Bitcoin signals a potential bottom as market indicators turn bullish

According to recent analysis on CryptoQuant, Bitcoin (BTC) is showing signs of reaching a “local low” during the recent sell-off in early August. An insight posted to the on-chain analytics platform highlighted bullish signals from the Network Value to Transaction Golden Cross (NVT-GC) tool, indicating room for growth.

Despite recent warnings of a possible collapse of BTC/USD, the NVT-GC tool, similar to Bollinger Bands, indicates a possible recovery. This metric compares Bitcoin’s market capitalization to transaction value over time, identifying the tops and bottoms of the local market.

Burakkesmeci, a CryptoQuant contributor, explained that if the NVT-GC rises above 2.2 points, it indicates an overheated price, while a drop below -1.6 points indicates excessive cooling and a local bottom. Currently, the tool is indicating a local low, similar to the January 18 and July 12 signals, which preceded price gains of 78% and 23% respectively.

BTC is currently trading at $58,681, down 3.8% in the past 24 hours after losing the $60,000 level. However, Bitcoin gained 7.58% over the past seven days after a strong recovery from the low of $49,500.