have been several metrics that acted as accurate signals for how BTC might react, but things in this market have changed.
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As per the latest report, a key indicator has been acting differently.
Bitcoin’s key indicator is behaving strangely
The crypto market has always witnessed bull and bear cycles, which have lasted for a few months. However, this time the scenario was different, as we are still witnessing the longest bear cycle.
During the last few cycles, several key metrics have given accurate signals of what to expect from the coin. But this time, BTC’s one of the major metrics, called the NVT Signal, was acting strangely.
For starters, the NVT Signal uses a 90-day moving average of the daily transaction volume in the denominator instead of the raw daily transaction volume. As per IntoTheBlock’s recent tweet, transaction value and volume were once the go-to metrics.
The lens through which we view Bitcoin's value is changing. Transaction value & volume were once the go-to metrics. However, recent spikes in NVT ratios hint that Bitcoin's value is now moving independently of transactional utility, hinting at its growing role as a store of value pic.twitter.com/vliTSWJGaO
— IntoTheBlock (@intotheblock) October 7, 2023
However, recent spikes in NVT ratios hint that Bitcoin’s value is now moving independently of transactional utility, hinting at its growing role as a store of value. Earlier, the NVT signal always spiked ahead of a price uptick for BTC and fell ahead of a price plummet.
But this time, despite a massive surge in BTC’s NVT signal, the coin’s price failed to move up.
Source: Glassnode
What else to look at?
Though the NVT signal acted differently, there are several other metrics to keep an eye on. For instance, the reserve risk is used to assess the confidence of long-term holders relative to the price of the native coin at any given point in time.
As per Glassnode’s data, BTC’s price remained in the right accumulation zone, meaning that investors can still use this opportunity to buy more coins.
Source: Glassnode
The miners’ perspective is also important when analyzing BTC’s price. As per Glassnode, miners’ balance gained upward momentum, reflecting their confidence in BTC.
At the time of writing, BTC was trading well above the $27,000 mark at $27,843.65, with a market capitalization of over $542 billion.
Read Bitcoin’s [BTC] Price Prediction 2023-24
However, the possibility of a downtrend in the near term was high as Bitcoin’s Money Flow Index (MFI) entered the overbought zone.
Additionally, BTC’s Relative Strength Index (RSI) also registered a downtick, further increasing the chances of a southward movement in the days to follow.
Source: TradingView
