Bitcoin Bearish Signal: NVT Golden Cross Enters Overbought Zone

On-chain data shows the Bitcoin NVT Golden Cross has entered into the overbought region, something that could be bearish for the price. Bitcoin NVT Golden Cross Has Been Going Up Recently As pointed out by an analyst in a CryptoQuant post, the most recent touch of this zone led to a drop in the price of the cryptocurrency. The “Network Value to Transactions” (NVT) is an indicator that measures the ratio between the market cap of Bitcoin and its transaction volume (both in USD). What this metric tells is whether the asset is overpriced or underpriced right now, based on how the value of the network (the market cap) compares with its ability to transact coins (the transaction volume). High values of the indicator suggest the cryptocurrency’s cap is inflated compared to its volume, and hence, the coin’s price may be overvalued currently. Similarly, low values can imply the asset may be undervalued at the moment. Now, a metric derived from the NVT is the “NVT Golden Cross,” which compares the 30-day moving average (MA) of the NVT with its 10-day MA. By taking the ratio of the long-term and short-term trends like this, the indicator can help point out the tops and bottoms in the NVT. Here is a chart that displays how the value of the Bitcoin NVT Golden Cross has changed over the past year: The value of the metric seems to have been climbing in recent days | Source: CryptoQuant As shown in the above graph, the quant has marked the historical regions where the Bitcoin NVT Golden Cross has signaled underbought and overbought conditions for the asset. It looks like the values of the metric above 2.2 have been a sign that the cryptocurrency is undersold, while those below the -1.6 level have implied an oversold condition. Related Reading: Bitcoin Market At Decision Point: aSOPR Retests Crucial Level From the chart, it’s visible that the indicator touched the underpriced region last month, and the price reacted by observing some bullish momentum. Since then, the metric has seen an overall uptrend. A week or so ago, when Bitcoin was floating around the $30,000 level, the NVT Golden Cross entered inside the overpriced region. Following this formation, the price faced some severe drawdown as it plunged to the low $27,000 level. The metric cooled down for a while following this selloff, but in the past couple of days, it has once again risen to touch the red zone. This would mean that the asset may be becoming overbought again. Over the past day, however, Bitcoin has actually only observed some strong upwards momentum, as the coin’s value has now recovered to levels above $29,000 again. Related Reading: Polygon Exchange Supply Spikes, More Downtrend Incoming? In the past, tops haven’t always been immediately formed whenever the NVT Golden Cross has surged to this area, so this wouldn’t exactly be unprecedented. However, considering that the surge may have only made the coin more overpriced, a local top may be hit soon for the asset, if this metric’s pattern is anything to go by. BTC Price At the time of writing, Bitcoin is trading around $29,400, up 1% in the last week. Looks like BTC has sharply surged over the last 24 hours | Source: BTCUSD on TradingView Featured image from mana5280 on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin Bearish Signal: Large Dormant Supply On The Move

