As per the advanced NVT, Bitcoin was looking very cheap in terms of buying and as of today, the situation has been altered.
It was US$ 56,000 price for Bitcoin which made Bitcoin look “cheaper” but now it has moved into the zone which is known as ‘oversold territory’. Phillip Swift of LookintoBitcoin.com pasted a tweet post on 6th December 2021. In this post, he was optimistic that bullish indicators are glaringly evident in Bitcoin which have emerged from the ‘Advanced NVT’ of Bitcoin.
Advanced NVT is a formula that is used to determine whether Bitcoin is being “oversold” or whether it is “overbought”. The results are drawn by analyzing Bitcoin’s volume at the network and its market cap.
Last month, when Bitcoin’s pair with USDT faced value decline and was reduced to US$ 56,000, Swift predicted that quick bounce was near. Thereafter, there was a continuous decline in the metric with regard to spot prices. Although this is a positive sign, yet the positivity can only prevail once indicators of “oversold” start to come in from Bitcoin’s NVT. However, NVT signals haven’t been seen for more than 5 years because of their “rarity”. Swift suggested that the Bitcoin market is full of fears for the time being. It is these fears which make him believe that Bitcoin has bulls’ support. Yet there are also signals indicating hitting rock bottom.
Swift suggested that when Advanced NVT triggers, it guarantees price ‘bounce’. Value gains thereafter depend upon the strength of the bounce, said Swift. However, Swift acknowledges that though Bitcoin’s Advanced NVT is signaling, yet the bounce is not strong enough. He argued that though Bitcoin retreated by 6% but quickly went low again after hitting US$ 51,500.
On the other hand, crypto analysts are suggesting that investors should be careful about their investment decisions at least for a further week. They are expecting another price reduction is awaiting to take place. For instance, Pentoshi at Twitter warned investors that they should stop buying the dip. Instead, a better investment opportunity is likely to prevail when Bitcoin will move into the US$ 40,000 price range. Pentoshi was of the view that in a matter of a few days or a week maybe, the Bitcoin crash is certain.
According to a news report of Cointelegraph, spot price action can be separated from Bitcoin for several reasons. One such reason is the extravagant hash rate for Bitcoin. The other major reason for separation is the reduced selling pressure. Even though the warning is loud and clear, yet small-sized Bitcoin hodlers have been seen acquiring more Bitcoins since last week. However, it is only the whales that are in fact winning their bets.
The question now is whether Bitcoin is strong enough to repeat history by bringing in the rare possibility of Advanced NVT this time.