Over the weekend, Bitcoin (BTC) price hovered between $54,424 and $58,215. However, as the new week begins, the coin presents an interesting revelation to the chain that could influence the next direction.
To put this into perspective, this condition has historically been pivotal to BTC’s recovery. Will it be the same this time?
Bitcoin Oversold, Drives Multiple Bids
The benchmark in question is the NVT Golden Cross. NVA stands for Network Value to Transaction. Defined as a reformed index of the N/A ratio, the metric measures whether Bitcoin has bottomed or topped.
When the value of this measure is 2.20 or higher, it means the coin has hit the top, and a drop is imminent. As seen in the image below, this happened in December 2023, March 2024, and most recently, May.
In comparison, if the NVT Golden Cross is below -1.60, it means that BTC is near or has hit the bottom.
Currently, the benchmark is at -1.39, a possible sign of oversold. This selling pressure can be linked to Mt Gox’s recent movement of BTC.
Apart from that, the numerous transfers by the German government played a role. However, as it stands, the coin could be on the road to recovery, as oversold could herald a recovery.
Furthermore, market participants seem to be lining up to buy BTC at the current discounted prices. BeInCrypto discovered this after investigating the Exchange On-chain Market Depth.
Read more: How to Buy Bitcoin (BTC) on eToro: A Step-by-Step Guide
This measure takes into account the activity in the order books of the top 20 exchanges. Divided into two parts, Exchange On-chain Market Depth considers the bid (buy) and ask (sell) segments.
According to IntoTheBlock, participants placed bids for 22,075 BTC at an average price of 55,671. However, the total value of BTC to be downloaded is 11,514 BTC at an average price of $55,673
Considering the higher value to be bought, Bitcoin’s price could dodge another downturn and recoup some of its recent losses.
BTC Price Prediction: No More Crash
At press time, Bitcoin is trading at $56,752. However, the Liquidation Heatmap suggests that the price could be higher in the short term.
Liquidations Heatmap uses color variations to measure the intensity of buy and sell orders in the market. Cooler colors like purple indicate a low level of activity. But when colors like green or yellow appear, it means that the liquidity is concentrated at a price level.
By analyzing the heat chart, one can spot potential areas of interest, resistance and support levels.
According to Coinglass, there is a high level of liquidity at $57,516 and another at $58,037. This high level of liquidity could attract a Bitcoin price increase in these regions.
Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030
The Relative Strength Index (RSI), which measures momentum, also supports this potential. On the daily BTC/USD chart it is at 34.61.
When the indicator’s reading is below 30.00, it is oversold. When it is above 70.00, it is overbought. Therefore, the RSI’s position implies that Bitcoin has left the oversold region and is heading for significant recovery.
Going through the positions of the Fibonacci Retracements, which see support and resistance points, BTC could retest $58,251 if it breaks through $57,016.
Meanwhile, RektCapital, a pseudonymous analyst on X, also commented on Bitcoin’s price action. According to him, the coin may have traded sideways as it closed on rally.
“Bitcoin is about to execute its first weekly candle close below the reaccumulation series low for the first time in the more than four months this series has existed,” Rekt Capital posted.
However, the coin is still trading below the 20-day exponential moving average (EMA), which tracks price changes to determine a trend’s strengths or weaknesses.
If Bitcoin’s price is above the 20-day EMA, it will indicate a solid bullish trend. However, as long as the coin wobbles below the threshold, it risks a return to $55,019.
Disclaimer
In accordance with the Trust Project Guidelines, this price analysis article is for informational purposes only and should not be construed as financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult a professional before making any financial decisions. Please note that our terms and conditions, privacy policy and disclaimers have been updated.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
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