On-chain data shows a large amount of old Bitcoin supply has moved in the last few days, something that could be bearish for the crypto’s price. Bitcoin Supply Older Than 2 Years Showed Movement In The Past Week As pointed out by an analyst in a CryptoQuant post, a total of four large transfers with old supply have taken place in the last week. The relevant indicator here is the “Spent Output Age Bands” (SOAB), which tells us the total number of coins that each age band is moving on the chain right now. The age bands refer to supply groups divided based on the criteria of the age of the coins (or more precisely, of the UTXOs). For example, the 1m-3m age band includes all coins that have been sitting dormant inside the same addresses since at least 1 month ago and at most 3 months ago. The SOAB metric for this group would then measure the total number of these coins that have been transferred to another wallet. Now, the age bands of interest here are the 2y-3y and 3y-5y groups. Typically, investors that have been holding their coins since more than 155 days ago are said to be the “long-term holders” (LTHs), so both these bands include coins belonging to two different segments of the LTHs. Also, it’s a statistical fact that the longer investors hold onto their BTC, the less probable they become to sell at any point. This implies that the holders with such aged supply as in these bands would be some of the most resolute HODLers in the market. Here is a chart that shows the SOAB data for these two Bitcoin age bands over the past week: Looks like there have been multiple spikes in this metric in recent days | Source: CryptoQuant As the above graph displays, there have been four large movements of coins belonging to these cohorts in the last few days. Three of these transfers were from the 2y-3y age band, while one was from the 3y-5y group. Related Reading: Ethereum Surges 4% As Whales Show Elevated Activity The spike from the latter cohort was significantly larger than the others, amounting to more than 15,000 BTC being moved. All the transfers from the 2y-3y age band combined came to almost 13,000 BTC, which is still less than the 3y-5y group’s transactions. Generally, large movements of such old Bitcoin supply is a sign of dumping from the LTHs, and if it’s the case here as well, then it would mean that the current market broke these so-called diamond hands into selling. The quant notes that these transfers were at least not headed towards exchanges, which does reduce the probability of these transactions being for selling purposes (but obviously doesn’t eliminate the chances, as these investors could just have been selling through OTC deals). Related Reading: Quant Explains How Bitcoin MVRV MACD Can Signal Price Trends Regardless of that, however, the analyst cautions, “it is very surprising to see FOUR of these transactions in one week. It is definitely worth watching in the next period.” BTC Price At the time of writing, Bitcoin is trading around $16,700, up 1% in the last week. BTC seems to be continuing its sideways trend | Source: BTCUSD on TradingView Featured image from Janko Ferlic on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin Bearish Signal: ‘Mid-Term’ Holders Show Signs Of Dumping

On-chain data shows that Bitcoin “mid-term” holders have been on the move during the past day, suggesting that they may be dumping currently. Bitcoin 3-6 Months Age Band Shows Large Spike In Spent Outputs As pointed out by an analyst in a CryptoQuant post, an increase in the spent outputs for the 3-6 months group has resulted in big moves for BTC before. The relevant indicator here is the “Spent Output Age Bands,” which tells us which age bands in the Bitcoin market are moving how many coins right now. These “age bands” are groups that define ranges between which the coins (or holders) falling into said band last showed any movement or selling. For instance, the “1m-3m” age band includes all tokens that have been sitting dormant since at least 1 month and at most 3 months ago. If holders belonging to this group shift their coins, then the move will show up as a spike on the spent outputs chart for the band. Related Reading: Litecoin Continues To Slide, Now Below Shiba Inu In Market Cap In the context of the current topic, the relevant age band is the “3m-6m” group. Here is a chart that shows the trend in the spent output metric for it during the last few years: The value of the metric seems to have shot up during the last day | Source: CryptoQuant As the above graph displays, the spent output metric has recorded a large value for the 3m-6m Bitcoin age band recently. The holders belonging to this group are sometimes referred to as the “mid-term holders,” because of the fact that their range covers the boundary between the short-term holder and the long-term holder cohorts. Related Reading: Bitcoin Bear Market Monthly Momentum Reaches Worst On Record From the chart, it’s apparent that generally whenever this holder group has shown signs of heavy dumping, the price of BTC has observed a steep decline shortly after. The latest crash following the collapse of FTX, too, was preceded by a large movement from these investors. After the current spike, Bitcoin has actually already seen a short-term drop, as the below chart shows. However, it’s unclear at the moment whether this decline was all there is going to be. If past examples are anything to go by, Bitcoin usually observes a large move whenever this trend forms, which implies the real decline from the latest spike may be yet to come. A closer look at the price trend following the spike in the indicator | Source: CryptoQuant BTC Price At the time of writing, Bitcoin’s price floats around $16.8k, down 3% in the last week. Looks like the value of the crypto has been moving sideways since the plunge a few days back | Source: BTCUSD on TradingView Featured image from mana5280 on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin Bearish Signal: MPI Records Highest Value Since April 2022

