Key Points
- Bitcoin’s NVT Golden Cross, a key top/bottom metric, remains high despite recent price decline.
- U.S. investor demand for Bitcoin turns negative for the first time since the elections.
The recent decrease in Bitcoin’s price didn’t alter the local top risk signal, as per the NVT Golden Cross of Bitcoin.
For the first time since the elections, the demand from U.S. investors has turned negative.
Bitcoin’s NVT Golden Cross Warning
The NVT Golden Cross of Bitcoin is a modified version of the Network Value to Transaction (NVT) valuation metric.
This indicator accurately identified previous local Bitcoin tops and bottoms when it turned positive or negative.
A reading above 2.2 could indicate a probable top, while a low reading of -1.6 could suggest a possible local bottom.
CryptoQuant analyst DarkFost highlighted this a few days ago when it turned positive, cautioning of a potential top if it remained high.
At the time of writing, the metric was still high but below the risky 2.2 level, despite the 9% decline in Bitcoin.
Market Signals and Investor Demand
If historical trends persist, the current NVT Golden Cross reading of 1.73 for Bitcoin implies that an additional correction may still be due.
However, other overheated market signals, such as funding rates, have normalized following the drop to $90K.
According to IntoTheBlock, the shakeout was a leverage flush, which may have completed after clearing high-leveraged positions and normalizing funding rates.
However, the weakening of Bitcoin has put stress on U.S. investors, with demand turning negative for the first time since the U.S. elections.
This was demonstrated by the Coinbase Premium Index, which monitors U.S. investor interest in Bitcoin.
Despite this, many market experts believe that the bottom has been reached and that a recovery attempt is likely after the U.S. Thanksgiving holiday.
