Bitcoin ‘double bottom’ excites bulls as NVT signal predicts big moves
Bitcoin (BTC) is delivering striking similarities to its last bear market, but the latest bottom could be the last, research says.
In a tweet on October 31, popular trading account Stockmoney Lizards continued the bull house for BTC/USD.
Bitcoin “repeats itself” in 2022
In recent days there has been talk of Bitcoin facing a “double top”, with two peaks above $21,000.
The implication is bearish: Declining volume suggests bulls won’t be able to turn the level to support, and many expect new macro lows to come next.
New analysis provides an alternative, more optimistic perspective. For Stockmoney Lizards, the similarities between 2022 and 2018 are hard to ignore.
“Bitcoin is repeating itself,” they summarized alongside a comparative BTC/USD chart.
This chart compares what happened after Bitcoin reached its 2017 all-time high of $20,000 and 2021 all-time high of $69,000.
After a year-long bear market, BTC/USD approached macro lows similarly in both 2018 and 2022, the chart suggests.
As such, the June trip to $17,600 and the declines in the first half of October may actually have been a “double bottom” similar to Q4 2018 and the first half of 2019.
Should that turn out to be true, upside is the logical next step and Bitcoin should avoid one additional surrender event.
NVT Signal bets on “big green candle”
Equally positive news comes from Bitcoin’s NVT Signal, which a trader and analyst is reading as a signal of a “big move” to hit the charts.
Related: BTC Price Sees ‘Double Top’ Ahead of FOMC – 5 Things to Know in Bitcoin This Week
A derivative of the network value-to-transactions (NVT) ratio, the NVT signal is repeating behavior that has triggered significant BTC price appreciation in years past.
“NVT-Signal predicts a big move for $BTC is coming,” the trader explained next to a diagram.
“When the NVT signal crosses the NVT ratio and the NVT signal was before, the price of $BTC has increased ~450% on average over the last 3 years. I expect we will see a big green light very soon.”
NVT has not always led to successful interpretations. At the end of 2021, a separate iteration flashed “oversold” despite BTC/USD continuing to spend a year losing, not gaining, in the US dollar.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk, you should do your own research when making a decision.
