Bitcoin Metric Indicates ‘Local Bottom’ as Traders Anticipate Sub-$60K Price

The current price expectations for Bitcoin (BTC) suggest a potential dip below $60,000 before experiencing a price rebound. However, a significant market metric indicates that the worst may be behind us.

Bitcoin Signals Third ‘Local Bottom’ in 2024

Bitcoin’s price movements are showing signs of a third “local bottom” in 2024, as assessed by a leading BTC price indicator, which suggests potential growth opportunities.

According to recent findings from on-chain analytics platform CryptoQuant, the network value to transaction golden cross (NVT-GC) tool is showing bullish signs. This metric serves as a volatility gauge, similar to how Bollinger Bands operate.

Assessing Market Volatility

The NVT-GC is an analytical tool that compares Bitcoin’s market capitalization against the transaction value over a set timeframe, contrasting long-term and short-term NVT values. This creates a rough approximation of local market peaks and valleys. For 2024, three ‘bottom’ signals have been generated thus far.

A key insight from CryptoQuant is that:

“An NVT GC rising above 2.2 points indicates an overheated price in the short-term trend, suggesting a local top. Conversely, if the NVT GC drops below -1.6 points, it signifies an excessively cooling price, indicating a local bottom.”

Previous signals on January 18 and July 12 resulted in BTC price rises of 78% and 23%, respectively, leading analysts to conclude that the current market trend suggests a local bottom.

Traders React to $60K Price Point

As Bitcoin hovered around the $60,000 mark over the weekend, many market participants expressed caution about the potential for further declines.

While Bitcoin maintained support during off-hours trading, not all traders were convinced. Some anticipate a possible dip before any recovery occurs.

Crypto trader Crypto Tony has indicated a likely return to the $58,300 level, suggesting a further retest of lows prior to any substantial upward movement.

Blockchain technology expert Elja Boom echoed similar sentiments, reflecting on past price behavior where BTC/USD temporarily dropped to around $25,000.

As always, it is essential to note that this information does not serve as investment advice. All trading and investment decisions carry inherent risks, and individuals should conduct due diligence prior to taking action.