Bitcoin (BTC), which is $56,000 in relation to network activity, is “seriously inexpensive” according to one analyst.
Philip Swift, creator and founder of analytics platform LookIntoBitcoin highlighted a bullish flag on Bitcoin’s Advanced NVT Signal in a tweet on November 24.
Bitcoin “deeply into oversold territory.”
Advanced NVT analyzes Bitcoin’s market capitalization and network volume to determine if BTC is too overbought at a given price point.
Swift explains the metric in an introduction. It builds on the NVT and accounts for changes in investor behavior as Bitcoin matures.
Advanced NVT is therefore the total Bitcoin market cap divided with the 90-day moving mean of network transaction volumes. It is currently “deeply into oversold territory” and a price increase will soon follow.
Swift wrote, “Bitcoin looks seriously cheap relative to network activities here on high-time frames.”
“Aim for a strong reaction in not too distant.
The accompanying chart shows Advanced NVT at its lowest level since 2020. This excludes the coronavirus crash in 2020 and the shutdown of 2021 miners in China.
Bitcoin Advanced NVT Signal chart. Source: Philip Swift/Twitter
Old hands still hold the power
Cointelegraph reported that NVT is not the only indicator on-chain that indicates a trend reversal.
Related: Bitcoin’s new split-second spikes are a sign that analysts believe it is almost time for a BTC surge.
The relative strength index (RSI), values, are also hinting at a rise in BTC prices. However, a number of other people refuse to be bearish despite a flagging sentiment.
Glassnode, a fellow on-chain analytics company, also noted Tuesday’s “The Week On the Chain” newsletter. It highlighted the “unique case” of short-term holders (STH), who have the least amount of Bitcoin in three-years, while spot prices are still at all-time highs.
STH wallets are those who have used Bitcoin in the last 155 days.
Analysts wrote that low STH supply is common at the beginning of bull markets and early bear markets. This usually follows long periods of accumulation.
“Seeing STH supply so low while the price is close to ATHs is an unusual case.”
Chart showing the proportion of Bitcoin short-term holders. Source: Glassnode