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Bitcoin NVT Signals ‘Buy’ as MVRV Says Don’t — What’s Next For Bitcoin Price?

  • The MVRV Momentum indicator shows that Bitcoin BTC has remained in negative territory since the start of the year, signaling potential weakness in the market.
  • However, the Advanced NVT is generating a local bottom zone that, if confirmed, could offer a clear signal to go long on BTC as the NVT is low.
  • This is a high amount of stablecoin deposits on the exchange.

The MVRV Momentum indicator has persistently indicated a negative momentum since the onset of the year. The same suggests a potential weakness within the market. This happens as Bitcoin price appears to be caught in a whirlwind.

The trend was seen as the MVRV line maintained values below the equilibrium point. It aligned closely with periods of price consolidation or decline.

Analytically, Bitcoin price sees volatility while the MVRV ratio often peaks before price corrections.

For instance, during early March ’24, the MVRV ratio escalated to 2.4. This movement was preceded with a notable price drop to $40k levels.

Conversely, a dip in the MVRV below 0.8 in May ’24 signified undervaluation, which historically aligned with substantial buying opportunities. Thereby initiating recoveries in the following months.

Bitcoin MVRV Momentum | Source: Glassnode
Bitcoin MVRV Momentum | Source: Glassnode

When the negative momentum was most pronounced, it often coincided with sharp declines in price.

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The 1-year MVRV Momentum Oscillator further substantiated these analysis by oscillating around the 2.0 mark, suggesting sustained market pressure.

If the current patterns hold, Bitcoin may continue to face downward pressure in the near term. This can happens especially if the MVRV fails to rise above its historical mean.

This possibility remains contingent on broader market conditions and investor sentiment shifts. It could defy the negative trend suggested by the recent MVRV readings.

Advanced NVT’s Lows Suggests Local Bottom for Bitcoin Price

However, Bitcoin Advanced NVT Signal indicated that Bitcoin might have reached a local bottom. It reflected an intriguing point in its valuation.

The NVT signal recent fluctuations beneath the historical peak levels, particularly during January 2025. It signals an increase in transaction volume against a relatively stable market cap.

This divergence suggested that despite the high market cap, the increased transaction volume could indicate undervaluation. This could potentially earmark it as an opportune buying zone.

Historically, when the NVT Signal approached or dipped below the 1.2x standard deviation (SD) line, Bitcoin’s price tended to find a foundation and subsequently appreciated.

Around July 2023, a similar dip in the NVT signal was followed by a substantial price recovery, affirming the pattern that low NVT values often precede bullish movements.

If the Advanced NVT continues to maintain or deepen its current levels, the probability of a BTC price surge could be high, mirroring previous patterns.

However, if Bitcoin transaction volumes diminish or fail to sustain their current levels relative to the market cap, the predicted local bottom might give way to further depreciation.

Impact of Huge Stablecoins Deposits on Exchanges

A spike in USDC inflow into cryptocurrency exchanges, with total inflows peaking at over $1 Billion also suggested potential buying activity during the recent sharp dip.

The surge correlated with noticeable fluctuations in the USDC price, briefly breaking the typical peg to the dollar.

Historically, large inflows like these have preceded both bullish and bearish phases in the market, as traders position themselves for expected price movements.

USDC Exchange Inflow | Source: CryptoQuant
USDC Exchange Inflow | Source: CryptoQuant

For instance, similar patterns were observed during market corrections or preceding significant rallies, as traders use stablecoins like USDC to maneuver swiftly within the market.

If this trend of high USDC inflows continues, it could indicate growing trader confidence and a potential uptick in market activity, possibly driving up cryptocurrency prices.

Conversely, should these inflows suddenly retract, it might signal a withdrawal of trader interest or a shift towards a more cautious stance, potentially leading to a market downturn.

Disclaimer

The contents of this page are intended for general informational purposes and do not constitute financial, investment, or any other form of advice. Investing in or trading crypto assets carries the risk of financial loss. The forecasted data (also called “price prediction”) on this page are subject to change without notice and are not guaranteed to be accurate.

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lennox gitonga
lennox gitonga
Lennox is a professional financial market analyst who's enthusiastic about blockchain, cryptos, and web3. He started blogging about cryptos back in 2019 and has since never looked back. His work revolves around looking at crypto-projects analytically on a technical and on-chain level, while also making sure it's palatable to the general audience.