According to a recent analysis by CryptoQuant, Bitcoin (BTC) is showing signs of reaching a “local bottom” following the recent sell-off in early August. An insight published on the on-chain analytics platform highlighted bullish signals from the Network Value to Transaction Golden Cross (NVT-GC) tool, suggesting growth potential.
Despite recent warnings of a possible breakdown in the BTC/USD pair, the NVT-GC tool, which is similar to the Bollinger Bands, is pointing to a possible recovery. This metric compares Bitcoin’s market capitalization to transaction value over time and identifies local market highs and lows.
CryptoQuant contributor Burakkesmeci explained that a rise in NVT-GC above 2.2 points signals an overheated price, while a drop below -1.6 points indicates excessive cooling and a local bottom. Currently, the tool is showing a local bottom, similar to the signals on January 18 and July 12, which preceded price increases of 78% and 23%, respectively.
BTC is currently trading at $58,681, down 3.8% in the last 24 hours after losing the $60,000 mark. However, Bitcoin has gained 7.58% in the last 7 days after a strong recovery from lows of $49,500.
