Bitcoin’s NVT indicator shows the network to be incredibly healthy
A key indicator in the chain now indicates that Bitcoin is seeing a strong underlying force despite its recent turbulent price action.
BTC’s NVT is a widely respected indicator that weighs the number of unique tokens that are traded on the Bitcoin network with the price action of the cryptocurrency.
Because the network is still being heavily used by investors, it shows that benchmark encryption is fundamentally and technically strong, and may suggest that it is poised for a rally in the coming days and weeks.
However, it is imperative that BTC establish itself firmly within five-figure price action in the near term so that it can see sustained upward momentum.
Bitcoin’s NVT indicator points to underlying network strength
Bitcoin’s NVT indicator represents the network value of the cryptocurrency in relation to transactions.
It is calculated by dividing Bitcoin’s market capitalization by the daily volume in the chain and can provide investors with useful information on the technical and fundamental strength of the cryptocurrency.
This indicator appears to indicate that Bitcoin is strong despite the recent decline in highs of over $ 9,800 that were set just a couple of days ago.
Data and analytics platform Santiment recently spoke about BTC’s NVT, explaining that the number of tokens being held on the network is slightly above its May average.
“Despite BTC’s slight decline of -4.4% today, its NVT looks healthy and our model shows a semi-bullish signal.” The amount of unique tokens being processed on the Bitcoin network is slightly above the average in May, according to current price levels. ”
This underlying strength could bolster the cryptocurrency’s technical outlook as it sits just above its key short-term support at $ 9,000.
BTC still remains in Bear territory until $ 10,000 breaks
The cryptocurrency’s NVT value should continue to rise further in the near term for it to break out of bearish territory, as one analyst notes that it remains weak below $ 10,000.
Josh Rager, a respected trader and analyst on Twitter, spoke about this in a recent tweet, explaining that BTC’s recent daily close below $ 9,160 puts it in a precarious position.
He said the following: “BTC Daily closed below $ 9,160, and now if the price cannot close above that price range, it could look to drop to $ 8ks in the coming days. Noting $ 8,500s (VAL) for support rebound and $ 9,500 (VAH) for rejection if the price goes up. Until BTC closes above $ 10k, this is just a higher low. “
If the cryptocurrency cannot gain upward momentum despite its underlying strength, Bitcoin may soon see significantly more losses.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.