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Bitcoin NVT Flashes Buy Signal, Bottom In?

On-chain data shows the Bitcoin NVT ratio is currently flashing a buy signal, a sign that the bottom for the asset’s price might now be in.

Bitcoin NVT Golden Cross Is Showing A Green Signal

As pointed out by an analyst in a CryptoQuant post, the Network Value to Transactions (NVT) Golden Cross has now dipped below the -2 mark. The “Network Value to Transactions (NVT) ratio” is an indicator that measures the ratio between the Bitcoin market cap and transaction volume (both denominated in USD).

When the value of this metric is high, it means that the price of the asset (that is, its market cap) is high when compared to its ability to transact coins (the transaction volume). Such a trend may imply that BTC is overvalued right now.

On the other hand, low values can suggest that the market cap isn’t that much relative to the volume, so the cryptocurrency’s price may be undervalued at the moment.

In the context of the current discussion, the NVT ratio itself isn’t of interest, but rather a modified form of it called the “NVT Golden Cross” is. This new indicator aims to pinpoint tops and bottoms in the NVT ratio by comparing its 30-day moving average (MA) with the 10-day one.

Now, here is a chart that shows the trend in the Bitcoin NVT Golden Cross over the past year:

Bitcoin NVT Golden Cross

As displayed in the above graph, the Bitcoin NVT Golden Cross has plunged recently as the cryptocurrency’s price has gone through a crash. Following the latest drawdown, the indicator is now deep inside the negative territory, at a value below -2.

In the chart, the quant has marked two lines for the metric that have held some significance for the asset during the past. The first of these (marked in red) takes place at around 2.2, while the other one (green) is at -1.6.

Historically, whenever the NVT Golden Cross has crossed above the former line, the cryptocurrency has generally observed the formation of a local top. Similarly, a break below the latter level has resulted in bottoms for the coin.

From the chart, it’s clear that the indicator has now dipped firmly below the bottom line, implying that Bitcoin might be undervalued currently. In the past year, there have been three other instances of the indicator plunging below the line, each coinciding with some sort of low for the price.

The first two of these had reached bottom values similar to now, while the third occurrence (which is the latest one) saw the NVT Golden Cross dip much deeper towards the -3.1 mark before the bottom was hit.

It’s unclear which scenario might play out for Bitcoin this time, but one thing may be clear from this pattern: the bottom could be near for the cryptocurrency, or may even already be in.

BTC Price

At the time of writing, Bitcoin is trading at around $26,500, down 7% in the last week.

Bitcoin Price Chart

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Bitcoin Stablecoin Supply Ratio Now Forms A “Buy” Signal

On-chain data shows the Bitcoin stablecoin supply ratio is now showing a green signal that has proved to be profitable for the crypto several times in the last two years.

Bitcoin Stablecoin Supply Ratio Shock Momentum Forms “Buy” Signal

As pointed out by an analyst in a CryptoQuant post, out of the 11 previous such buy signals, 10 ended up profitable for the crypto.

The “stablecoin supply ratio” (or the SSR in brief) is an indicator that measures the ratio between the market cap of Bitcoin and that of all stablecoins.

Generally, whenever investors want to avoid volatility associated with cryptos like BTC, they shift their coins into stablecoins. Once they feel that prices are right to re-enter the markets again, they buy back into them. As such, the total stablecoin supply can be looked at as potential buying pressure for other cryptos.

When the value of the SSR is high, it means the BTC supply is higher compared to the stablecoin cap, and thus there is low buying pressure in the market currently.

On the other hand, low values of the indicator suggest there is high potential dry powder in the market right now. Because of this, such a trend can be bullish for the price of Bitcoin.

Now, there is a metric called the Bitcoin SSR “shock momentum,” which tracks the rate of change in its value. Here is a chart that shows the trend for it over the past couple of years:

Looks like the value of the metric has been low in recent days | Source: CryptoQuant

As you can see in the above graph, the quant from the post has marked the relevant points of trend for the Bitcoin SSR shock momentum.

It seems like whenever this metric has made a low below the green dotted level, the price of the crypto has observed a buy signal.

During the last two years, there have been eleven instances of this pattern taking place, out of which only one has turned out to be a false signal.

Most recently, the indicator has once again showed this formation. If the past trend is anything to go by, then this may turn out to be bullish for Bitcoin.

BTC Price

At the time of writing, Bitcoin’s price floats around $20.9k, up 4% in the past week. Over the last month, the crypto has lost 12% in value.

The below chart shows the trend in the BTC price over the last five days.