On-chain data shows the Bitcoin MPI has surged to its highest value since the April of this year, a sign that may prove to be bearish for the crypto’s price. Bitcoin Miners’ Position Index Has Spiked Up During Past Day As pointed out by an analyst in a CryptoQuant post, this instance is the fifth time that the metric has sent a warning signal. The “Miners’ Position Index” (or the MPI in short) is an indicator that measures the ratio between the miner outflows in USD, and the 365-day moving average of the same. Generally, miners transfer coins out of their wallets (that is, make outflow transactions) for selling purposes. Thus, the MPI can tell us whether miners are selling more or less right now compared to their past year average. When the value of this metric is high, it means miners are dumping more than usual currently. On the other hand, low values suggest these chain validators aren’t doing any heavy selling at the moment. Related Reading: Bitcoin Could Usher In December Near $18,000 If It Moves Past This Resistance Now, here is a chart that shows the trend in the Bitcoin MPI over the past year and a half: The value of the metric seems to have been pretty high recently | Source: CryptoQuant As you can see in the above graph, whenever the Bitcoin Miners’ Position Index has crossed above a value of 2 during the past year, the price of the crypto has seen a decline shortly after. There have been five such spikes in 2022 so far, the latest of which has only just been recorded in the last 24 hours. Related Reading: Bitcoin Hits $17,000, But Is It Too Early To Call The All Clear On The Bear Market? This current surge has now taken the indicator’s value to the highest level since the spike back in April of this year. When this previous spike was seen, Bitcoin was above $45k, but only a week later the crypto had crashed below $40k. If the latest rise in miner selling also follows the same trend as back in April, then BTC may observe some downtrend in the coming days. BTC Price At the time of writing, Bitcoin’s price floats around $16.9k, up 3% in the last week. Over the past month, the crypto has lost 17% in value. Below is a chart that shows the trend in the price of the coin over the last five days. Looks like the price of the crypto has retreaded below the $17k level again | Source: BTCUSD on TradingView Bitcoin has surged up in the last few days, but it’s unclear whether this rise will last, given the recent increased selling pressure from the miners. Featured image from Hans-Jurgen Mager on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin Bearish Signal: NVT Golden Cross Enters Sell Zone

On-chain data shows the Bitcoin NVT golden cross has now entered into the “sell” zone, something that could be bearish for the price of the crypto. Bitcoin NVT Golden Cross Surges, Now Has A Value Of 2.44 As pointed out by an analyst in a CryptoQuant post, this sell signal might lead to BTC’s price dropping in the next ten days. The “Network Value to Transactions ratio” (NVT ratio) is an indicator that’s defined as the market cap divided by the transacted volume in a specific period. What this metric tells us is how the value of Bitcoin currently compares with the investors’ ability to transact coins, and thus if the crypto is undervalued or overvalued right now. One application of this ratio is through the NVT golden cross, which compares the short-term (10-day moving average) and the long-term (30-day moving average) trends in NVT to indicate tops and bottoms in the crypto’s price. Related Reading: Which Cryptocurrencies To Buy in 2023: Chainlink (LINK), Aave (AAVE), and Orbeon Protocol (ORBN) Historically, the metric’s value being higher than 2.2 has usually been a signal to sell, while it being less than -1.6 has been a bullish sign. Now, here is a chart that shows the trend in the Bitcoin NVT golden cross over the last year: The value of the metric seems to have sharply gone up in recent days | Source: CryptoQuant As you can see in the above graph, the Bitcoin NVT golden cross has observed some sharp uptrend recently. The indicator now has a value of 2.44, meaning it has exceeded the 2.20 level that has historically implied sell signals. Related Reading: As Stepn (GMT) Decline Continues, BudBlockz (BLUNT) Offers A Better Alternative For Crypto Investors During late May, the metric saw a similar surge and rose to a peak value of 2.77. When the following month rolled around, BTC went through a huge crash from $30k to $20k. Since the crypto is once again overpriced according to the NVT golden cross, it’s possible the coin may go through more drawdown in the coming days. However, as the metric’s value is still lower than what it was at the high preceding the June crash, there might be potential for it to rise further, before the actual sell signal is in. BTC Price At the time of writing, Bitcoin’s price floats around $16.8k, up 2% in the last seven days. Over the past month, the crypto has lost 19% in value. Below is a chart that shows the trend in the price of the coin over the last five days. Looks like the value of the crypto has shot up during the last couple of days | Source: BTCUSD on TradingView Featured image from Mark Basarab on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin Bearish Signal: Supply Older Than 7 Years On The Move

On-chain data shows a large amount of Bitcoin supply dormant for more than 7 years ago has moved recently, a sign that may be bearish for the price. Bitcoin Supply Aged Between 7 And 10 Years Old Has Been Transferred Recently As pointed out by an analyst in a CryptoQuant post, the movement of such [...]

