- NVT Golden Cross suggests potential price surge.
- Daily and three-day charts signal a shift in momentum.
- Bearish divergence in VMC indicator hints at a possible downturn.
In a recent analysis by the pseudonymous CryptoQuant analyst Onchain Edge, Bitcoin (BTC) is sending mixed signals, leaving investors uncertain about the cryptocurrency’s immediate future. The report highlights contrasting indicators, painting a complex picture of potential outcomes.
The Good News
On the optimistic side, Onchain Edge’s technical analysis points to the NVT Golden Cross indicator, which currently returns a value of -2.37. This indicator compares the 30-day moving average of Bitcoin’s network value to transactions (NVT) ratio with its 10-day moving average. Historically, when the 10-day average dips below the 30-day average, it signals under-valuation and a possible price surge.
Onchain Edge notes that the current reading of BTC’s NVT Golden Cross at -2.37 falls within historically bullish territories. The analyst suggests,
“When this number goes below 2, it usually means good news for Bitcoin’s price. This has happened 5 out of 6 times before, and it often shows that Bitcoin’s price might jump up soon.”
However, caution is advised, as values above 2.2 in the NVT Golden Cross may signal a potential top, according to data from CryptoQuant.
The Not-So-Good News
Despite the positive NVT Golden Cross indicator, there are red flags in Bitcoin’s price movement. On a daily chart, BTC’s price has dipped below a significant trendline that it had been following, indicating a potential shift in momentum. Additionally, on a three-day chart, the coin’s price has broken another crucial trendline to the downside, possibly finding support at $34,000 and $36,000.
Adding to the bearish sentiment is the assessment of BTC’s VMC indicator (VuManChu Cipher B indicator) by Onchain Edge. A strong bearish divergence is detected, suggesting weakening trend strength in Bitcoin’s price. Onchain Edge states,
“A strong bearish divergence is showing up. This means the strength of the trend in Bitcoin’s price is getting weaker. So, it looks like Bitcoin’s price might go down a bit first, maybe around the $35,000 area.”
When the VMC indicator forms a bearish divergence, traders often interpret it as a signal to close out long positions and consider opening short positions.
As the crypto community awaits the resolution of these conflicting signals, Bitcoin’s fate hangs in the balance, leaving investors on edge about whether to anticipate a surge or a decline in the near term.
Disclaimer: Please note that the viewpoints and perspectives expressed by the author, as well as any individuals referenced in this article, are intended solely for informational purposes. They should not be construed as financial or investment advice. It’s important to acknowledge that investing in or trading cryptoassets carries inherent financial risks.