The value of the crypto seems to have spiked up over the past day | Source: BTCUSD on TradingView
Featured image from Quaritsch Photography on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin Taker Buy/Sell Volume Shows “Buy” Signal As BTC Gears Up For Rally

On-chain data shows the Bitcoin taker buy/sell volume is now showing a “buy” signal as the crypto looks to be gearing up for a new rally.

Bitcoin Taker Buy/Sell Volume Says Now May Be The Time To Buy

As pointed out by an analyst in a CryptoQuant post, the BTC taker buy volume recently reached a value that has historically been a green signal for the crypto.

The “taker buy volume” is an indicator that measures the long volume of Bitcoin on derivatives exchanges. The metric works by checking orders on the book to see how many takers are buyers. This volume divided by the total volume is called the taker buy ratio.

When the value of this indicator rises above 0.50, it means the majority of the order takers are currently buyers on exchanges.

On the other hand, the value of the ratio below this threshold implies that the Bitcoin short volume is higher at the moment.

Related Reading | Bitcoin Sets Record For Largest Single Day Pump After One Year

An alternate indicator is the “taker sell volume,” which measures the total number of sell orders or the short volume.

Now, here is a chart that shows the trend in these Bitcoin indicators over the past few months:

Looks like the taker buy ratio has risen in the past couple of days | Source: CryptoQuant

As you can see in the above graph, the Bitcoin taker buy ratio has exceeded the value of 0.52 this week. Naturally, the sell ratio has gone down on the other hand.

Related Reading | Data Shows Bitcoin Top Buyers Already Capitulated, New Bull Rally Here?

In the post, the quant explains that this value of the metric has historically flashed a buy signal for the cryptocurrency. Most recently, the indicator went above this threshold on 4th Feb, following which the price of the coin observed a surge.

If this pattern holds true this time as well, it would mean that now may be a good time to stack up on Bitcoin.

BTC Price

At the time of writing, Bitcoin’s price floats around $45k, up 15% in the last seven days. Over the past month, the crypto has gained 14% in value.

The below chart shows the trend in the price of the coin over the last five days.

BTC’s price looks to have surged up over the past couple of days | Source: BTCUSD on TradingView

After crashing all the way down to $34k last week, Bitcoin seems to have made some solid recovery back now as the coin approaches another retest of the $45k price level.

Currently, it’s unclear whether this recovery will last as the uncertainty due to the Russian invasion of Ukraine still looms over financial markets.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin Taker Buy/Sell Ratio Shows “Buy” Signal As BTC Lifts Off

On-chain data shows the Bitcoin taker buy/sell ratio is now lighting up a “buy” signal as the price of the crypto begins to take off.

Bitcoin Taker Buy Sell Ratio Suggests Now May Be A Good Time To Buy

As explained by an analyst in a CryptoQuant post, the taker buy sell ratio metrics can be used to find viable entry and exit spots in the market.

The “Bitcoin taker buy volume” is an indicator that measures the volume of buy orders filled by takers in perpetual swaps. Similarly, the “taker sell volume” measures the amount of sell orders.

The “taker buy ratio” (or its sell counterpart) is defined as the ratio between the buy volume and the total volume on perpetual swaps.

When the value of the taker buy ratio goes up, it means the buyers are currently willing to buy coins at a higher price. Such a trend shows that the buying pressure is currently stronger than the selling pressure.

On the other hand, taker sell ratio moving up would indicate a shift towards a more bearish sentiment in the market.

Related Reading | Is The Bitcoin Bottom In? Here’s What SOPR Data Says

Now, here is a chart that shows the trend in these indicators over the past couple of years:

The taker buy ratio seems to have crossed the 0.52 mark recently | Source: CryptoQuant

As you can see in the above graph, the quant has marked the important periods of trend. It looks like whenever the taker buy ratio has moved above the 0.52 level, a buying spot has been signaled for Bitcoin.

On the other hand, the taker sell ratio touching similar values has historically indicated a selling point for the crypto.

Related Reading | The Bear Signal That Suggests Another Bitcoin Crash Is Coming

It seems the value of the taker buy ratio just passed the 0.52 mark recently, suggesting around now may be an ideal buying opportunity for Bitcoin.

BTC Price

At the time of writing, Bitcoin’s price floats around $43.3k, up 12% in the last seven days. Over the past month, the crypto has accumulated 4% in gains.

The below chart shows the trend in the price of BTC over the last five days.

BTC’s price has shown some sharp uptrend over the past week | Source: BTCUSD on TradingView

After a long period of downwards movement, Bitcoin has finally enjoyed some constant uptrend over the past week. Earlier in the day, the coin’s price briefly broke above $45k before sliding down to the current levels.

It’s unclear at the moment if this trend will continue, or if it’s just a bull trap. However, if the taker buy ratio is anything to consider, the outcome of the coin may be bullish.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com