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Bitcoin Bearish Signal: Exchanges Observe Growing Reserves

On-chain data shows exchanges have been observing recent growth in their Bitcoin reserves, a sign that selling pressure may be increasing. All Exchanges Observe Growing Bitcoin Reserves, Except For Coinbase As an analyst in a CryptoQuant post pointed out, only Coinbase has seen some withdrawals recently. The relevant indicator here is the “exchange reserve,” which [...]

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Bitcoin Bearish Signal: Miners Sell At 3rd Largest Scale Ever

On-chain data shows that Bitcoin miners may have been selling at a historical rate recently, something that could be bearish for the asset’s price. Bitcoin Miner Inflow To Exchanges Has Registered A Spike Recently According to data from the on-chain analytics firm Glassnode, miner exchange inflows hit a peak value of $70 million recently. The “miner inflow to exchanges” is an indicator that measures the total amount of Bitcoin that miners are transferring to the wallets of all centralized exchanges. When the value of this metric is high, it means the miners are sending a large number of coins to these platforms currently. Generally, these chain validators deposit their BTC to exchanges for selling-related purposes, so this kind of trend can have a bearish effect on the value of the cryptocurrency. On the other hand, low values suggest the selling pressure coming from the miners may be low right now, as this cohort isn’t depositing any significant amounts to exchanges at the moment. Related Reading: Tether (USDT) Sharks & Whales Rapidly Accumulate, Why This Is Bullish For Bitcoin Now, here is a chart that shows the trend in the Bitcoin miner inflow to exchanges over the last few years: The value of the metric seems to have been quite high in recent days | Source: Glassnode on Twitter As displayed in the above graph, the Bitcoin miner inflow to exchanges has observed a spike in its value recently. This suggests that miners have been sending rather large amounts to these platforms during the past couple of weeks. Related Reading: Here’s How Current Bitcoin Capitulation Compares With Past Crashes These high values of the indicator have come as the cryptocurrency has been gradually heading downwards. This may imply that the recent market environment has made some of the miners panic sell their holdings. Since these inflows have become elevated, the asset’s value has only extended its decline further, as it has now dropped below the $26,000 level. This recent decline in the price may be fueled in part by the dumping being done by this cohort. From the chart, it’s visible that the peak of these inflows observed on 3rd June saw the indicator reach a value of around $70.8 million. This is a historically extraordinary level for the metric as only two trading days in the entire lifetime of the coin have seen the miners depositing at a larger scale. Both of the instances where miners sent larger amounts to these platforms took place way back during early 2021, when the bull market was in full flow. The peak inflow spike back then (that is, the largest value the metric has ever recorded) measured to about $101 million, implying that the current surge is about $30.2 million away from it. Naturally, Bitcoin miners selling at such a high rate recently can be bad news for the market. It now remains to be seen whether these chain validators continue to sell more in the near future, or if they are done with their dumping spree for now. BTC Price At the time of writing, Bitcoin is trading around $25,900, down 3% in the last week. BTC looks to have declined in the past few days | Source: BTCUSD on TradingView Featured image from Brian Wangenheim on Unsplash.com, charts from TradingView.com, Glassnode.com

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Bitcoin Bearish Signal: Dormant 1,433 BTC Moves After 10+ Years

On-chain data shows a large amount of Bitcoin older than 10 years has suddenly moved today, a sign that could be bearish for the price. Bitcoin Dormant From More Than 10 Years Ago Has Abruptly Moved As pointed out by an analyst in a CryptoQuant post, this movement of dormant coins may be a sign [...]

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Bitcoin Bearish Signal: Miners Continue To Sell

On-chain data shows that Bitcoin miners have continued to sell recently, a sign that can be bearish for the price of the cryptocurrency. Bitcoin Miner Reserve Has Been Going Down Since Rally Started As an analyst in a CryptoQuant post pointed out, BTC miners have continued to shave coins off their reserve recently. The “miner [...]

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